York’s city-owned, tax-exempt properties pinch its finances

York Mayor Kim Bracey has, several times, bemoaned tax-exempt properties that don’t contribute to the city’s bottom line.

The city, which has to balance a $96 million annual budget, misses more than $12 million each year in property tax revenue. With that money, the city could cover its annual pension payment, something officials say contributes to York’s financial woes. Some nonprofits offer payments in lieu of taxes to the city, but the $189,298 received in 2014 and $51,000 worth of in-kind contributions pale in comparison to $12 million.

The city itself and two of its agencies — the Redevelopment Authority and the General Authority — hold the deeds to 390 of York’s roughly 900 tax-exempt properties.

Those 390 properties, if put on the tax rolls, would bring in about $995,000 in annual property tax revenue. Minus City Hall, police headquarters and some fire halls, the figure is around $897,000 — enough money to pay for 13 firefighters’ salaries or 13 police officers’ salaries or nearly cover overtime costs for either department.

With tax-exemption challenging York’s finances, what is the third class city doing to get its parcels on the tax rolls? The city’s Redevelopment Authority is trying to find taxpaying buyers, although officials say it’s not that simple. The authority has requirements for who it sells to and it often does so at a loss.

The RDA can sell a vacant lot to a tax-exempt nonprofit and revitalize a neighborhood with no tax revenue, or it could wait for a taxpaying buyer, running the risk of the property’s vacancy lasting years.

‘Everything must go’

It’s impossible to get the city’s tax-exempt parcels down to zero, said Shilvosky Buffaloe, Redevelopment Authority secretary and interim director of the city’s Department of Economic and Community Development.

York needs a city hall, parking garages and police and fire stations. What the city gets out of its green spaces — 24 parks and more than 40 urban garden parcels — outweighs the money it loses from those properties yielding no revenue since they offer public benefits the government doesn’t, Buffaloe said.

But gardens and necessities aside, everything must go, he said.

The Redevelopment Authority, or RDA, holds deeds to 270 of the city’s 390 properties. The city’s General Authority owns 24.

Most of the RDA’s properties are empty, practically undevelopable plots of weeds. Some are smaller than a tenth of an acre and contain cost-prohibitive zoning hurdles and setback requirements that would shrink them considerably before any physical changes could be made, Buffaloe said. Nobody wants the grass, he said of the properties, some of which the RDA has owned throughout several mayoral administrations.

“People want to cherry-pick the easiest rehabs,” Buffaloe said.

The RDA owns 10 parcels in the 700 block of East Chestnut Street that have been vacant since a 2009 fire torched the entire block of row homes. The hope, Buffaloe said, is to establish an in-fill project once the RDA owns all 16 parcels on the block. Without the whole block, however, they can’t develop it.

The former Danskin property on North State Street, now mostly rubble, was recently bought by the RDA for $25,000. There is no shortage of concepts for what the 4.2 acres could be: A mall, hotel, church campus or nonprofit’s headquarters. Until the site is cleared, nothing can be done. If the RDA doesn’t buy those kinds of properties, they will continue to sit that way, Buffaloe said.

A seller’s market?

Selling a property is not as simple as slapping a “for sale” sticker on a building and holding Sunday open houses. The real estate market dictates interest in properties.

The authority is limited in what it can offer as incentives for prospective buyers, Buffaloe said. It occasionally grants loans on some developments, he said, and can maintain equity roles. The best incentive is discounting the sale price of a property to help reduce developers’ costs.

Officials want to recoup money spent on projects while trying to achieve a fair market value for the RDA and the prospective buyer, Buffaloe said. But the authority almost always sells its properties at a loss, Buffaloe said.

The city pumps more than $500,000 into its budget each year for the RDA, hoping it can sell to developers whose projects will make York money in the long run.

Buying properties like Danskin gives the city a level of control that allows them to steer the site’s redevelopment, said Kevin Hodge, a brokerage advisor with ROCK Commercial Real Estate.

“They may lose a little money, but they can oversee the sale, the buyer, developer and look at taxes and benefits it brings to the community,” Hodge said.

