Property taxes are expected to decline 6% to 7% for 2002 taxes, according to the state department of revenue. The association, based in Bloomington, MN, argues this property tax burden is prompting some retailers to prefer expansion in other areas, such as Kansas City, Milwaukee and Houston.
The association also argues the situation has left Minnesota consumers with few choices and higher prices that reflect the higher costs due to property taxes.
For community shopping center retailers, such as Barnes & Noble, Office Max or Circuit City, averaging 25,000 sf to 40,000 sf, the survey found the Twin Cities average of $3.82 per sf in property taxes is 257% more than the $1.37 per sf average in St. Louis,MO. Other comparable cities: $1.73 per sf in Des Moines, $2.19 per sf in Indianapolis, and $1.80 per sf in Nashville.
"Comparable centers, with similar assessed value in the 25 states we operate, have 20% to 50% lower taxes per square foot than Ridgedale (a regional shopping centerin the western Twin Cities)," says Jill Noack, vice president and general manager of Rouse Ridgedale Management Co.
For freestanding quick service retailers averaging 4,000 sf to 6,000 sf in space -- such as Burger King and McDonald's -- the survey found that the $7.50 per sf average property tax is about 219% more than the average $3.43 per sf comparable restaurants in Milwaukee would pay. Other comparable cities: $7.32 per sf in Des Moines and $4.84 per sf in Kansas City.
And for freestanding retailers -- such as video stores and drug stores -- averaging 5,000 sf to 15,000 sf, the survey found that the Twin Cities average property tax of $3.28 per sf is about 335% more than comparable stores in Indianapolis would pay. Other comparablecities: $2.99 per sf in Dallas/Fort Worth and $2.62 per sf in Des Moines.
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