To be fair, my article pointed out how the building was purchased for $155,000.00 and that is true. However, what wasn't mentioned was the millions of dollars that went into remodeling the building. Yet we did link to an article explaining much more. Their investment number into that building to renovate is somewhere around $2,000,000.00.
You could argue that the replacement value, (if you were to construct new at that location) is easily worth $4.4 million. However, that is not the case here and quite frankly shouldn't even be considered in this equation.
Heck, there's 60,000 sq. ft. of space in that building and there's probably $150,000.00 worth of carpeting alone. There's a lot to factor in. However, in the end, (as my article suggested yesterday) this is not about Gillis/Gilkerson making off like bandits. The argument I had and still have is this is yet another property taken off the tax roll from Salisbury University and PRMC. If you look back over the past 20 years, (which no one is willing to do in the MSM) and calculate the MILLIONS of dollars that have been removed from the tax roll, YOU the taxpayer ultimately have to come up with that funding to replace the lost tax revenue both in the City and the County.
All that being said, Gillis/Gilkerson broke no rules or laws. They had NOTHING to do with the appraisal and in fact were surprised at the numbers. They have traveled the United States visiting different DOWNTOWN'S and notice a college presence in striving communities elsewhere and felt this gift would be a positive start in similar successes. This is their building, their vision and their gift/decision. You/We cannot blame them for anything here.
As for their children, love them or hate them, THEY ARE THE FUTURE OF SALISBURY, like it or not. You may not agree with them on issues but as I have stated in the past, they are sticking their necks out and investing into Downtown. It's so easy for many of you to go on the attack saying stuff like they got it all from their parents. Well, I happen to know these guys and it was THEIR vision they brought to their parents in search of WISDOM, can you blame them? THEY are investing their earned savings into projects they believe in, not their parents money. THEY have worked extremely hard to promote Downtown and my hat is tipped to them. Could they have moved out of Salisbury to other striving communities and had a much better chance at much bigger returns on their investments, absolutely. Instead, they stuck it out here in Salisbury and are making their own mark through an incredibly strong group of friends and supporters.
Gone are the days of us old folks trying to revitalize Downtown. The lack of support from former leaders threw a wrench into it and those who invested in the past sold out and moved on, me included.
So while it's easy to criticize, ANONYMOUSLY, unless YOU have the time, the money and the will, don't hate others who have a proven track record. I know I'd love to have Gillis/Gilkerson not only as consultants but as partners in my investment ventures as well, young or old. Their GIFT is just a small part of what they have done to revitalize and move the Downtown forward.
Well said!
ReplyDeleteThe bottom line is that G/G get the huge tax break and the citizens lose the property tax it should be paying. This article is the old lipstick on the pig scenario.
ReplyDeleteAll my dealings with Gillis Gilkerson have been positive and pleasure to do business with ,but you will always have the Haters.
ReplyDeleteGreat post.
ReplyDeleteYou won't get many comments on this. Miserable people only like to post negative comments about people that are successful.
ReplyDelete12:48, WRONG! The tax breaks are SU, They are the ones taking it off the tax rolls. Gillis/Gilkerson are reinvesting once again into Feldman's old building and let me assure you, that too is in the millions.
ReplyDeleteAlso, when you talk about write offs, you only get a small percentage to write off for I believe four years and that's it. You can't write off all of it, only a small portion of it. Also, when you do in fact decide to write it off, it has the be four consecutive years in a row. You can't pick and choose and I don't care if you agree with me or not, taking that four year write off in a recession SUCKS! Go back 12 years and this write off for them would be worth a LOT more.
The tax breaks are absolutely NOT SU. Salisbury is a 501c3. They don't pay taxes. G&G gets the tax break for the donation. Come on folks. This is basic stuff
DeleteYou're trying to convince the know it all that he's wrong? Good luck!
DeleteI now wonder where Delmarva Veteran Builders office will be, being its the same address as Gillis Gilkerson?
ReplyDeleteWish I had known. I would have spent the10 grand more to have the gallery building instead of my three bedroom rancher.
ReplyDeleteMy issue is not with the investment in downtown. Its with the deals that only gillis has gotten- The old fire house- $100k, the old feldmans building 40k, brick room bar - only had to pay the property taxes , states attorney building- 20 year lease. A huge win. My issue is why does it seem like gillis gets all the cherry deals and everyone else is left out in the cold. Good for them for putting up the money but some of the deals seem fishy to me to say the least.
ReplyDeleteHow come they get to buy up the entire city? They got some " 'splaining" to do
ReplyDelete1:45: Agree with you whole heartedly!
