INVESTIGATION: Worcester’s Top Tax Offenders
Friday, March 02, 2012
The owners of the Irish Times owe Worcester $300,000 in property taxes
During these very challenging economic times businesses are having a hard time staying profitable and in turn that means fewer dollars going to city hall coffers.
The business that owes the most is the now closed, Irish Times Bar on Main Street in Worcester. The company that owns the Irish Times owes the city more than $300,000. The bar owes five-years of back taxes.
Downtown entertainment challenges
Worcester commercial realtor Paul Matt of Kelleher & Sadowsky said “It is hard for a bar like the Irish Times to be successful, because residents tend to work downtown, but go out to eat and drink in different parts of the city like Shrewsbury Street.”
Tom Zidelis, the Chief Financial Officer for Worcester told GoLocalWorcester the city collects about $200 million in property taxes each year from the roughly 49,000 taxable properties.
Reaching out to the tax offenders
GoLocal called several of the companies on the list. Many of them are out of business with their phone lines shut off and their Web sites taken down.
GoLocalWorcester was able to reach the owner of Jim & Sons Auto Repair on Summer Street. James Dunn, the owner, said, “I don’t think it is anybody’s business what I owe. I can’t imagine I’m in the top 20.” He’s actually number 13. Dunn owes more than $12,000, according to city records. Dunn asserts that the city records are not correct.
Zidelis said there are 44 active land court cases being fought in court in Boston.
Municipal tax lien auctions
Foreclosure are the ultimate enforcement tool
Several of the top twenty properties with the highest outstanding tax bills are currently in the process of being foreclosed on by the city. Zidelis said, “Foreclosure is the ultimate enforcement tool.” Zidelis said it really is a last resort because it is not an easy process to foreclose on these properties. However, the upside is if they do foreclose on a piece of land the city can become a whole and even make some extra money by selling the land. Normally the lien is worth less than the value of the land.
Worcester's commercial real estate market
Worcester Regional Research Bureau surveyed property owners and leasing agents of the 75 properties downtown identified as containing some amount of office space.
Chief findings of The Research Bureau’s 2011 survey include:
• Among the buildings surveyed in its 2011 Downtown Office Occupancy Survey, The Research Bureau found an overall occupancy rate of 79%. For Class A space, the rate was 84%, Class B 74%, and Class C 87%.
• This represents a statistically insignificant change from 2010’s occupancy rate of 81%. However, over the past five years, there is a clear trend towards greater vacancy rates in downtown. In 2006, The Research Bureau found the occupancy rate to be 89%.
• Leasing rates in downtown begin at $6 per square foot for Class B and C space and $11 per square foot for Class A.
• At least 21 buildings downtown have 10,000 or more square feet available for lease.
• The vacancy rate in downtown Worcester does not seem to be high relative to other urban markets, or other markets in Massachusetts. According to Collier’s International, the I-495 corridor now has a vacancy rate about 10 points higher than downtown Worcester’s rate.
• The outlook on downtown Worcester is mixed. Vacancy rates have risen over the past five years. The ongoing recession and underinvestment in old buildings will continue to hinder efforts at revitalization. However, there are a number of major projects underway in downtown, indicating strong market confidence among some institutions and businesses.
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