It would not do the city any good to sell a property to someone who doesn’t have plans for it or lacks the capital and resources to make the plan work. Sound economic development hinges on selling to a developer who wants to and can invest in the city. “What we want is a group of individuals doing frequent business with the RDA that we know,” Buffaloe said.

The objective is to not only get properties on the tax rolls but keep them there while attracting more residents and jobs, or what Buffaloe refers to as “walking wallets” to York.

‘Sound development’

The RDA has sold 50 properties in the last three years, which is a significant uptick from 2009 to 2011. In 2009 and 2010, Buffaloe said, he couldn’t give a building away. His agency sold three in 2011.

It takes months, sometimes years, for the RDA to acquire a property through condemnation, Buffaloe said. Giving away such properties without a thorough vetting process would be irresponsible, he said.

Officials review each applicant for four things: Are they in good standing with the city, do they have a solid grasp of their project’s scope, do they have the financial wherewithal to complete the project and does their proposal have any benefit for the city and neighboring property owners?

Mayor Bracey has detailed the kind of development it would take to offset the city’s tax-exempt losses and cover the annual deficit.

It would take either six Santander Stadiums, four York County Judicial Centers, three Susquehanna Commerce Centers, 35 Yorktowne Hotels or 75 White Rose Bar and Grills per year for the city to get its head above water, Bracey wrote in an opinion piece in the York Daily Record.

That won’t be happening, and anyway, Bracey and Buffaloe have said, the city can’t develop its way out of its financial problems.

‘Why not somewhere else?’

Mayor Bracey said she doesn’t discourage tax-exempt entities from seeking a home in the city, but she would prefer they consider a neighboring borough or township.

“There is a good cause behind tax exempt properties, but the city has enough,” Bracey said in an interview. “Why not somewhere else?”

The only municipality in York County with a higher percentage of tax-exempt real estate than York (37.5 percent) is Fawn Grove, which has 41.3 percent of its assessed real estate value off the tax rolls, according to York County tax records. North York is the next closest municipality with 24.1 percent, Fairview Township has 19.1 percent and Spring Garden Township has 12.4 percent of assessed value that is tax exempt.

Even if fully developed overnight, the RDA’s properties cannot balance the city’s budget, Buffaloe said. He and Bracey have suggested state-level policy changes that would allow third-class cities to levy city-specific taxes on things like alcohol to help offset their tax-exempt losses.

A bill proposed by state Rep. Michael Sturla, D-Lancaster, would have given counties the option to levy an additional 1 percent sales tax to help offset property tax woes, with certain percentages going to the three taxing bodies — county, school district and municipality.

The bill has been presented in successive sessions, to no avail, said Rep. Kevin Schreiber, D-York.

Another piece of legislation, Senate Bill 4, would give state lawmakers the authority to determine what entities would qualify as public charities and thus tax exempt. That bill needs House approval before it would go to a statewide referendum.

On the horizon

Dealing with the RDA has become an easier process over the last several years, said Tony Thomas, vice president of the Realtors Association of York and Adams Counties. Projects like the former Keystone Color Works building on West Gay Avenue — a key component to completing the Northwest Triangle — will hopefully bring more residents to the city, Buffaloe said.

As construction continues to convert the old warehouse into 29 luxury apartments, city officials are optimistic that the project, and potential developments by Royal Square at the old Woolworth building and other places, can breathe long-awaited life into the city’s tax base. Once tax-exempt properties managed by the RDA, both structures have sat vacant for years.

Buffaloe said the sales of those properties stand to bring a lot more than property tax revenue to York.

Thomas, who works for The Thomas Realty Group of PA under Keller Williams, said the city’s real estate prices are starting to rebound as revitalization takes off in certain areas of York.

People move to the city and they use their incomes to eat and shop in town, Hodge said, and it starts to snowball. “The snowball is starting to pick up momentum,” he said.

Contact Mark Walters at 717-771-2032.

---

What are York’s most valuable city-owned properties?

Through various entities, the city owns 390 tax-exempt properties with an assessed real estate value of $48.98 million.

If they paid property taxes, they would generate $997,787 annually.