ReplyDeleteThink about this perspective. You own x amount of square feet in a limited area. You donate older stale stuff to be taken off the market. Then you finish the feildmens project and that is all brand new class a space. You also own other buildings downtown that are either off the market( states attorney) or available. You then charge a premium for the space as you own most of the available downtown square footage. You then use the local government to put up money , time and effort and promote and be a constant cheer leader for downtown. That my friends was a brilliant move by gillis to maximize the dollars in the available square feet downtown and have the government be his cheerleader while other business just burn.
ReplyDeleteClassic case of rich get richer, while the rest of us go broke. Thanks Palmer.
ReplyDeleteProperty is worth what is known as its “fair market value” – what a reasonable and arms length sale would bring – not what an owner may have paid to buy and rehab and maintain it or what the replacement cost would be. In this case it would be based on the potential rental proceeds (income stream) and a discount rate an investor would want for a rate of return on capital (ROI).
ReplyDeleteThe current property tax value is based on such analysis. The three buildings – a large one (Plaza Gallery) and two smaller ones (annex) have a total assessed value of about 2.25 million dollars, which may be high, all things (location, age, vacancy, etc.) considered. Simply put, because the rental demand is not great downtown, and there is a high vacancy rate, both at this site and elsewhere, the value is not great either. No legitimate appraiser would value those buildings at $4.4 Million.
It just don't pass the smell test.
To see what the presence of colleges in a downtown do for a city, just look at Baltimore, where there are several – the mere presence of a college is not a panacea, and is unlikely to be in this case.
ReplyDeleteI saw another Downtown building for sale/lease on the blog earlier, but it has since been pulled. Maybe Gillis/Gilkerson can purchase it for half a ham sandwich and donate it for a million bizzilion dollar write off.
ReplyDelete10:00 pm. You are not comparing apples to apples. Baltimore is a big urban city. Look to smaller college towns like Athens GA where UofGA contributes to a thriving and vibrant downtown. Dozens more examples across the U.S.
ReplyDeleteJust saw the post about that lawyers empty office space at One Plaza East. Maybe he should give it to SU, or if they don't qualify, to me!
ReplyDelete7:27 -
ReplyDeleteYes, where the school's campus is integral to the area it csn be a positive force -- see State College, PA and similar places. Here, it would be just a minor part of the school, and the separation from the main campus would prevent any significant effect.
SU is getting as a gift a site that it would be stupid to purchase even for the "fair market value" discussed above. It probably will not be used academically, or only occasionally for that purpose.
The initial renovation $ investment for the Gallery building was 2.9 million, not 2 million. The additional investment for the Annex renovation was $900,000. This does not include aquisition, design fees, municipal fees, lending costs etc., etc.
ReplyDeleteIn regards to coming off of he tax role , why is Downtown being picked on? Are their Downtown haters perhaps? Naysayers? Or is it personal? When properties are taken off of the tax roles, as example: the Tennis barn, power street, the old Glasgow and Davis building or any other buildings there is not outrage. This happens all of the time when great community institutions like UMES , SU or PRMC expand and grow, or even when the City or County buy property. They do not pay real estate taxes either. Some would see this as healthy for our community with jobs, consumers spending money, for profit businesses, making money, AND paying taxes. Why are there so many downtown haters? Is sprawl, consuming farm land the answer. Is that the economic or environmental right thing to do? Grow what you have. Recycle buildings. Re-purpose buildings. Get your heads out of the sand!
8:14 -
ReplyDeleteWhat makes you think these are comments by downtown haters -- most are concerned by the tax scam. And it makes no difference how much money they have put into the buildings in the past. They are only worth what they could get from a reasonable investor today.
PS -- if they put in as many $$$ as you say, it sure does not show.
I know that (and why) you are high on the G-G gang, but there is no way this deal is kosher from the tax break standpoint at $4.4 Million.
ReplyDeleteJust leave it with gone are the days and allow downtown to morph into whatever it chooses.We're looking at a natural process here, but people don't recognize a natural rythym that chooses it's own path.Very minimal human intervention will be necessary.
ReplyDeleteState ownership of the economy IS the goal of Democrats because they are not Democrats, they are Socialists.
ReplyDeleteDoes anyone here ever visit other downtown areas? A college presence is almost always there. A college presence brings daily/hourly/constant traffic. These customers spend money. The employees and students need things. They need meals, happy hour, supplies. These are consistent customers. I am fairly aware that many people here want a downtown like decades past with department stores, but that doesn't exist. Small retailers, private owners, restaurant-bars are what make up downtowns now. Of course GG is investing in themselves making a move like this. But they are also investing in the other downtown businesses. And the future of downtown business by providing a consistent customer who typically has dispensable income. Think about the implications of having a consistent customer presence who is not going to court. How is that a negative?
ReplyDeleteDepending on the tax bracket the "tax break" is usually .25 to as much as .40 cents on the dollar of valuation. They could have sold it or given it to their kids. The valuation was done by a State hired appraiser
ReplyDelete