Can anything be done about vacant and abandoned commercial buildings? (Part II)

The city has made some recent changes on this front, but they don't apply to buildings on our part of Central so much

Some cities impose extra taxes and fees on vacant buildings, though implementation is difficult

Other ideas include creating a generally friendlier business environment or getting the city involved as a real estate developer
Editor's note: Last week, we surveyed the general situation with vacant and abandoned buildings around Greater Downtown (especially Central), talked to the owner of one such structure, and explored why they seem to be exempt from the laws of supply and demand. Today, we look at how the city approaches the problem, what other cities do, and what we might learn from them.
Back in 2016, City Councilors Pat Davis and Don Harris found themselves fielding lots of complaints about a series of vacant and run-down commercial buildings in their adjacent districts, which cover the area roughly from UNM to Tramway and south to the city limits, including a seven-mile stretch of Central. The buildings attracted homeless encampments, sometimes featured the decaying carcasses of animals, and resulted in frequent calls to police.

"It drags down our quality of life," Harris told the Journal at the time. (He has since retired from the council.)

Fed up with the situation, the duo successfully shepherded a bill through the City Council slapping a series of new requirements on building owners: Keep the weeds down, fix broken building facades, get ahold of flaking paint, fix broken doors and windows, cover up graffiti, and make sure the outdoor lighting is up to code, among other rules.

The bill, which then applied only to the two councilor's districts, passed, and Mayor Richard Berry signed it on May 3, 2017.

The requirements boiled down to "you have to be a good neighbor," Davis told DAN. The goal was to keep buildings at least up to the point where "somebody could sign a lease, walk in, and get going."

The plan had some success. Within two years, 18 owners of problem structures had decided to sell, two had been torn down, and four had been taken to court, Davis said. The council subsequently took the ordinance citywide, something he counts as a victory not just for functioning buildings but also for neighboring commercial ventures.

"It helped the business owner focus on their business and not clean up their neighbor's mess," he said.

The array of options, such as it is
Though it is one of the newer ones, Davis's ordinance is not the only tool for dealing with vacant properties, particularly when things get out of control.

For example, if someone is breaking into a vacant building and running an informal brothel on the premises, or a drug manufacturing operation, or any number of 80 other offenses that qualify as a nuisance, the city can force the property owner to fix the situation under penalty of fines or even a jail term of up to 90 days.

Finally, for properties that are completely abandoned for at least three years, there is a procedure for the state to eventually sell the property to cover the unpaid taxes.

But here's the problem: The vacant Downtown area buildings we cataloged last week (and many more we didn't have space for) may elicit more than their share of complaints, but they are not generally dilapidated to the point of having city ordinances kick in and they do not appear to meet the definition of a nuisance. (Exceptions to the dilapidated rule include the Kress Building and former Café Oaxaca, and we will investigate those further in the coming weeks.) And so far as can be discerned from an extensive search of property tax records, the owners all appear to be quite scrupulous about paying their bills. 

In other words, things may be bad enough to ruin the vibe, but ruining the vibe does not in itself violate city ordinances. 

"If there's no calls for service and they're keeping the property maintained, there's really nothing the city can do," said Pete Dinelli, who headed up a nuisance abatement program called the Safe City Strike Force for former Mayor Martin Chávez. Among many other projects, the program was behind the demolition of a square block's worth of homes in Wells Park, and the vacant land is now slated to become a park.

The program, which generally enjoyed an aggressive reputation, subsequently evolved into ADAPT under Mayor Tim Keller (DAN, 10/19/20). Dinelli is no fan, believing that ADAPT could do more, but he still doesn't hold out much hope for doing something about the structures Downtown. 

"I believe in being proactive," he said, "but the reality is you have to have a legal basis to do that."

Carrots and sticks
Local governments do have other options if they're trying to get a handle on vacant commercial buildings, and typically, that starts with creating a compulsory registry, which acts both as a big convenient list and a foundation on which all sorts of other policies can be built.