Parks

24: City-owned parks

$20.98 million: Their total assessed value

$472,362: Annual revenue if they paid property taxes

$5.75 million: Assessed value of the city’s largest park, Memorial Park

General Authority

24: Properties owned by the city’s General Authority

$8.47 million: Their total assessed value

$172,644: Annual revenue if they paid property taxes

$3.09 million: Assessed value of the West King Street parking garage, the General Authority’s highest valued property

$6.21 million: Total assessed value of the city’s three parking garages

$126,646: Annual revenue if they paid taxes

Redevelopment Authority

273: Properties owned by the city’s Redevelopment Authority, or RDA

$10.66 million: Assessed value of RDA’s properties

$217,243: Annual revenue if they paid property taxes

42: Are urban gardens

34: Contain buildings

$2.42 million: Value of the RDA’s highest valued property, a parking garage at 243 W. Gas Ave.

City Hall, 101 S. George St.

Assessed at $2.83 million

If it were taxable: $57,600 in annual revenue

City of York Fire/Rescue Services’ six fire stations

Assessed at $884,910

If they were taxable: $18,000 in annual revenue

Police headquarters, 50 W. King St.

Assessed at $1.10 million

If it were taxable: $22,400 in annual revenue

Tax exempt properties across York County

City of York

15,330 total properties assessed at $1.58 billion

920 tax-exempt properties assessed at $592.7 million

6 percent of properties are tax exempt, 37.5 percent of city’s assessed real estate value tax exempt

Carroll Township

2,791 total properties assessed at $537,395,433

33 tax-exempt properties assessed at $50,351,070

1.2 percent of properties are tax exempt, 9.4 percent of its assessed real estate value are tax exempt

Chanceford Township

2,847 total properties assessed at $338,766,107

51 tax-exempt properties assessed at $17,630,670

1.8 percent of properties are tax exempt, 5.2 percent of its assessed real estate value are tax exempt

Codorus Township

1,814 total properties assessed at $281,645,905

28 tax-exempt properties assessed at $13,412,610

1.5 percent of properties are tax exempt, 4.8 percent of its assessed real estate value are tax exempt.

Conewago Township

3,889 total properties assessed at $595,294,077;

41 tax exempt properties assessed at $28,311,530

1.1 percent of properties are tax exempt, 4.8 percent of its assessed real estate value are tax exempt

Dover Township

9,753 total properties assessed at $1,149,368,128

91 tax exempt properties assessed at $37,572,670

0.9 percent of properties are tax exempt, 3.3 percent of its assessed real estate value are tax exempt

East Hopewell Township

1,151 total properties assessed at $169,855,868

8 tax exempt properties assessed at $1,478,870

0.7 percent of properties are tax exempt, 0.9 percent of its assessed real estate value are tax exempt

East Manchester Township

3,557 total properties assessed at $612,244,357

66 tax-exempt properties assessed at $19,293,700

1.9 percent of properties are tax exempt, 3.2 percent of its assessed real estate value are tax exempt

Fairview Township

7,960 total properties assessed at $1,629,409,537

117 tax-exempt properties assessed at $310,558,650

1.5 percent of properties are tax exempt, 19.1 percent of its assessed real estate value are tax exempt

Fawn Township

1,469 total properties assessed at $235,830,998

16 tax exempt properties assessed at $23,207,350

1.1 percent of properties are tax exempt, 9.8 percent of its assessed real estate value are tax exempt

Franklin Township

2,212 properties assessed at $296,958,266

51 tax-exempt properties assessed at $20,652,560

2.3 percent of properties are tax exempt, 7 percent of its assessed real estate value are tax exempt

Heidelberg Township

1,409 total properties assessed at $223,761,810

34 tax exempt properties assessed at $8,735,200

2.4 percent of properties are tax exempt, 3.9 percent of its assessed real estate value are tax exempt

Hellam Township

2,829 total properties assessed at $443,937,577

56 tax exempt properties assessed at $18,777,460

2.0 percent of properties are tax exempt, 4.2 percent of its assessed real estate value are tax exempt

Hopewell Township

2,407 total properties assessed at $439,828,675

39 tax-exempt properties assessed at $13,705,480

1.6 percent of properties are tax exempt, 3.1 percent of its assessed real estate value are tax exempt

Jackson Township

4,043 total properties assessed at $568,544,523

47 tax exempt properties assessed at $38,245,600

1.2 percent of properties are tax exempt, 6.7 percent of its assessed real estate value are tax exempt

