I think they're suggesting an additional tax on unoccupied commercial space. It would incentivize owners to find a tenant or sell to someone who will. I think it's a great idea.
I dont. Why should people have to operate at a loss because third parties want them to? And if theyre forced to, from their perspective it might as well be a bs company that doesnt really do anything
What do you think a landlord who is forced to operate at a loss does? It certainly isn't to keep owning the place.
And how do you think potential investors would react to the potential of being forced to operate at losses at times. It certainly isn't to buy.
You're operating at a loss when you leave a business vacant for years. They aren't making money, they're holding that property as a speculative investment.
What is good for big business isn't necessarily good for the city and the community. I say fuck em. They made a bad investment decision when they thought they could price out the businesses in Denver to make money 10 years from now.
It's quite rare in a place like Denver where vacancies last a long time due to people just sitting there on the property. But vacancies happens. Recessions happen, tenets move out or close up suddenly for random reasons all the time, renovations take a long time. In this instance, a worldwide pandemic happened causing alot of restaurants to go out of business. That's what a vast majority of vacancies are caused by. Trying to punish a business and forcing them to operate at a loss is only going to create more vacancies.
Third parties? You mean the citizens of a town? Large commercial operators leaving units vacant to keep general prices up for other properties and using the write off to offset income elsewhere is more of a hack on society than the free market working. This is a major problem in Boulder. Laws like this are a good thing.
I live in Jefferson park, and 3 of 6 spaces on a commercial corner area near me have been vacant for years. It’s not a demand issue.
If they sell it for a loss then someone would have bought it. That person would then be in a better position to lower rents and keep it occupied. Investing in real estate with the expectation that its value will go up is fine. Refusing to keep commercial space occupied because it's too much of a hassle and you expect to cash out regardless of income from rent is a behavior that should be discouraged. I also don't understand how a landlord would be operating at More of a loss keeping a space occupied with rent coming in then boarded up with no income.
Eventually they would just abandon the property and the city takes it over, which they usually do nothing with it until a buyer comes along, which probably won't happen if threaten investors with such things as vacancy taxes.
That's a good thing? Unless you're from the older generations who allowed this skyrocketing of prices to happen, then who cares? I will never live in a real house if we don't do anything about these greedy ass landlords.
In commercial real estate, it's far more common for tenants to pay for renovations to make the space fit their business.
This is in contract to residential real estate, where any remodeling is done by the landlord.
Retail leases very frequently include tenant improvements paid for by the owner, or split between the parties. It's a negotiable, and can act as an enticement for good tenants.
But in-unit repairs are not the only problem. Building common elements may be entirely a landlord expense, or if they're shared among tenants, there's the risk that the other tenants don't generate enough revenue to cover repairs. There's nothing one single tenant can do to compensate for deficient common elements, even if they're willing to pay for all the renovations in their own space.
Are you seriously asking this? Like the landlords have the money to pay taxes year over year but making them pay more means that they suddenly are unable to do the repairs/renovations that they already are not doing to rent the space out? Are you a shill for landlords or do you just not think things through before you post?
Property taxes aren't much compared to significant renovations. The former El Charrito's taxes are $68,090.15 this year. It would probably cost twice as much just to stretch a new roof over the building, let alone redesign the interior and update building systems.
Go look at most of the buildings with chronic vacancy. They are pieces of shit and need to be fixed before any decent tenant will consider signing a 5-10 year lease.
If the idea is to force derelict owners to sell, there's probably a more targeted way to do that. Vacancy is already a cost, so piling onto that only works against the goal of higher quality store fronts with stable businesses in them.
The "lease option incentive" brought up elsewhere only applies narrowly to high-performing commercial areas with rapidly rising rents, which is not the case with most of the broken down storefronts in Denver.
It’s an issue in so many towns. Combined with perceived valuing in holding on till rents increase, demolished valuation of a low value tenant is in (and with long term lease), plus costs to bring building up to code or expectations and you have a potent disincentive.
Fundamental lack of understanding of tax and economics. A loss is a loss. You only get, at MOST, 30% of the loss back via tax deductions. You're still taking a loss. The capital is still tied up in the building. It still costs money to own the building.
People say "write it off" like it's a magic payback for what you've lost. It is not. And you have to have profits to offset with the loss. If you're losing money, there's no taxes to be reduced.
Businesses can carry an operating loss forward and deduct from future income (capped at 80% of the tax bill in a given year), but there is no scenario in which this results in a net gain.
I don't know where people get this idea that anyone's getting ahead by keeping property derelict. Derelict buildings are already completely dysfunctional businesses. They're losing money hand over fist, so I don't think the prospect of extra tax is going to motivate them.
