Some of the worst rip-offs are of the old, broken, rusted, reeking hotel relic. The hotel got bought by a no-good investor with sketchy credit, and spent the years since then trying to get the ball rolling, with one or two minor successes, only to hit roadblock after roadblock. When the wrecking ball comes, not only does the hotel exit, so do any profits on the deal.
That’s the problem, the rancid old shithole tax shelter, that shutters for good just before it’s touted as a classic, gutsy investor (like you), or a savvy taxpayer group (like me), helps preserve and remake this lowly hotel for an eager public.
In all honesty, I’ve never found the Bush Tax Cuts so much of a problem as they are in this deal. We wouldn’t be planning to save hotels here on my watch, if it weren’t for the massive cuts that President Bush cut in 2001 and 2003. While the tax cuts were initially a golden opportunity to bring the corporate welfare they were supposedly supposedly intended for to a better way, all most tax-cutters really got was a warped, sclerotic middle class.
So, while I think we should stop whinging, it’s possible to look at our tax cutting and think first about the right questions. What are the kinds of tax cuts we ought to make? What kinds of tax cuts would we make if we reversed course?
The most vulnerable tax cuts are the ones that have already been explicitly targeted to sweeten the deal for larger-than-necessary corporations. These kinds of tax cuts are great when nothing has been done to the system to make it more attractive to entrepreneurs, innovators, and risk-takers.
Because then they would lose their incentive to stay, or shut up about their businesses, instead of limping along and just surviving until their deal expires.
No one is going to save the hotel lobby, so it would seem a better idea to help it fill a minimum of 100 times its current size.
A couple years ago, another New York City real estate development project was considered to save a brownstone in East Harlem. Rather than saving some room for this pair of paintings, many volunteers and organizations wanted to restore the brownstone rather than sacrifice it. And in the end, the commissioners who eventually reviewed it had to reject the proposal by a 5-to-2 vote after some 36 hours of discussion. The commissioners pointed to all the loss to the community and homes for the elderly and disabled that would have been lost, under the plan.
Maybe it’s part of the growing movement to show these commissioners where they stand, but why were this brownstone ruined in the first place? Are we setting an example for the changing values of our city? Now, if we save a hotel, can we install some artists and live in the hotel?
The tax shelter revenue loss, and not the loss to a developer, is what’s most cost-effective in making most aid to the marketable, or to close out old investments. It costs little to preserve a crumbling building and then demolish it and build something new. But, I think it would be nice to keep our old hotels as the heart of downtowns and cultural districts, maybe rehab the old ones that need preservation work.
In the long run, what is even better is to protect the character of the urban landscape of historic neighborhoods. For that reason, one of the few American features more diverse than hotels is of course the sidewalk café. More pedestrian friendly streets are my favorite portion of New York, and so is the sidewalk café.
So, they pay taxes. But I hope the current Congress and future administrations go to greater lengths to protect them from being turned into high rise buildings.
Charles Green is the president of the $2.8 billion real estate firm and property management company Owners & Associates, based in New York City. He has been hosting Super Hedgehogs on FOX Business since 2013.