Writers Krisch and Mahan are asking the questions we intend to follow up on in the coming weeks. The tax laws, lending practices and city policies may be intertwined in a system that seems to be bringing down significant restaurants and retailers that their customers love.
Excellent! When government taxes incentivize empty business spaces, it's outrageous. My son owns a thriving coffee shop in SE Portland, and it's conceivable that city or county tax laws could make the shop's existence way more difficult and tenuous, even impossible.
i walk past can font on my morning walk every day…and was surprised, as were others, to see it had recently closed. allan: i’d love to see some additional/deeper reporting on the tax environment that the building owners apparently blame for making it more profitable to maintain an empty space than an occupied one. if true…IF true:)…that would be a hella story!
Can Font was a tenant in one of 4 commercial condos in the Cosmopolitan Condos block - specifically Unit C4 owned by Site Centers Corporation of Ohio.
Municipalities like the City of Portland, offer tax abatement incentives to encourage developers to invest in the development or redevelopment of neighborhoods in economic or physical decline. This is a way for the city to encourage private investment in improvements that can increase neighborhood business license and property tax income in the long-term future, but is abated for a specific period. When given to condo developments, these abatement incentives are passed to the condo buyers, after construction. (When the abatement ends, the condo owners are faced with sudden and usually expensive taxes which some cannot afford.) Two such examples are these: 1) The Strategic Investment Program (SIP) offers a 15-year property tax exemption on a portion of large capital investments. The program was created in the 1990s to induce large, capital-intensive facilities to locate and grow anywhere in Oregon. 2) The Enterprise Zone is a 3-year or 3 to 5-year property tax abatement program.
Without much research, I could not presume that the developer of the 1015 property received one or more of these abatements. However, the property appears to been first acquired for urban redevelopment in 2000 which means that any abatement obtained by Hoyt Street Properties has certainly expired. That appears to be possible looking at the Multnomah County Tax bill for the property. It had virtually no taxes in 2016 and began paying property taxes in earnest in 2017. Those values increased through 2021 and have decreased 2022-2024.
Consequently, full property taxes have been paid each of the years since Site Centers acquired the property and rather than increasing in cost each year, they've dropped in cost the last two of three years. So neither landlord nor tenant has any reason to cite property tax costs or benefits as a reason to close or to keep it vacant without lease income. Furthermore, a visit to Site Centers website shows that unit C4 is presently available for lease and they are accepting inquiries.
Yes, I would not doubt that the lease cost of the property makes it very difficult to profitably operate a restaurant there. This is common all over the world and certainly in Portland. Can Font apparently was there exactly seven years. We cannot know what there lease terms were, but should expect that their NNN lease included an annual inflation (upside) clause that increased their rent every year. So even as property taxes were dropping the last 3 years, the operator was continuing to pay increased rent. It's also likely that their lease was up for renewal in early 2025 and the landlord required the new lease include a continuation of annual rent increases on a COL multiplier or percentage of gross sales plan. It's a savvy RE investment company that likes to return profit to it's investors. Neither they nor the public seem to understand that restaurants cannot increase food and drink pricing annually to accommodate rent increases - while wage and food supply costs rise too. (And they have.) This is particularly true of established restaurants surviving on repeat customer business like Can Font. There appears to be a some vitriol and misrepresentation regarding the reasons for closure. Clearly, the operator felt the cost squeeze which so often occurs with successful restaurants in expensive leased spaces. What follows is a move or closure.
WHAT tax laws? City, county, state, federal? Can you get more specific information about these tax laws?
Writers Krisch and Mahan are asking the questions we intend to follow up on in the coming weeks. The tax laws, lending practices and city policies may be intertwined in a system that seems to be bringing down significant restaurants and retailers that their customers love.
Excellent! When government taxes incentivize empty business spaces, it's outrageous. My son owns a thriving coffee shop in SE Portland, and it's conceivable that city or county tax laws could make the shop's existence way more difficult and tenuous, even impossible.
i walk past can font on my morning walk every day…and was surprised, as were others, to see it had recently closed. allan: i’d love to see some additional/deeper reporting on the tax environment that the building owners apparently blame for making it more profitable to maintain an empty space than an occupied one. if true…IF true:)…that would be a hella story!
Can Font was a tenant in one of 4 commercial condos in the Cosmopolitan Condos block - specifically Unit C4 owned by Site Centers Corporation of Ohio.
Municipalities like the City of Portland, offer tax abatement incentives to encourage developers to invest in the development or redevelopment of neighborhoods in economic or physical decline. This is a way for the city to encourage private investment in improvements that can increase neighborhood business license and property tax income in the long-term future, but is abated for a specific period. When given to condo developments, these abatement incentives are passed to the condo buyers, after construction. (When the abatement ends, the condo owners are faced with sudden and usually expensive taxes which some cannot afford.) Two such examples are these: 1) The Strategic Investment Program (SIP) offers a 15-year property tax exemption on a portion of large capital investments. The program was created in the 1990s to induce large, capital-intensive facilities to locate and grow anywhere in Oregon. 2) The Enterprise Zone is a 3-year or 3 to 5-year property tax abatement program.
Without much research, I could not presume that the developer of the 1015 property received one or more of these abatements. However, the property appears to been first acquired for urban redevelopment in 2000 which means that any abatement obtained by Hoyt Street Properties has certainly expired. That appears to be possible looking at the Multnomah County Tax bill for the property. It had virtually no taxes in 2016 and began paying property taxes in earnest in 2017. Those values increased through 2021 and have decreased 2022-2024.
Consequently, full property taxes have been paid each of the years since Site Centers acquired the property and rather than increasing in cost each year, they've dropped in cost the last two of three years. So neither landlord nor tenant has any reason to cite property tax costs or benefits as a reason to close or to keep it vacant without lease income. Furthermore, a visit to Site Centers website shows that unit C4 is presently available for lease and they are accepting inquiries.
Yes, I would not doubt that the lease cost of the property makes it very difficult to profitably operate a restaurant there. This is common all over the world and certainly in Portland. Can Font apparently was there exactly seven years. We cannot know what there lease terms were, but should expect that their NNN lease included an annual inflation (upside) clause that increased their rent every year. So even as property taxes were dropping the last 3 years, the operator was continuing to pay increased rent. It's also likely that their lease was up for renewal in early 2025 and the landlord required the new lease include a continuation of annual rent increases on a COL multiplier or percentage of gross sales plan. It's a savvy RE investment company that likes to return profit to it's investors. Neither they nor the public seem to understand that restaurants cannot increase food and drink pricing annually to accommodate rent increases - while wage and food supply costs rise too. (And they have.) This is particularly true of established restaurants surviving on repeat customer business like Can Font. There appears to be a some vitriol and misrepresentation regarding the reasons for closure. Clearly, the operator felt the cost squeeze which so often occurs with successful restaurants in expensive leased spaces. What follows is a move or closure.
the city keeps raising taxes and driving businesses and people away, the more they raise taxes, the less tax revenue they collect.
the only explanation is that they don't want growth, they want to keep portland small, in fact smaller than it is today
Trumps America. So much winning