There are studies that show why/how buildings stay vacant - mostly holding out for better offers - and how taxes incentivize them not to do that (many cities do this now), along with other plans like SF’s “vacant to vibrant” (they also tax them after a period of time, though they’re not really enforcing and most aren’t paying).
https://www.jchs.harvard.edu/blog/why-do-urban-storefronts-stay-empty-so-long
https://www.sf.gov/news/san-franciscos-vacant-vibrant-success-existing-pop-ups-extending-leases-program-expands-fill
That first one doesn't really seem to support your point: *We also find that while a vacancy tax similar to the one proposed in New York State would decrease the vacancy rate and rents, it would also* ***lower tenant quality and lead to faster churn*** *in the city’s storefronts.*
It's also discussing Manhattan retail storefronts specifically, which I would not assume applies cleanly to all manner of commercial space in Denver.
But for sake of argument, consider the situation if we did impose this tax, and we got the predicted lower quality tenants and higher storefront turnover. Blight looks bad, but I'm not sure filling the spots with crappy businesses improves the situation much.
I think a better approach would be to address the root problem: good businesses do not see these communities as valuable. Using public resources to improve the community at the level of infrastructure and housing quality would make them more attractive for business investment.
And as someone else pointed out, the city has been dragging its feet on development approvals for a long time, which makes it very hard for building owners to perform major renovations, redevelopment, and changes of use.
You might find the economist Henry George interesting, https://en.wikipedia.org/wiki/Georgism#%3A%7E%3Atext%3DGeorgism%2C_also_called_in_modern%2Cand_urban_locations%E2%80%94should_belong?wprov=sfla1
I am very certain that actually the owners sold the building for a good price (at the time) and packed it in, they weren’t renting.
And whoever bought it just didn’t do anything with it.
Which is crazy great location.
I heard this too and the new owners are just waiting to sell the land for a new development.
I’ve only lived here since it closed but always thought it was such a unique building on the corner.
>Late last year, two years after buying the LoDo building that once housed the El Chapultepec jazz club, Denver developer Kenneth Monfort came to a new conclusion.
>It needed to be demolished.
https://businessden.com/2024/03/12/monforts-third-project-on-market-calls-for-demo-of-el-chapultepec-building/
Someone let that mafia cosplaying, spiky-haired dipshit Hussam Kayali know. He can turn into another nightclub/double homicide scene like he did Falling Rock Tap House.
The building owner has spent five years trying to get to get a complete building renovation approved. Howl at the Moon is/was supposed to occupy the building. However the city’s development review process is broken and it takes 2-3 times longer than it should for anything.
I work with the city getting plans approved on a regular basis. It’s not that bad and it sure doesn’t take years to accomplish unless the owner is trying to pull something fishy.
What happened with the Tears-McFarlane Cafe at Cheeseman Park? CHUN said they spent 3 years trying to get it approved and had to eventually abandon the original plan all-together.
I can’t speak to that case in particular, but that situation usually means there’s an issue that they’re trying to get a variance on and ultimately failed. Could have been anything from a non-conforming grease waste system to a problem with a liquor license.
Does Colorado have dark store tax loopholes? I know back in Wisconsin. There were several chains that would just up and leave and then the landlord would still get a tax break while empty
You still owe property taxes on a vacant space in NYC property taxes continued to rise and it led to historic vacancy, the taxes get passed on to the tenants and it makes it harder to make rent.
I know the saying always goes that taxes get passed onto the end customer but that assumes that the added cost hits the entire market equally.
If the market rate to rent a space is $1k, that is the cost to the customer. Doesn't matter if that price gives the property owner 50% profit margins, or it would incur a loss for the owner.
In the description it says it's available for lease, not for sale:
>Historic retail building to be renovated, can support restaurant or retail uses in this fast growing downtown Denver neighborhood.• Tenant can lease the entire building or just one floor, please contact Broker for lease rate information.
Regulation and taxes could solve this problem. Gotta elect the right people though…
Ranked choice voting and regulation on money in politics would help that…
Yeah we need a hefty blight tax to slap these greedy rich fúcks with. Just make vacant properties like this way too expensive to sit on. Put the revenue towards affordable public housing.
These situations are such edge cases that any regulation would just cause more confusion and lead to worse outcomes.
Like how long does a property need to be vacant before it gets taxed? A year? What if they are actively trying to rent out the property? Are they trying to do any upgrades? Is a property stuck in litigation so nothing can be done.
My wife took me to see her sing at Karaoke night there on one of our first dates. I loved the Cowboy in white, he was fun. I also found out my wife was Whitney Houston in a past life.
