“One of the reasons why I wanted this brought forward is because over the years, I've heard that some people have chosen to use our city as a tax haven, where it is cheaper for them to leave the building unoccupied as a tax write-off than it is for them to actually profit from having the building occupied,” councilman Steven Ward said during a November 4 council study session on the topic.
Ward mentioned a closed Hobby Lobby in Englewood Marketplace near West Hampden Avenue and South Broadway as an example, saying that many units in the strip mall are now vacant, leading to a lack of economic activation in the city center.
Big Lots, Conn's HomePlus, Schmitt's Music and Walgreens have also recently closed locations in Englewood.
According to Englewood Community Development Director Brad Power, there are plenty of new tenants activating properties in the city’s downtown core surrounding South Broadway, but there are some problem areas regarding vacant commercial properties in the city where buildings are old and the market moves slowly.
According to Englewood Chief Building Official Karen Montanez, the city currently knows of fifteen vacant residential properties and 46 vacant commercial properties but doesn’t have the capacity to proactively identify buildings that aren’t brought to their attention; usually, city staffers find out because neighbors are having problems with the property.
Last year, the council asked staff to come up with a proposal to address vacant properties. The idea put forth on November 4: a registry that would encourage proactivity and a new full-time employee to follow up on complaints and identify vacant properties. Any property that isn’t legally occupied for more than thirty consecutive days in a six-month time period would qualify. Some of the identified properties would have to file crime prevention plans to make sure their properties are secure.
Fees for vacant, unimproved parcels would be $50 per year at the low end but would increase each year the property is vacant. Properties that fail to register would face fines, as well. Montanez said the program would bring in over $15,000 in its first year based on lowest-square-footage predictions by city staff.
“The fees associated are broken down by square footage,” Montanez explained. “The larger the area, the higher the registration fee.”
Other cities in Colorado like Aurora, Denver, Lakewood, Jefferson County, Manitou Springs and Pueblo have adopted or are considering similar policies, the staff proposal added.
“Ours is probably most similar to Lakewood,” Montanez said. “They just passed theirs recently. However, they do twice-yearly registration of $700, but they also charge $800 for emergency calls. Once you've registered and you keep getting emergency calls, the penalty is $800.”
Englewood Fire Marshal Mike Smith helped with the presentation, saying his department found studies showing 6 percent of structure fires across the country over a five-year period were at vacant properties. Englewood Police Department statistics showed that officers have visitied several vacant residential properties a total of 45 times in the last four years, and there are several commercial properties around the city center responsible for over 300 calls in that time period.
The city has a nuisance abatement team, but the officials who spoke at the meeting said the proposed vacant building registry would help them gather more information about properties that aren’t problematic, as well. Additionally, having an in-state contact for each building would be helpful.
“It would give us an additional level of enforcement,” Montanez added. “As far as nuisance properties on the residential side, there's not much of a financial penalty. There's virtually none unless we send it to the courts, and then that's determined by the courts, but there's nothing within our codes that actually say there is a penalty.”
Montanez admitted that some owners may not be able to afford financial penalties, and that there could be a perception that the city is looking to unlawfully seize vacant properties.
Councilors were concerned about how part-time residents of Englewood would factor in. Most of them were unsure whether a registry would really solve the vacancy problem.
“Whenever we have a vacancy in a community, it's bad for the community,” councilmember Chelsea Nunnenkamp said. “Do you think this will actually produce the intended results, or is it just another thing that people will have to do and it will continue? Do we have any data about how these registration programs have worked in other municipalities? Do they actually discourage long-term vacancy?”
Montanez said the goal is to make it easier to lease or occupy a building than to register, pay and maintain the property up to city standards for vacant buildings — but councilors pointed out that the same owners who neglect vacant properties would probably ignore registration requirements, too.
The council made plans to file follow-up requests about how many vacant nuisance properties there are, how much the city currently spends on managing them, and how many staff visits there have been to those properties.
“It's a danger we run into when we're trying to penalize one person or group; it makes things difficult for others,” councilmember Rita Russell said. “There are things that we could brainstorm on how we could encourage people to do things, but this is a private property situation. Even the conversation about penalizing people to punish them into submission, that really is an abuse of power, so I think that we need to be very careful about doing that.”
Mayor Pro Tem Joe Anderson said examining the city’s property tax code to incentivize people to develop and improve their properties might decrease vacancy better than a registry. Power said he would be interested in ideas like helping vacant commercial property owners make minor improvements that could help their properties be more attractive to renters, as well.
The council is planning another study session to brainstorm more ideas, with a focus on nuisance property laws.
“My goal in pursuing something like this was to create a negative incentive to leave commercial properties vacant, while simultaneously creating an incentive to develop them,” Ward said. “In my opinion, as long as it is cheaper or more cost-effective for a property owner of a commercial property, for whatever reason, to leave it vacant, that's what they're going to do.”