Lower Chanceford Township

1,593 total properties assessed at $185,644,841

77 tax-exempt properties assessed at $12,137,620

4.8 percent of properties are tax exempt, 6.5 percent of its assessed real estate value are tax exempt

Lower Windsor Township

3,704 total properties assessed at $468,903,712

68 tax exempt properties assessed at $34,791,800

1.8 percent of properties are tax exempt, 7.4 percent of its assessed real estate value are tax exempt

Manchester Township

7,801 total properties assessed at $1,724,901,876

97 tax exempt properties assessed at $104,779,720

1.2 percent of properties are tax exempt, 6.1 percent of its assessed real estate value are tax exempt

Manheim Township

1,579 total properties assessed at $246,587,365

15 tax exempt properties assessed at $4,949,310

0.9 percent of properties are tax exempt, 2.0 percent of its assessed real estate value are tax exempt

Monaghan Township

1,271 total properties assessed at $206,175,620

14 tax exempt properties assessed at $2,919,380

1.1 percent of properties are tax exempt, 1.4 percent of its assessed real estate value are tax exempt

Newberry Township

7,221 total properties assessed at $821,802,256

83 tax exempt properties assessed at $28,812,430

1.1 percent of properties are tax exempt, 3.5 percent of its assessed real estate value tax exempt

North Codorus Township

3,828 total properties assessed at $538,153,951

46 tax exempt properties assessed at $19,969,792

1.2 percent of properties are tax exempt, 3.7 percent of its assessed real estate value are tax exempt

North Hopewell Township

1,373 total properties assessed at $182,122,616

13 tax exempt properties assessed at $4,071,570

0.9 percent of properties are tax exempt, 2.2 percent of its assessed real estate value are tax exempt

Paradise Township

1,828 total properties assessed at $233,074,138

18 tax exempt properties assessed at $12,954,140

1.0 percent of properties are tax exempt, 5.6 percent of its assessed real estate value are tax exempt

Peach Bottom Township

2,841 total properties assessed at $343,565,897

79 tax exempt properties assessed at $12,443,650

2.8 percent of properties are tax exempt, 3.6 percent of its assessed real estate value are tax exempt

Penn Township

6,747 total properties assessed at $1,296,991,459

96 tax exempt properties assessed at $146,907,955

1.4 percent of properties are tax exempt, 11.3 percent of its assessed real estate value are tax exempt

Shrewsbury Township

3,012 total properties assessed at $630,053,319

63 tax exempt properties assessed at $43,167,190

2.1 percent of properties are tax exempt, 6.9 percent of its assessed real estate value are tax exempt

Springettsbury Township

9,121 total properties assessed at $2,300,618,098

154 tax exempt properties assessed at $223,816,110

1.6 percent of properties are tax exempt, 9.7 percent of assessed real estate value are tax exempt

Springfield Township

2,495 total properties assessed at $448,605,521

37 tax exempt properties assessed at $16,586,930

1.5 percent of properties are tax exempt, 3.7 percent of assessed real estate value are tax exempt

Spring Garden Township

5,207 total properties assessed at $1,083,683,714

100 tax exempt properties assessed at $134,281,590

1.9 percent of properties are tax exempt, 12.4 percent of assessed real estate value are tax exempt

Warrington Township

2,358 total properties assessed at $316,292,459

49 tax exempt properties assessed at $13,774,460

2.1 percent of properties are tax exempt, 4.4 percent of its assessed real estate value are tax exempt

Washington Township

1,275 total properties assessed at $167,389,836

20 tax exempt properties assessed at $7,532,460

1.6 percent of properties are tax exempt, 4.5 percent of its assessed real estate value are tax exempt

West Manchester Township

7,834 total properties assessed at $1,462,034,510

139 tax exempt properties assessed at $75,018,796

1.8 percent of properties are tax exempt, 5.1 percent of its assessed real estate value are tax exempt

West Manheim Township

3,421 total properties assessed at $637,576,051

61 tax exempt properties assessed at $44,353,986

1.8 percent of properties are tax exempt, 7.0 percent of its assessed real estate value are tax exempt

