UMass buying Biotech on Innovation Drive

UMasss has done anything wrong!!!    Why is everyone mad??  The City may may lose alot of money!!

Let's not pretend, when they City of Worcester loses alot of money, the people who are still paying the bills need to make up the difference.  Don't get me wrong I can understand why everyone is mad, but we have no reason to be upset with UMass?  They are simply playing by the rules that were laid out for them and the same thing has been happening for years.

Let me clarify something I have heard said incorrectly about 100 times.  If a non-profit buys real estate, it not automatically taken off the tax roles.  Ownership does not take a property off the tax roles, it is the underlying use and ownership.

Let me explain:

• 18 million dollar property owned by a for profit entity, of which 12 million is rented by for profit businesses, while the other 6 million is rented by non-profits.  The City of Worcester collects property taxes based on a 18 million valuation.
• Same scenario, but the property is owned by a non-profit.   Taxes are only paid on the 12 million valuation, representing the real estate leased by the for profit entities.

If this does make you mad then why doesn't this:

1. Demers Good Year Tire Center on Pleasant Street was bought buy a church many years ago and pays no property taxes now.
2. Manoog Plumbing on Piedmont Street was bought by a church and no property taxes are being paid now.
3. Kesseli & Morse on Canterbury Street was bought by a church and no property are being paid now.
4. Holy Cross bought Howard Johnson's Hotel, tore it down, planted grass and now pay no property taxes.  
5. Repair gas station on the Corner of Main Street and Crystal Street was bought by Clark University, torn down, grass was planted and no taxes are being paid.

Our current real estate tax structure has tipped the scales towards non-profits to buy and either utilize or tear down commercial real estate properties for sale, when they their competition is looking at a property that will incur real estate taxes of on average of $28 per thousand.

Let me break it down, say there is a commercial property for sale at 200,000:

1.  Non-profit can buy it, fix it up and pay no real estate taxes.
2. For profit can buy it , fix it and increase valuation to 300,000 and be looking at approximately 8,000 per year in real estate taxes or 675 more per month forever!!

How does a for profit entity compete for this property.  The non-profit could actually offer 250,000 versus a 200,000 offer by the for-profit and be costing them less when they do not have to consider real estate taxes.  If you were the seller would you accept 200K or 250K??? 

If you are mad about the UMass deal, then you should be just as mad at the 5 deals listed above and not soley at UMASS for doing nothing different then has been done for years, just on a larger scale.