The Distractor tax

We're still trying to get this much needed low barrier homeless shelter built. It appears to have cleared the latest hurdle in this real estate survey.

The city's only plan for the former VA hospital so far is to build a low-barrier homeless shelter on the building's first floor, which spans about 43,500 square feet. The entire building is 746,000 square feet and tops 1 million square feet when the garage is included.

The city acquired the former VA hospital in a property swap that allowed the new VA to be developed on city-owned land next to University Medical Center in Mid-City.
 
JLL took plans for the low-barrier shelter into consideration when it conducted its analysis, and asked potential developers and tenants whether the homeless shelter would be an issue.

"It was generally deemed that the presence of the facility would serve as a distractor," JLL wrote. "However, the opportunity prevails to successfully plan the various uses to create separate entrances, arrival areas and divisions in order to mitigate the impact."

Can't have too many "distractors" getting in the way of our development. They sound like some dickhead coach telling his players to "stick to football."  Cities are diverse places. There are distractors everywhere.  They aren't always great for maximizing profits so we do everything we can to eliminate them. Or at least, we move them across town.

It's interesting to see now that LaToya Cantrell has successfully NIMBYed the homeless shelter away from Ben Kleban's charter school and over to the VA site, that she wants to be credited as one of its most prominent advocates.   At least today's article provides some of the context, even if it does let her get away with the claim. Her statement is OK, although it still couches everything in terms of ROI than in anything human.

"The value of the low barrier shelter far outweighs the speculative value of redeveloping the site without the shelter there," Cantrell said. "Eventually, the city and its partners could end up recouping much more value from reduced E.R. and jail costs than it could if the shelter were not in the VA to begin with."

She added that "we need to be focused on the long term viability and best use of the property, not the short-term return for what was a non-income producing property to begin with."

Regardless, whoever takes on the site, is going to refer to this study eventually.  It's how they're going to justify whatever big tax break they inevitably end up asking for.

The analysis suggests that any developer who would be brought on to convert the property to a commercial use would need a "financial enhancement" because of the cost.

When they do, they can expect Mayor(?) Cantrell will have a sympathetic ear.  During last night's forum she talked briefly about economic development saying, "We have to roll out the red carpet" with "incentives" for developers. Adding that the current climate is "too politicized." In a nutshell, she was saying she favors more public giveaways to developers done more quickly with less public oversight and accountability.  Which is why anytime the real estate industry successfully identifies a "distractor," it means the rest of us will have to pick up the burden of that for them.