Windsor Township

7,234 total properties assessed at $1,152,996,152

85 tax exempt properties assessed at $43,347,380

1.2 percent of properties are tax exempt, 3.8 percent of its assessed real estate value are tax exempt

York Township

10,973 total properties assessed at $2,200,830,713

156 tax exempt properties assessed at $117,959,800

1.4 percent of properties are tax exempt, 5.4 percent of its assessed real estate value are tax exempt

Township Totals

140,847 total properties assessed at $24,170,845,365

2,148 tax exempt properties assessed at $1,706,509,489

1.5 percent of properties are tax exempt, 7.1 percent of township real estate value is tax exempt

Boroughs

Cross Roads Borough

221 total properties assessed at $28,963,760

4 tax exempt properties assessed at $436,310

1.8 percent of properties are tax exempt, 1.5 percent of its assessed real estate value are tax exempt

Dallastown Borough

1,371 total properties assessed at $158,261,450

42 tax exempt properties assessed at $9,293,150

3.1 percent of properties are tax exempt, 5.9 percent of its assessed real estate value are tax exempt

Delta Borough

322 total properties assessed at $31,769,360

18 tax exempt properties assessed at $1,502,690

5.6 percent of properties are tax exempt, 4.7 percent of its assessed real estate value are tax exempt

Dillsburg Borough

1,046 total properties assessed at $144,860,132

38 tax exempt properties assessed at $12,593,980

3.6 percent of properties are tax exempt, 8.7 percent of its assessed real estate value are tax exempt

Dover Borough

675 total properties assessed at $91,892,992

27 tax exempt properties assessed at $15,455,050

4 percent of properties are tax exempt, 16.8 percent of its assessed real estate value are tax exempt

East Prospect Borough

388 total properties assessed at $42,509,162

12 tax exempt properties assessed at $1,896,390

3.1 percent of properties are tax exempt, 4.5 percent of its assessed real estate value are tax exempt

Fawn Grove Borough

233 total properties assessed at $47,986,510

12 tax exempt properties assessed at $19,820,470

5.2 percent of properties are tax exempt, 41.3 percent of its assessed real estate value are tax exempt

Felton Borough

252 total properties assessed at $25,733,850

13 tax exempt properties assessed at $785,160

5.2 percent of properties are tax exempt, 3.1 percent of its assessed real estate value are tax exempt

Franklintown Borough

247 total properties assessed at $22,014,070

9 tax exempt properties assessed at $1,170,430

3.6 percent of properties are tax exempt, 5.3 percent of its assessed real estate value are tax exempt

Glen Rock Borough

800 total properties assessed at $114,092,080

33 tax exempt properties assessed at $4,175,590

4.1 percent of properties are tax exempt, 3.7 percent of its assessed real estate value are tax exempt

Goldsboro Borough

380 total properties assessed at $40,801,390

16 tax exempt properties assessed at $1,325,250

4.2 percent of properties are tax exempt, 3.2 percent of its assessed real estate value are tax exempt

Hallam Borough

861 total properties assessed at $114,776,179

12 tax exempt properties assessed at $3,199,020

1.4 percent of properties are tax exempt, 2.8 percent of its assessed real estate value are tax exempt

Hanover Borough

6,472 total properties assessed at $1,080,069,688

219 tax exempt properties assessed at $105,655,463

3.4 percent of properties are tax exempt, 9.8 percent of its assessed real estate value are tax exempt

Jacobus Borough

760 total properties assessed at $118,296,619

22 tax exempt properties assessed at $3,535,240

2.9 percent of properties are tax exempt, 3 percent of its assessed real estate value are tax exempt

Jefferson Borough

319 total properties assessed at $37,985,570

20 tax exempt properties assessed at $3,436,820

6.3 percent of properties are tax exempt, 9 percent of its assessed real estate value are tax exempt

Lewisberry Borough

159 total properties assessed at $18,454,370

10 tax exempt properties assessed at $1,523,930

6.3 percent of properties are tax exempt, 8.3 percent of its assessed real estate value are tax exempt

Loganville Borough

545 total properties assessed at $83,656,590

16 tax exempt properties assessed at $4,576,860

2.9 percent of properties are tax exempt, 5.5 percent of its assessed real estate value are tax exempt

