Downtown Venue Suffers from City’s High Valuation

Wednesday, June 20, 2012

Ashley Klann, GoLocalWorcester Contributor

One of Worcester’s most iconic venues that brings thousands of visitors to the city has been hit with a crippling property valuation increase. The hit to this downtown business comes at a time when the city is pouring time, money, and concrete into the area, and concern has been voiced both from The Palladium’s owner and by city councilors.

The Figures Behind the Problem

The Palladium, a downtown venue that host shows from metal festivals to rappers, was built in 1972 and has brought droves of fans to the area each year.

During the city’s most recent revaluation, the property's value rose from $688,700 to $2.26 million, an increase that has caused owner, John Fischer, a deal of anxiety.

“The facts speak for themselves,” he said, adding that they will be filing an abatement this week to fight the increase. “After we file we will know where we stand. It’s pretty obvious the building is old and is in need of a lot of repairs.”

The property was recently described in at a city council meeting as a “tired property,” and when compared to other slight reassessment figures around the city, this significant increase came as a surprise.

“It’s very old and not very attractive. It’s an embarrassment to have next to the court house,” Fischer said.

Despite this hike, Fischer says that demolition isn’t going to happen.

Rumors of Demolition

City Assessor, William Ford, says that the assessment process has caused many owners to threaten to tear down their buildings.

“We have different property owners threatening to tear down. There’s nothing new about this year. In the past, they’ve said they’d tear their buildings down,” he said. “They ask, ‘If I tear down the building, will my costs go down?’ I’m not telling you to tear down your building.”

Of course, demolition would decrease the property value, but Ford says this is simply a threat that many voice when they see their valuations.

The Palladium, which was recently rumored to be the site of more courthouse parking, released a statement to set the record straight: “Despite false rumors of The Palladium closing we are open and have no plans to close our doors. Yes Taxes are up 200%... While the tax and rent increase will put us in a difficult position financially we will do our best to make things work while the tax appeal process plays out.”

The Root of the Problem

The root of the issue at The Palladium and many other businesses across the city is the amount of increase they saw in this year’s property assessment. According to the city’s assessor, if previous assessments had been done more reasonably, there might not have been such a jarring increase this year.

“The interesting thing that’s going on – 50 percent of businesses are seeing a reduction,” Ford said. “That’s largely because there was no consistency in the process.”

The Palladium was last purchased for $1.3 million in 1990.

"The big issue now is the significant increase. The rate was consistently around $624,000, $625,000 for the last five years,” he said. “For something purchased for $1.3 million in 1990,
There might be an issue there.”

In last council’s meeting, The Palladium’s increase was compared to the situation at the McDonald’s restaurant on Shrewsbury Street, which saw a much less upsetting increase. Despite this inequality, Ford says the matter is not valid.

“The Palladium is 35,800 square feet. No matter how I look at it, it’s not a valid comparison.

That McDonald’s is only 3,300 square feet. One is ten times the size of the other,” he said. “We are not using the business’ income but projected rental costs. McDonald’s might make more selling their hamburgers, but that’s not what we look at. We can only look at rent.”

Council’s Call to Action

Worcester city council has discussed the assessment woes for local property owners.

“Hopefully it’s not too tough for the assessor’s office, because, Mr. Mayor, there are several things that concern me. When assessment equals value, we lose out,” said Councilor Philip Palmieri.

“The Palladium is a tired property. How it went up that much, being so tired, is beyond me,” he said. “I hope that the city manager will reach out (to the owner), in light of the discussion of demolition, which would not be in anyone’s best interest.”

He also encouraged discussion of other developers, including colleges that could use it as an arts venue. This however, Ford says, is not their responsibility.

“We cannot contact individual owners. They have the right to file abatement,” Ford said. “We cannot reach out to each individual property owner. Our way of contacting them, is in the tax bill notification of their rights and how to file for an abatement.”

Still, Palmieri says that the assessment shouldn’t be a burden to downtown businesses that are so crucial to the city.

“We don’t need a hole in the downtown because of the assessments. The assessment has caused enough problems,” he said.