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Where has our plan taken us in the past five years?

Land values and commerical development.

Shorewood Village Board members have publicly announced their support of existing policies aimed at shifting more of our taxes to commercial development.


In reality, it is not likely that we're going to be able to attain sufficient development to make a meaningful shift.


Recent experience shows an inclination toward down-scaling the size of family operated and specialized shops, primarily because of the high rent costs.


Down-scaling is not merely related to the actual function of the business but to limited clientèle and to the value of land reflected in rent.


Commercial land costs in the north shore area of Milwaukee are relatively high. This raises the question as to whether commercial development is a clearly thought out and viable policy.


Schwartz's Bookstore and specialty clothing operations such as Harley's for example cannot operate here too well without reducing their rental costs.


If Schwartz's had not decided to go out of business, Shorewood might have subsidized the bookstore just as we did the clothing store. Yet we wouldn't be sure that a one-time contribution would do it.


We actually subsidize a number of development projects through our Tax Incremental Financing operations.


Although we haven't accepted the concept that small is beautiful in the same way that we have accepted that small is economical, Shorewood may have to eventual acknowledge that we have to subsidize small if we want new businesses in our village.


And small businesses seem more appropriate. If we are going to subsidize small business, are they going to be viable and sufficient in number to accomplish this tax transfer?


On the other hand businesses requiring large areas of land like Pick-n-Save not only for their actual operation but for parking as well, seem to be able to carry the apparent high cost of land more lightly.


This can be somewhat attributed to high volume operation. Yet there may be other assisting or hidden subsidizes within the operation of the business itself. There may also be a relatively under assessed value of their the total property for various reasons, including the parking lot feature. .


It seems however, that efficiencies are mostly internal. Much of their holdings show up on their books at the much lower acquisition figures of past years. Rents on the other hand are more or less reflective of today's values.


So, on one hand, we are deliberately subsidizing small businesses, while large operations seem to carry the high cost of land without as much local community subsidy.


This situation should inevitably have an effect on public policies. Local government while desirous of small businesses will not be able to resist and shall inadvertentedly encourage big box operations.


Sunrise was one of these large operations and its involvement in this unsuccessful proposal never-the-less resulted in a raised land price, now suddenly reduced because of the general economy. These factors now will certainly delay commercial development on this site.


I believe that because large operations attract their clientèle from a large area and on a regular basis that the resulting revenue goes a long way in carrying the high cost of land. Therefore, this will not generally discourage their interest in Shorewood.


It follows then , that even though we may support down-sizing, it is more likely that we we shall continue to consider the development of larger entities over the smaller ones. Yet even larger commercial development may not result in shifting more of our tax costs to commercial use.


I think that small businesses are more appropriate for Shorewood. But I don't believe that we should pursue a policy of encouraging commercial development merely to shift taxes to commercial property.


Our experience shows that we are not going to have as desirable results as some think we are.


Nor do I believe that we should try to increase the tax base by attracting commercial development merely for increasing the tax base.


With the continued trend of trustees retaining their seats as unopposed incumbents, we are not likely to see a substantial review of existing policy.


Our present policy hasn't been all that successful in the last five years. Nor is it likely to do better in the next five years. And we aren't going to see anyone at Village Hall taking this new perspective.


Never-the-less, if the Board gives serious consideration to this, they shall determine that both Capitol and Oakland require a different plan if our redevelopment is at all to be even minimally successful. 


We need to ask, where has our plan taken us in the past five years?  Where will it take us in the next five?

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