Manchester Borough

914 total properties assessed at $122,668,055

29 tax exempt properties assessed at $24,397,240

3.2 percent of properties are tax exempt, 19.9 percent of its assessed real estate value are tax exempt

Mount Wolf Borough

547 total properties assessed at $62,737,510

21 tax exempt properties assessed at $6,219,400

3.8 percent of properties are tax exempt, 9.9 percent of its assessed real estate value are tax exempt

New Freedom Borough

1,924 total properties assessed at $375,381,140

51 tax exempt properties assessed at $15,680,130

2.7 percent of properties are tax exempt, 4.2 percent of its assessed real estate value are tax exempt

New Salem Borough

354 total properties assessed at $53,179,695

13 tax exempt properties assessed at $2,946,080

3.7 percent of properties are tax exempt, 5.5 percent of its assessed real estate value are tax exempt

North York Borough

766 total properties assessed at $87,215,887

26 tax exempt properties assessed at $21,028,380

3.4 percent of properties are tax exempt, 24.1 percent of its assessed real estate value are tax exempt

Railroad Borough

130 total properties assessed at $16,084,715

11 tax exempt properties assessed at $2,728,030

8.5 percent of properties are tax exempt, 17 percent of its assessed real estate value are tax exempt

Red Lion Borough

2,404 total properties assessed at $297,081,978

80 tax exempt properties assessed at $52,377,710

3.3 percent of properties are tax exempt, 17.6 percent of its assessed real estate value are tax exempt

Seven Valleys Borough

216 total properties assessed at $24,052,290

7 tax exempt properties assessed at $1,216,170

3.2 percent of properties are tax exempt, 5.1 percent of its assessed real estate value are tax exempt

Shrewsbury Borough

1,511 total properties assessed at $318,082,760

43 tax exempt properties assessed at $29,442,880

2.8 percent of properties are tax exempt, 9.3 percent of its assessed real estate value are tax exempt

Spring Grove Borough

901 total properties assessed at $126,034,099

27 tax exempt properties assessed at $7,642,000

3 percent of properties are tax exempt, 6.1 percent of its assessed real estate value are tax exempt

Stewartstown Borough

860 total properties assessed at $140,585,725

29 tax exempt properties assessed at $8,323,930

3.4 percent of properties are tax exempt, 5.9 percent of its assessed real estate value are tax exempt

Wellsville Borough

136 total properties assessed at $16,939,530

15 tax exempt properties assessed at $1,440,440

11 percent of properties are tax exempt, 8.5 percent of its assessed real estate value are tax exempt

West York Borough

1,742 total properties assessed at $170,999,964

39 tax exempt properties assessed at $23,784,756

2.2 percent of properties are tax exempt, 13.9 percent of its assessed real estate value are tax exempt

Windsor Borough

512 total properties assessed at $48,643,285

26 tax exempt properties assessed at $2,896,310

5.1 percent of properties are tax exempt, 6 percent of its assessed real estate value are tax exempt

Winterstown Borough

279 total properties assessed at $40,234,230

6 tax exempt properties assessed at $3,521,390

2.2 percent of properties are tax exempt, 8.8 percent of its assessed real estate value are tax exempt

Wrightsville Borough

1,007 total properties assessed at $107,099,024

46 tax exempt properties assessed at $11,175,980

4.6 percent of properties are tax exempt, 10.4 percent of its assessed real estate value are tax exempt

Yoe Borough

319 total properties assessed at $32,451,545

12 tax exempt properties assessed at $1,578,760

3.8 percent of properties are tax exempt, 4.9 percent of its assessed real estate value are tax exempt

Yorkana Borough

104 total properties assessed at $12,247,610

10 tax exempt properties assessed at $1,719,430

9.6 percent of properties are tax exempt, 14 percent of its assessed real estate value are tax exempt

York Haven Borough

254 total properties assessed at $19,624,560

11 tax exempt properties assessed at $1,621,680

4.3 percent of properties are tax exempt, 8.3 percent of its assessed real estate value are tax exempt

Borough Totals

29,931 total properties assessed at $4,273,467,374

1,025 tax exempt properties assessed at $410,122,499

3.4 percent of properties are tax exempt, 9.6 percent of its assessed real estate va