By Frank DeLoache

The state and its top consultant say people who own commercial property near future stations for the Red Line commuter-freight rail line will reap the benefits when the line opens. And they say those property owners should be willing to pay extra in advance to provide the early capital needed to build the line.

But local property owners, a prominent Cornelius commercial real estate broker and local town leaders are skeptical about the predictions consultant Mark Briggs’ and his team have presented at numerous meetings recently. And if their caution provides any gauge of sentiment among other commercial property owners in Cornelius, Davidson and Huntersville, then Briggs and the state have their work cut out for them.

McMAHON

“The benefits are going to be extremely slow to come, and not all areas will develop or develop at the same rate” along the line, said Tom McMahon, managing director of Sperry Van Ness/McMahon & Associates, a commercial real estate brokerage in Cornelius.

While the Red Line consultants predict large, intense development at both ends of the Red Line — in Charlotte and Mount Mourne — McMahon said development around stops in between could “be very slow to come.

“But all commercial property owners are being taxed while they are waiting for the benefit,” McMahon continued. “Then, when they sell, they’re going to pay more taxes on the higher value. It’s almost like double taxation, and it’s going to be tough for small property owners to get behind.”

Some commercial owners own and operate service business — architects, for example — so they may see little benefit from the Red Line.

CUYLER

Take, for instance, Lenore Cuyler owner of the Style Merchant, a small hair salon on Catawba Avenue a couple of blocks from the future Red Line station at Antiquity. “I have an established clientele,” she said. “It is my belief — and I know my business — that I’m not going to add business because of the train.”
She suggested that a nearby bakery or coffee shop might gain some additional breakfast business from people arriving to get the train, but even then, Cuyler was skeptical that the extra business will compensate business owners for years of higher taxes.

But Cuyler may be a lucky business owner who doesn’t have to pay the special assessment — 75 cents for every $100 of assessed value — because she has a live-work townhome that has residential zoning, according to the Mecklenburg County Tax Assessor’s online property records. Still, “it upsets me that others will have to pay it,” she said.

She said the assessment district should be much larger and include all property owners, to spread out the burden.

GUIGNARD

At a recent meeting of the Lake Norman Regional Transportation Commission, Huntersville Commissioner Charles Guignard raised the concern about the special assessment unfairly hitting smaller commercial property owners, in older business districts. Guignard owns property in the old business district of Huntersville and said he and other commercial property owners already took a broadside this year when revaluation raised assessed values by 40 percent. Adding the extra Red Line tax will add up to a total 70 percent tax increase in just two years.

“Rent rates haven’t gone up,” Guignard said. “In fact, they’ve gone substantially down, despite what the appraiser’s office says. I know that the (Red Line) big picture works, but I don’t know how you’re going to convince small downtown property owners to support it. A number of people we’ve talked to will be hit by a double whammy.”

Guignard calculates that he’ll have to pay $200,000 in extra taxes for the Red Line during the four years before the line actually begins operating. He’s already considering how he might sell some of his property to afford the special assessment if it passes, he added.

The Red Line financing plan calls for commercial property owners to begin paying the special assessment in 2013, and the commuter-freight line would not begin operating before 2017.

McMAHON	JENEST

Former Mooresville Mayor Bill Thunberg and Davidson Mayor Pro Tem Brian Jenest thanked Guignard for raising those questions and said they’ve heard the same concerns from other commercial property owners. Briggs, as well as the state and local project supporters, will have to address those issues if they hope to win the support of small commercial property owners, Thunberg said.

“That’s where the rubber meets the road,” Thunberg said.

BRIGGS

Briggs, who is vice president and finance and investment director for California-based Parsons Brinckerhoff, didn’t discount Guinyard’s concerns, but at the same time, he stuck to numbers crunched by his economic team: The special assessment will add about 6 percent to commercial property owners’ operating costs, and most businesses should be able to cover that by increasing sales about 1 percent.

Briggs said his team already has performed five or six “case studies” on local property owners, though he wouldn’t identify the owners. Property owners will see dividends in the end when they can charge premiums of 18 percent more for apartments within the assessment district and 15 percent to 20 percent more for office and retail rentals.

The 75-cent special assessment translates to a $1,875 tax bill for a property assessed at $250,000 and $3,750 on a $500,000 property.

WHISNANT

GRANT

Some questions also remain about what qualifies as commercial property that would have to pay the assessment. Sisters Miriam Smith Whisnant and Lilyan Smith Hunter inherited hundreds of acres just east of downtown Cornelius. The family continues to farm the land.Ron Whisnant, Miriam’s husband, said the family has wondered whether their land would be subject to the Red Line assessment.

But they haven’t heard from local or state officials about the project. Cornelius Assistant Town Manager Andrew Grant, the town’s lead staff person on the Red Line project, referred the question to the consultants, who had not responded by the printing deadline for Cornelius Today.