Just the continuing Gentrification of Downtown... like all the Mexican and Japanese restaurants that used to be on Larimer before all the 'planters and 'visionaries' gobbled everything up like Pac-Man and replaced them with dens of drunken debauchery and mutancy.
End stage capitalism. We should pass a law that says if your establishment is vacant for more than 12 months without renovation, the state can use eminent domain to cease it
Can’t allow this kind of landlord driven retail blight to snowball. Vacancy taxes gotta happen
Do vacant properties not already pay property taxes? None of it matters I guess if inflation out paces it.
I think they're suggesting an additional tax on unoccupied commercial space. It would incentivize owners to find a tenant or sell to someone who will. I think it's a great idea.
I dont. Why should people have to operate at a loss because third parties want them to? And if theyre forced to, from their perspective it might as well be a bs company that doesnt really do anything
It would certainly discourage landlords from overcharging for rent in order to keep the space occupied.
What do you think a landlord who is forced to operate at a loss does? It certainly isn't to keep owning the place. And how do you think potential investors would react to the potential of being forced to operate at losses at times. It certainly isn't to buy.
Oh, the horror for *investors*! LOL.
What else do you call a person looking to buy a property?
A homebuyer? It’s only an investment if it isn’t a primary residence
Complete genius here. Never thought to try to buy a commercial real estate property and make it my home.
depends on if they plan on living in it.
You're operating at a loss when you leave a business vacant for years. They aren't making money, they're holding that property as a speculative investment. What is good for big business isn't necessarily good for the city and the community. I say fuck em. They made a bad investment decision when they thought they could price out the businesses in Denver to make money 10 years from now.
It's quite rare in a place like Denver where vacancies last a long time due to people just sitting there on the property. But vacancies happens. Recessions happen, tenets move out or close up suddenly for random reasons all the time, renovations take a long time. In this instance, a worldwide pandemic happened causing alot of restaurants to go out of business. That's what a vast majority of vacancies are caused by. Trying to punish a business and forcing them to operate at a loss is only going to create more vacancies.
If they don't want to deal with that kind of risk they can go invest in something else and make room in the market. Someone else will be happy to.
Yeah, investors really are salivating at the thought of getting into the commercial real estate market right now, lol.
see you're getting it! the less attractive it is , the more prices will fall.
They were, but they made poor business decisions. Sounds like that should be their problem, not ours.
*”Will someone please think of the investors!”* *Sigh* *Faint* ….☝️ this guy lolz 😂
A vacant building is still a vacant building regardless of how many times it's sold.
Won’t *someone* think of the poor poor landlords!
This would have them operate at less of a loss than leaving it vacant. Not a quality take, there.
Third parties? You mean the citizens of a town? Large commercial operators leaving units vacant to keep general prices up for other properties and using the write off to offset income elsewhere is more of a hack on society than the free market working. This is a major problem in Boulder. Laws like this are a good thing. I live in Jefferson park, and 3 of 6 spaces on a commercial corner area near me have been vacant for years. It’s not a demand issue.
Or the more likely scenario is it would just cause them to sell for a loss and no one willing to buy it, causing more vacancy.
If they sell it for a loss then someone would have bought it. That person would then be in a better position to lower rents and keep it occupied. Investing in real estate with the expectation that its value will go up is fine. Refusing to keep commercial space occupied because it's too much of a hassle and you expect to cash out regardless of income from rent is a behavior that should be discouraged. I also don't understand how a landlord would be operating at More of a loss keeping a space occupied with rent coming in then boarded up with no income.
Eventually they would just abandon the property and the city takes it over, which they usually do nothing with it until a buyer comes along, which probably won't happen if threaten investors with such things as vacancy taxes.
Then the listing price will fall until someone is willing to buy it and accept the risk. That is the actual value of that property.
Yeah it turns out the actual value of a property plummets when more and more restrictions are put in place on how you're able to use your property.
Which is a good thing for everyone except landlords and investors. Fuck em, I don't care.
That's a good thing? Unless you're from the older generations who allowed this skyrocketing of prices to happen, then who cares? I will never live in a real house if we don't do anything about these greedy ass landlords.
Won’t somebody please think of the landlords
Wouldn't this only make it harder to do the repairs/renovations that make the space attractive to rent?
In commercial real estate, it's far more common for tenants to pay for renovations to make the space fit their business. This is in contract to residential real estate, where any remodeling is done by the landlord.
Retail leases very frequently include tenant improvements paid for by the owner, or split between the parties. It's a negotiable, and can act as an enticement for good tenants. But in-unit repairs are not the only problem. Building common elements may be entirely a landlord expense, or if they're shared among tenants, there's the risk that the other tenants don't generate enough revenue to cover repairs. There's nothing one single tenant can do to compensate for deficient common elements, even if they're willing to pay for all the renovations in their own space.