If a city is looking to take a carrot-type approach, it could take that list and use it as an outreach tool to see if there's anything it can do to help owners find tenants, prep for a sale, or even seek out grant money for some sort of renovation.

If a city is looking to take a middle-of-the-road approach, it can impose a fee - typically on an annual basis - to help it pay for the larger effort that vacancies tend to impose on municipalities. Minneapolis charges $7,087 per year "to recover all costs incurred by the city for monitoring and regulating vacant buildings, including nuisance abatement and administrative costs." The fees, however, are all over the map: Just across the Mississippi River, St. Paul charges $2,459. Albuquerque has a similar program just for residential buildings, and it charges $204. 

Registries can also provide the foundation for a city looking to motivate owners to get a property leased out or sold as quickly as possible. That annual fee can go up over time, as in Tucumcari, where the first year costs $500 and the second year costs $1,000. The fee can come with an annual inspection. The list of standards a vacant building must meet can also, in theory at least, be ratcheted up from the obvious basics like keeping the weeds down.

Some municipalities like Washington, D.C. go so far as to levy extra property taxes on vacant buildings. Instead of the normal rate of up to $1.85 per $100 in assessed value, the charge is $5 per $100 for vacant buildings and $10 for buildings it classifies as blighted.

Implementing anything like that, however, looks to be exceedingly difficult, not least because many property owners with a vacancy or the possibility of a vacancy wouldn't like it much. 

"We would have a political challenge to get that through the City Council," Davis said. 

Even if some flavor of registry and inspection regime could become law, "you have to have the manpower to go out and do the inspections," Dinelli said, implying that the city, which is struggling to hire everyone from 911 operators to lifeguards (a national problem, to be fair), might not be able to pull it off.

"The actual operationalization of it - that can be the tricky part," said Rhea Serna, a consultant who wrote a white paper on vacant properties for New Mexico MainStreet in 2019. "They can be very human resource intensive."

There are other problems: Fees, even graduated ones, probably don't mean much to a larger company that owns a property, but it can hit small-time owners hard, Serna said. New Mexico law doesn't presently allow for an extra property tax, she added, and both Las Vegas and Tucumcari had trouble with property owners simply not cooperating with the ordinance in the first place. And there's not a great deal of evidence that, where they are legal, the extra taxes work.

Though her report recommended annual inspections and graduated fees, Serna has since done something of a u-turn. Keep the registry, she reckons, but use it to establish relationships with property owners and, when possible, help them figure out a plan.

Plenty of people will also argue that instead of focusing on individual property owners who might have compelling reasons for keeping a place vacant, local government should instead focus on managing the larger outside factors that contribute to vacancies in the first place. Avoid disruptive public works projects like ART and smooth out the "painstakingly slow and redundant" development process, Metro Commercial Realty broker Clay Azar said, and the situation might get better on its own. Punitive taxes and fees, he said, would only amount to "more government overreach and regulation that just hurts the economy."

Still another option might be to just have the city buy a property and do something with it - anything from a tear-down to a renovation to using it as affordable housing. The practice, called land banking, has a long history, and possibly more political support.

"That's certainly the one that intrigued us the most," Davis said.

City Councilor Isaac Benton has also spoken favorably of the idea, particularly as it relates to affordable housing.

The Keller administration, meanwhile, declined to say much when we asked it to weigh in, respectively, on expanding the city's vacant building registry to include commercial buildings, the prospect of graduated taxes and fees, and land banking.

"The city cannot speculate on programs that are not in place in our city," Faford-Johnson said. "We believe sale and development of property is a private sector activity, but are happy to support developers in any way possible as they work to fill vacant buildings."
Downtown Albuquerque News covers Greater Downtown, which we generally define as the area surrounded by I-40, the Rio Grande, Av. César Chávez, and I-25. We publish weekdays except for federal holidays. If someone forwarded DAN to you, please consider subscribing. To subscribe, contact us, submit a letter to the editor, or learn more about what we do, click here. If you ever run into technical trouble receiving DAN, click here.
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