Simple question

[Knight23]

Maybe you guys can explain this to me. It seems like there is a lot of development in Dallas especially with Uptown, and surrounding areas. Dallas is growing in population as well. So how is it that the Dallas tax base continues to shrink? Would this imply that other parts of the city are decaying as fast as other parts are developing? And if so what would these parts be? I know there has been a lot of development in south Dallas but south Dallas is a vast area. So I guess I am trying to ask where are the decaying spots of Dallas? Parts of west Dallas by love field? or northwest highway?

[gc]

That is an excellent question and one I wish could answer with confidence. My first guess is just that people are not spending as much per person as they used, although I know it is much more complex than that.

[psukhu]

Sales tax shrunk, not property tax.

Sales tax is based on how much people spend. The last three years have been the decline and 'bottoming out' of the current economic cycle.

People were spending less year to year for the last several years. All part of the natural economic cycle.


http://economics.about.com/cs/businesscycles/

[bloodandpopcorn]

Yeah, I'm also pretty sure that it has been referring to Tax Revenues... But we have bottomed out now, right? Or is there still a bit more decline through which we must suffer?

Either way, getting more people into the city will greatly help sales tax revenues. If we get lots of people used to urban living, they will stay in that area to shop and eat, and we won't be loosing any of their $$$ to malls in suburbs. In addition to creating a better urban atmosphere to draw in some of those suburbans to help our tax revenues as well.

[dallashorn]

I think a lot of the lost value has come from income properties that have high vacancy rates. I don't remember if these are the exact numbers, but I think Millenium Place in Las Colinas was on the tax rolls for something like $210 million three years ago and now the value has been dropped to $135 million after being protested. If you cap those rents out there right now you can really lose a lot of value.

[psukhu]

You're right, properties like that lost half their value in the past few years. The suburban business districts really took a hit. Los Colinas has the highest vacancy rates in DFW.

Just a guess, but I think the boom/bust of recent years didn't hurt city of Dallas that badly as far as property tax.

Here's Fountain Place: http://www.dallascad.org/AcctDetailCom.aspx?ID=0005150A0001A0000

A slight decline from last year to this year, but an improvement since 1999.

[gc]

Good call fellas. There was an article in the DMN a few weeks back about the declining property values in DTD. I had forgotten about that.