Representatives from two of Natick’s biggest taxpayers shared their thoughts with the Select Board at its Sept. 9 meeting on the topic of split tax rates that would result in higher tax bills for commercial property owners. Not surprisingly, they want no part of it.
Natick has always had a single tax rate for residential and commercial property owners, but as part of town leadership’s vow to take a fresh look at possible avenues for financial relief in the wake of this year’s $7M override, the property tax system is getting a closer look.
More than 80% of Natick’s overall property and personal tax base comes from residential property owners, and even a small decrease in their rate would result in a relatively larger increase for commercial property owners.
You know this is serious business for Brookfield Properties, owner and operator of the Natick Mall, when despite its acknowledged financial challenges it can afford to send three executives to a night meeting with the Select Board. Brookfield is in fact the top taxpayer in town.
The Select Board also received letters discouraging the town from changing to a split tax rate from other commercial property owners such as MathWorks and Stuart Rothman, manager of The Block at One South Main Street and The Clark Block at Two Summer Street.
Brookfield’s presentation started with this statement: “Shifting to a split tax rate may seem like a way to ease the residential burden — but it puts Natick’s largest economic engine at risk: Natick Mall.” One thing left unsaid in the business presentations was that one reason they may be struggling is that local residential property owners have less money in their pockets to spend after paying their soaring taxes.
Brookfield VP Janell Vaughan cited numerous reasons for how a higher property tax rate for commercial property owners would hurt its business, including that higher tax bills would be passed through to tenants (or potential tenants). She and others from Brookfield said the Mall is still recovering from the downturn in business during the COVID-19 pandemic despite efforts to be creative in attracting new entertainment-oriented tenants to replace anchor retailers like Lord & Taylor that have left.
Expand your reach by advertising on Natick Report
“An increase in the real estate tax is a threat to our occupancy in the center because it can potentially make our real estate unaffordable to tenants,” she said.
Like for individuals, Natick Mall is seeing a rise in all sorts of expenses. Higher taxes would also put the squeeze on how much the Mall could afford to spend on infrastructure and other upgrades, according to Brookfield.
Vaughan referred to the Mall as an “economic engine” for the region that through its employment and sales generates significant payroll and sales tax revenue for the government. Mall businesses employ about 1,200 full timers and 600 part timers, according to Brookfield.
Keeping a single tax rate will help to ensure that Natick and the Natick Mall can remain competitive with other regions and shopping centers that tenants might explore to be located, she said.
During the Select Board meeting, members of the elected body tried to get at whether there are steps the town can take to better support existing businesses and attract new ones. Town Administrator Jamie Errickson mentioned ongoing efforts to improve transportation options (for shoppers and employees) and to ease the permitting process. Zoning changes may also open new opportunities, particularly where businesses like the Mall see to attract different uses for their space.
The Board also heard from David Pratt of HC Atlantic Development/Sherwood Plaza/ABI Lab, located across Rte. 9 from the Mall. He dittoed most of what the Mall reps had to say, plus added points.
He stressed that the focus for the retail marketplace shifted dramatically post-COVID from “location, location, location to price, price, price,” and that businesses are comparing sites here to those across the country when it comes to deciding where to operate.
“We have to basically guarantee to them a foreseeable tax rate to them as part of the negotiation,” Pratt said, adding that it’s difficult for property managers to get the kinds of rents they were getting pre-COVID.
Outside of the very largest redeveloped commercial sites in town, the value increase for most commercial properties in town has been marginal at best, whereas residential property values have ballooned, Pratt said. Not that he doesn’t acknowledge the tax increases for residential property owners.
Pratt, a member of the Natick Economic Development Committee, said he worries that much of Natick’s strong commercial base consists of homegrown businesses that seek to do more, but that the town has struggled to attract major out-of-town investments. “That should be a warning to us that our commercial base is very insular,” he said. In other words, Natick needs to do all it can to make the town an attractive place to locate.
(Not to say the town hasn’t been making strides, such as having recently achieved a Platinum BioReady rating from the Massachusetts Biotechnology Council.)
The Select Board will have its annual tax rate vote this fall, but also will continue with broader tax rate discussions with additional sessions in months to come on topics such as how other communities are handling this issue and options for new residential tax exemptions.
Now, thanks to Natick Report’s partnership with Tiny News Collective, you can make tax deductible contributions to support our work.
They’ve been increasing rent and prices every single year.
These companies would not be making this money at all if it wasn’t for the residents.
True that. The Natick Mall isn’t going to pick up stakes and leave if the tax structure is changed. They will work around it. Natick residential tax payers need a break. The mall and other afore mentioned businesses also put a huge strain on Natick services like police and fire. Why should residential tax payers be on the hook for that?