Davis Square Restaurants See Monster Tax Increase, Say Aldermen

Some business owners in Somerville have seen their tax bills double, according to members of the Somerville Board of Aldermen.

Credit: Patch.com
Credit: Patch.com
Several businesses and commercial property owners in Somerville—and in particular restaurants in Davis Square—were recently surprised when they opened their tax bills, according to several members of the Somerville Board of Aldermen.

Businesses encountered significant tax increases, and in some cases they saw their tax bills double, the aldermen said.

Speaking at a Board of Aldermen meeting Thursday night, Ward 6 Alderman Rebekah Gewirtz, who represents Davis Square, talked of one tax bill that jumped from $18,000 to $36,000. Such an unexpected expense "can be devastating" to a local business, she said.

Ward 4 Alderman Tony Lafuente, who owns Flagraphics, on Alston Street in East Somerville, said the tax bill on his commercial building jumped from $18,000 to $25,000.

Some business owners he spoke to saw tax increases of 50 to 100 percent, he said.

Alderman At-Large John Connolly said he spoke to a handful of property owners in West Somerville, some of whom had property taxes increase by 100 percent. "Talk about shock and awe," he said, referring to "the surprise that came in the mail earlier this week."

Gewirtz said she's received "horrified emails from three separate people in different parts of [Davis] Square."

Impacting Commercial Growth, Some Argue

Alderman At-Large William White, president of the Somerville Board of Aldermen, said a number of property owners, "especially, it seems, restaurants," were impacted by taxes that, in many cases, doubled.

White said many restaurants don't own the buildings they're in, but have clauses in their leases that pass on property taxes to them.

Restaurants are "an engine of growth" in Somerville, and the tax increases will "impact further commercial development in Somerville," White suggested.

An Increase in Property Values

The cause of the increased tax bills was a jump in assessed property values, alderman said. Although the commercial tax rate decreased from fiscal-year 2013 to fiscal-year 2014, assessed values jumped in some cases, they said.

"If the value is high enough, it doesn't matter what the rate is," Connolly said. He said in "the breaks are on" in terms of growth in the local business community and "there's the perception that things aren't fair."

"It's just crazy, and where does it stop?" asked Lafuente.

Concern About Residential Taxes

Some aldermen said the jump in commercial tax bills foreshadows a jump in residential tax bills that could hit next year, when the city will conduct a revaluation of residential properties.

"I can't imagine what the tax bills will be next year with all these new assessments," said Lafuente.

Connolly noted the Davis Square area has seen a number of homes sell for over $1 million and said, "We're all going to get caught up in this," because those sales increase property values.

"We are victims of success," said Ward 2 Alderman Maryann Heuston. High property values mean "if I were to sell my home tomorrow, sure, I'd make a lot of money. But where would I go?"

The Board of Alderman's Finance Committee is planning to schedule a public hearing about the matter.
Matt C January 10, 2014 at 11:36 AM
I imagine this growing into a bigger and bigger issue in the city for two reasons; first there is a real and significant growth in home value in Somerville. Second how property tax rates should be impacted by growth of city government vs. growth of tax assessment value. The Assessing section of the Somerville web site states: "In Massachusetts, the property tax is an ad valorem (based on value) tax. In the late 1970s, the Massachusetts Supreme Court in the Sudbury Decision ruled that property values would be based upon 100% full fair cash market value. Full and fair cash value is the amount a willing buyer would pay a willing seller under no special circumstances and given a reasonable exposure to the market. Assessors must use accepted Massachusetts’ appraisal techniques to value property." I looked at a single family house that was sold in my neighborhood last summer (that could be my house). It has been bought and sold 3x since 2009 and I rounded the numbers... -- 2008 - previous tax assessment value: 304k -- 2009 - sale: 250k - tax assessment value: 291k -- 2010 - sale: 300k - tax assessment value: 263k -- 2013 - sale: 545k - tax assessment value: 286k -- 2014- current tax assessment value: 367k The assessment does not follow sales price, talking to the assessor when he visited my house after some construction work that the assessment is a lags a year or two behind the current value (im sure it is not an exact science). Following with the article, how the system works and having a similar house with a similar tax history... I should expect a 100-150k increase in assessment over the next two years (at our 2014 rate of $12.66/1000) this is a $1200-$1900 increase - in real terms (after the residential exemption) this is 45%-57% increase in taxes. So I know that this is a trend happening all over Somerville not just in winter hill. In some places it is more dramatic (E. Somerville) some places less (W. Somerville) So one big question: Does the city government need such a massive increase in revenue. If it does not do we focus on resident owners? (the residential exemption increased 10% from 2010 vs 40% increase in assessed value in the example). Do we focus on commercial property to increase development in the commercial sector of the city bringing more jobs into the community? or do we cut taxes across the board?
John O'Brien January 10, 2014 at 01:06 PM
In December, the Mayor and other elected officials boasted the tax rate in the city was reduced. Now the tax bills are out and so many people have seen a gigantic increase in their property taxes, as high as 20%, 30%, 40% and more. The taxes on my house went up over 40%. These kind of increases are devastating to residential property owners and renters who have these costs passed on to them. These kinds of increases are unsustainable The Mayor and other elected officials need to begin addressing this publicaly. It cannot continue. Something must be done.
Frank Mulligan January 12, 2014 at 04:03 PM
Everyone should go to City MEETING and protest about increase on TAXES, And withhold bill> UNTIL takes CARE. Good Luck.
Courtney O'Keefe January 28, 2014 at 01:04 PM
I know of, at least, one Magoun Square business that also saw a significant increase in taxes, as well.


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