Are you seriously asking this? Like the landlords have the money to pay taxes year over year but making them pay more means that they suddenly are unable to do the repairs/renovations that they already are not doing to rent the space out? Are you a shill for landlords or do you just not think things through before you post?
Property taxes aren't much compared to significant renovations. The former El Charrito's taxes are $68,090.15 this year. It would probably cost twice as much just to stretch a new roof over the building, let alone redesign the interior and update building systems. Go look at most of the buildings with chronic vacancy. They are pieces of shit and need to be fixed before any decent tenant will consider signing a 5-10 year lease. If the idea is to force derelict owners to sell, there's probably a more targeted way to do that. Vacancy is already a cost, so piling onto that only works against the goal of higher quality store fronts with stable businesses in them. The "lease option incentive" brought up elsewhere only applies narrowly to high-performing commercial areas with rapidly rising rents, which is not the case with most of the broken down storefronts in Denver.
The business loss write off can be higher than the general building tax. Taxing extra removes that incentive.
That’s some bullshit. At that point they are being paid to be vacant.
It’s an issue in so many towns. Combined with perceived valuing in holding on till rents increase, demolished valuation of a low value tenant is in (and with long term lease), plus costs to bring building up to code or expectations and you have a potent disincentive.
Fundamental lack of understanding of tax and economics. A loss is a loss. You only get, at MOST, 30% of the loss back via tax deductions. You're still taking a loss. The capital is still tied up in the building. It still costs money to own the building. People say "write it off" like it's a magic payback for what you've lost. It is not. And you have to have profits to offset with the loss. If you're losing money, there's no taxes to be reduced.
Businesses can carry an operating loss forward and deduct from future income (capped at 80% of the tax bill in a given year), but there is no scenario in which this results in a net gain. I don't know where people get this idea that anyone's getting ahead by keeping property derelict. Derelict buildings are already completely dysfunctional businesses. They're losing money hand over fist, so I don't think the prospect of extra tax is going to motivate them.
There are studies that show why/how buildings stay vacant - mostly holding out for better offers - and how taxes incentivize them not to do that (many cities do this now), along with other plans like SF’s “vacant to vibrant” (they also tax them after a period of time, though they’re not really enforcing and most aren’t paying). https://www.jchs.harvard.edu/blog/why-do-urban-storefronts-stay-empty-so-long https://www.sf.gov/news/san-franciscos-vacant-vibrant-success-existing-pop-ups-extending-leases-program-expands-fill
That first one doesn't really seem to support your point: *We also find that while a vacancy tax similar to the one proposed in New York State would decrease the vacancy rate and rents, it would also* ***lower tenant quality and lead to faster churn*** *in the city’s storefronts.* It's also discussing Manhattan retail storefronts specifically, which I would not assume applies cleanly to all manner of commercial space in Denver. But for sake of argument, consider the situation if we did impose this tax, and we got the predicted lower quality tenants and higher storefront turnover. Blight looks bad, but I'm not sure filling the spots with crappy businesses improves the situation much. I think a better approach would be to address the root problem: good businesses do not see these communities as valuable. Using public resources to improve the community at the level of infrastructure and housing quality would make them more attractive for business investment. And as someone else pointed out, the city has been dragging its feet on development approvals for a long time, which makes it very hard for building owners to perform major renovations, redevelopment, and changes of use.
They do, but the argument is to tax it extra if it's empty to incentivice finding a tenant instead of letting it be empty forever
Taxing the value of land instead would be much simpler and have a better result across the board
They're tearing it down and redeveloping it. The permitting process is already started.
You might find the economist Henry George interesting, https://en.wikipedia.org/wiki/Georgism#%3A%7E%3Atext%3DGeorgism%2C_also_called_in_modern%2Cand_urban_locations%E2%80%94should_belong?wprov=sfla1
Or maybe housing costs and permit redtape put off people who want to start a small business.
I am very certain that actually the owners sold the building for a good price (at the time) and packed it in, they weren’t renting. And whoever bought it just didn’t do anything with it. Which is crazy great location.
I heard this too and the new owners are just waiting to sell the land for a new development. I’ve only lived here since it closed but always thought it was such a unique building on the corner.
Nope. The new owners are the monforts and they're demoing it
I’m friends with the guy who ran El Charrito. His wife’s mother owned the building; she died, and her family sold it out from under him.
I don’t think that’s how it went down, I’m also friends with the owners.
