Looking Back at Yesterday’s Property Tax

It’s 1896.  The Presidential campaign involving William Jennings Bryan and William McKinley is heavily colored by the Panic of 1893 – the worst economic depression yet experienced in the U.S. Susan B. Anthony and Elizabeth Cady Stanton are championing the right of American women to vote, a campaign separated from success by twenty more years of hard organizing.  In St. Paul, “empire builder” James Hill is at the peak of his influence as a railroad monopolist.  Near the Cathedral in September, future literary master F. Scott Fitzgerald is born.

And finally (lest I neglect the dictum that only two things resist change), the St. Paul City Council in 1896 passed a measure establishing what became known as the “St. Paul method” of assessing property taxes. 

The method streamlined the process of assessing property in the city for tax purposes, by establishing values per foot of frontage on various types of streets.  In other words, with certain exceptions, the core assumption was the wider a lot on a given street, the higher the assessed value of its property.  In the modern discussion around property tax, this comes close to what is now characterized as a land tax.  In theory, builders and property owners of the time would have been encouraged by this tax system to plat narrower lots and build higher, longer structures, rather than lower, wider structures.  Over the last year, my efforts to engage a full GIS analysis of this dynamic have been stymied for lack of records indicating when the St. Paul method was forced out of use by the state, which at some point likely mandated a more uniform statewide assessment system.  View an 1896 article describing the system by clicking here.

Still, I have run some initial analysis.  Below is a graph (click on it for a larger version) showing citywide property data, and plotting the year each parcel was built versus its floor-area ratio (“FAR”).  FAR represents the total square footage of a building divided by the total land area, and serves as a measure of the density of building on the property.  The blue dots represent buildings constructed in a given year, and the red line represents the annual average FAR for the year.  Unfortunately, it’s difficult to draw conclusions around the impact of the St. Paul method without an end date, but the trend of density in the city is certainly of interest. 

Stp_far_wavg

1896 is, in fact, a high point, and the years that follow suggest a significant drop in the density of buildings constructed, which lasted until the end of World War I.  However, a range of issues may explain these dynamics beyond the impact of a property tax regime:

• The cost of labor and/or materials related to buildings more than one story;

• Availability of desirable land as the city became more continuously developed;

• Changes in the streetcar and auto transportation system.

Also notably, the current year’s property data have a significant inherent bias, in that many buildings of low and high density have been demolished over time, and so the available data by no means represents a full accounting of when and how construction occurred in St. Paul. But while imperfect, this exercise does suggest how powerful contemporary analysis may be in tracing success and failure in past development and policy.

Donjek Project: Layers of Stone, Layers of Financing at Historic Fort Snelling

Bldgs17_18 How do you envision reuse of two large cavalry barracks at Minnesota’s Fort Snelling?

Donjek, Incorporated has been retained by the Minnesota Historical Society as part of a reuse team for four buildings including the Cavalry Barracks (Buildings 17 and 18), to examine the multiple jurisdictions involved at the site and the encumbrances that federal regulations and past state bond financing may place on potential future uses. 

Background

The confluence of the Mississippi and the Minnesota Rivers became the home of Fort Snelling in the 1820s, starting a period of 170 years of uses ranging from infantry induction to cavalry installation and Veterans Administration clinic.

Dozens of buildings remain at Fort Snelling, spread over a site bisected by two major highways.  The historic fort is, along with the four buildings forming the focus of the reuse study, part of a smaller portion isolated from the remainder of the campus by State Highway 55.  Since 1992, shortly after the Veterans Administration closed clinic facilities in the cavalry barracks, these two buildings – together comprising over 50,000 square feet – have been vacant.

The buildings are structurally sound.  The site is located on the Mississippi River bluff and the Mississippi National River and Recreation Area (“MNRRA”) corridor, and its location is levered by quick access to the Minneapolis-St. Paul International Airport, downtown St. Paul and Minneapolis, and the I-494 corridor.  The recent addition of a nearby light rail station presents another significant asset.  So whither vacancy and continuing underuse?

First, the Federal

As it turns out, these buildings appear quite encumbered indeed.  Starting in 1967, discussions between the predecessor agency of the National Parks Service and the General Services Administration (the federal government’s landlord) led to an important division of the 160 acres at Fort Snelling. The GSA designated 21 acres (containing the old fort and the cavalry barracks) for historic monument purposes, but declined to do the same for the much larger area across the highway.  Instead, the larger parcel was later designated for parks and recreation purposes, a decision reflected today by the popular athletic fields.  In 1968, a legally binding “program of utilization” was adopted for the smaller parcel, requiring the land to “be forever used and maintained as and for an historic monument,” a provision that unless amended will continue to hamper reuse efforts of the cavalry barracks.

Second, the State

With reason, the state has in place guidelines regarding the sale of property constructed or improved with state bond proceeds.  Starting from limits spelled out in the Constitution (Article XI, Section 5), the Department of Finance has construed the law to prohibit any leases of space in buildings built or improved with state bond proceeds.  This rules out any potential abuse – and effectively precludes the reuse of historic bond-funded buildings that do not house a public agency.  And as resources for public purposes diminish (see the “price of government” trend compiled by the Department of Finance), which agencies will continue to use historic buildings?  Which agencies have the resources to invest capital in renovation and upkeep of historic structures?  If the Department of Finance’s interpretation of the law is leading to the unintended consequence of forcing agencies to vacate or abandon historic property, perhaps the issue merits visitation by the Legislature.

Fort Snelling is admittedly more convoluted in legal terms than many other historic sites.  Additional layers complicate the reuse of the cavalry barracks further.  Still, with their structural integrity and prominence on the river bluff, addressing the financial aspects of the twin buildings’ reuse will enhance the odds of a long-term solution to the unfortunate history of underutilization at the fort.

Photo:  Courtesy of Flickr.