SitNews - Stories in the News - Ketchikan, Alaska


Prop. #1 Tax consequences
By Chris Parks


October 01, 2007
Monday PM

Thank you Mr. Cragun for inquiring about the facts of the tax consequences of this initiative, and desiring to be a more informed voter!

The stated intent of this initiative is to 'disperse' jewelry stores so that more year-round businesses can enter the downtown and newtown business district. Unfortunately, it WILL have the effect of eliminating many jewelry stores, because as the cruise ship docking scenario changes with our berth developments, jewelry stores will be severly restricted from moving from low traffic areas to high traffic areas; and if they do, the costs will be so high that in many cases it won't even be economically viable for them to do so. Jewelry stores who are in marginal areas wll close, and less and less new ones will open. As we seen over the last 2 seasons, 6 to 8 jewelry stores have already closed.

How will this affect our taxes? First, sales tax revenues will start to decline, because we will have less stores, and the cruise lines will promote Ketchikan less as a shopping port, because the majority of the jewelry stores pay enormous fees to the cruise lines to promote their stores. Year-round stores will not replace jewelry stores, as the petition sponsors would have you believe, because we don't have a year-round economy anymore, like we did when the mill was open, and the logging and fishing industries were booming. In addition, future investments in our downtown community will be limited, because of the restrictions placed on commercial property owners; just look at the proposed $30 million project in newtown, that the developers say will be canceled if this initiative passes.

A community not only needs to maintain a sales tax base, they need to have yearly increases in sales tax revenues to maintain tax supported services and goverment, because the cost of providing services and government continues to increase, regardless of what the tax revenues are. That puts our community in a position of deciding between reduced services or higher taxes, and we probably would see both.

As far as commercial property values and assesments, they not only will go down, but will also not see future gains, because future property investments and improvements will be discouraged and impeded by this ordinance, if enacted. How do I know this? Because I manage and operate 7 major commercial properties in Ketchikan, 3 downtown, and 4 in the west end. The downtown land value assesments are 4 to 5 times higher per square foot than those of the west end properties, because one component of assesments and appraisals is the ability to generate income; obviously the income generation potential downtown is much higher than in the west end, because of the proximity to the cruise ships. This initiatve, by restricting jewelry stores to every 200 feet, WILL lower the value, and eventually the assesments of every other property in between, because in will restrict their ability to generate income. In addition, we will see less future developments and invesments in the commercial sector, resulting in a shrinking rather than growing tax base; again, we are put in the situation as a community of having to decide between reduced services or higher taxes, and remember, property taxes are one of the major funding sources for our schools.

The sponsors of this initiative consulted no one with expertise in the retail and cruise ship industry, to determine that this initiative would achieve its stated intent. While their desire is to see the town like it was 15 years ago, and is understandably sentimental to them, the reality is that things change with time, and to truely protect our economy, our employment and business opportunities, and our future, we as community need to change with times, as we have since the inception of Ketchikan.

It is misleading to present this initiative as 'good for our future', or as 'community planning', because without expertise, facts, knowledge, and input by all affected parties, it is no plan at all.

Please join me and VOTE NO on Proposition #1.

Chris Parks
Ketchikan, AK

About: "Retail Business and Commercial Property Manager/owner. 28 years retail and business experience, 9 in Ketchikan, 19 in the lower 48."

Received September 29, 2007 - Published October 01, 2007


Related Viewpoint:

letter Proposition 1 By Scott Cragun

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Ketchikan, Alaska