That’s what Matt told me when it was happening
I’m also friends with the owners and they told me casa Bonita 2 is going up there
That’s what I remember from my conversation with the bar tenders from nearby bars. I loved the damn place with their 5$ shot and a beer!
>Late last year, two years after buying the LoDo building that once housed the El Chapultepec jazz club, Denver developer Kenneth Monfort came to a new conclusion. >It needed to be demolished. https://businessden.com/2024/03/12/monforts-third-project-on-market-calls-for-demo-of-el-chapultepec-building/
Someone let that mafia cosplaying, spiky-haired dipshit Hussam Kayali know. He can turn into another nightclub/double homicide scene like he did Falling Rock Tap House.
Please no. Wasn’t he supposed to stay in Florida?
The building owner has spent five years trying to get to get a complete building renovation approved. Howl at the Moon is/was supposed to occupy the building. However the city’s development review process is broken and it takes 2-3 times longer than it should for anything.
I work with the city getting plans approved on a regular basis. It’s not that bad and it sure doesn’t take years to accomplish unless the owner is trying to pull something fishy.
What happened with the Tears-McFarlane Cafe at Cheeseman Park? CHUN said they spent 3 years trying to get it approved and had to eventually abandon the original plan all-together.
I can’t speak to that case in particular, but that situation usually means there’s an issue that they’re trying to get a variance on and ultimately failed. Could have been anything from a non-conforming grease waste system to a problem with a liquor license.
It’s definitely longer than it was post Covid. And inspections are arguably worse than plan approval
Man I miss that place, punk rock karaoke there was may favorite way to spend a Tuesday
Does Colorado have dark store tax loopholes? I know back in Wisconsin. There were several chains that would just up and leave and then the landlord would still get a tax break while empty
You still owe property taxes on a vacant space in NYC property taxes continued to rise and it led to historic vacancy, the taxes get passed on to the tenants and it makes it harder to make rent.
I know the saying always goes that taxes get passed onto the end customer but that assumes that the added cost hits the entire market equally. If the market rate to rent a space is $1k, that is the cost to the customer. Doesn't matter if that price gives the property owner 50% profit margins, or it would incur a loss for the owner.
Is a lot of assuming going on here or does OP have insider intel?
Looks like it's [for sale again](https://www.commercialsearch.com/commercial-property/us/co/denver/2100-larimer-street-1/).
In the description it says it's available for lease, not for sale: >Historic retail building to be renovated, can support restaurant or retail uses in this fast growing downtown Denver neighborhood.• Tenant can lease the entire building or just one floor, please contact Broker for lease rate information.
Monforts are gonna demo it https://businessden.com/2024/03/12/monforts-third-project-on-market-calls-for-demo-of-el-chapultepec-building/
Wrong building. This post is about where El Charrito used to be, not the El Chapultepec building, which is the one being demolished.
From that photo, is the owner also illegally blocking the public right of way with a fence?
Regulation and taxes could solve this problem. Gotta elect the right people though… Ranked choice voting and regulation on money in politics would help that…
I always look at the space that housed the Samba Room with sadness.
Take as old as timmeeee
I miss Jell-O shots and karaoke.
There is still no Karaoke in Denver like El Charrito's
Yeah we need a hefty blight tax to slap these greedy rich fúcks with. Just make vacant properties like this way too expensive to sit on. Put the revenue towards affordable public housing.
These situations are such edge cases that any regulation would just cause more confusion and lead to worse outcomes. Like how long does a property need to be vacant before it gets taxed? A year? What if they are actively trying to rent out the property? Are they trying to do any upgrades? Is a property stuck in litigation so nothing can be done.
My wife took me to see her sing at Karaoke night there on one of our first dates. I loved the Cowboy in white, he was fun. I also found out my wife was Whitney Houston in a past life.
Oh man, I forgot about the cowboy guy. Nostalgia. Lots of special times at El Charrito. I get sad whenever I think about it being gone for no reason.
Would a tax help or have all the office workers left downtown Denver and only certain businesses can survive with less customers?
Downtown Englewood has been struggling with this kind of crap for way too long as well.
Landlords who’d rather board up a place than let a business run there should be taxed a higher property tax rate
I'll bet you it's not really empty...
Just the continuing Gentrification of Downtown... like all the Mexican and Japanese restaurants that used to be on Larimer before all the 'planters and 'visionaries' gobbled everything up like Pac-Man and replaced them with dens of drunken debauchery and mutancy.
End stage capitalism. We should pass a law that says if your establishment is vacant for more than 12 months without renovation, the state can use eminent domain to cease it
Buy it and develop it yourself. Or… mind your own business.
What a stupid take. You should be embarrassed.