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Vacancies Tax Downtown’s Viability

January 8th, 2010 by dk

Whenever Eugene makes its list of New Year’s Resolutions, revitalizing downtown is always near the top. So it should come as no surprise that the city has hosted open houses this week and is launching a website ( to gather ideas and momentum for revitalizing downtown.
Jerry’s Home Improvement has Christmas lights for half off. Bi-Mart is displaying their vast array of storage bins. Health clubs have slashed initiation fees. Everybody wants to lose ten pounds before swimsuit season. And Eugene wants your ideas for improving downtown. Happy New Year.
Eugene city staffers this time are taking their cue — or cues — from a divided city council. They have separated this community conversation into two parts. First they want to hear what Eugene residents would like for their downtown. How to pay for any improvements will be part of the later discussion.
A two-part conversation may be a political necessity. Some city councilors believe downtown should be a higher priority and merits greater funding. Other city councilors fear throwing good money after bad. Getting both sides to agree to pay for improvements won’t be easy. Nobody wants to flush money down a rat hole, especially if it might not at least rid them of some rats.
So crafting a vision before asking for money makes some sense. As the Mad Hatter told Alice in Wonderland, “If you don’t know where you’re going, any road will take you there.”
But the Mad Hatter didn’t live in the real world. Watergate informant Deep Throat did, and his advice may be more relevant in this instance: “Follow the money.”
Everyone agrees that downtown first must be safe, second clean, third attractive. Once those three basic needs are met, then people will come and businesses will open and the virtuous cycle of commerce can begin.
In 1988, Downtown Eugene Inc. (DEI), a private association of downtown property and business owners, was formed to care for downtown’s most basic needs. DEI contracts with the city to administer the city’s Downtown Services District. The “red caps” you see downtown are funded by DEI. If you’re downtown early in the morning and you see a person with a leaf blower, that’s probably also DEI money being spent.
But follow the money. DEI is funded by a Special Services District Occupancy Fee. The enabling city ordinance specifically exempts empty buildings.
You can see the logic. An empty building produces no revenue, and should require no services. So why charge the property owner when nobody is using the space? I’m sure that made sense on paper, but the real world again suggests a different logic.
Busy storefronts have merchants inside. They open their doors and sweep their sidewalks. They shoo away miscreants. They call the police when things get out of hand. Empty buildings don’t do any of that. Empty buildings cause most of the trouble downtown, yet their owners pay less for the services that aim to keep downtown safe, clean and attractive.
Follow the money to one source of the problem. Downtown property owners pay less if their buildings are empty, but those empty buildings cause the problems that require money to fix. The vision and the funding are intertwined, even if those two conversations about downtown are being kept separate.
Other cities have used a vacancy tax to get property owners to fill their buildings. That might be worth exploring, but an easy first step in that direction would be an amendment to the city’s ordinance. It still can be called an “occupancy fee.” A building occupies space downtown, even if nobody occupies its spaces inside.
Once downtown property owners are required to pay the fee, whether their space is occupied or not, they’ll begin to see what the rest of us see. Only through a Lewis Carroll Looking Glass could downtown’s blight look bright, but that’s the distorted view we’ve created for property owners. For the past 20 years, we’ve rewarded downtown landlords who refuse to fill their buildings with tenants.
Correcting that mistake would be a good place to begin the new year, and it should be easier than losing those extra ten pounds.
Don Kahle ( writes a column each Friday for The Register-Guard. Past columns are archived at

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