PRIME DOWNTOWN PARKING LOT TAX-EXEMPT SINCE 2001

Lot at 500 N. Broadway Classified as Exempt "Telecommunications Property" 

Tax Revenue Loss over Decade Exceeds $200,000

Reason for Exemption Unclear

 Above: The Tax-Exempt 154-space, freshly paved, privately owned surface parking lot at 500 N. Broadway as seen on Monday, November 9th, 2009.

[Photo by Michael Horne]

Special to the Readers of Milwaukeeworld 


By Michael Horne

And The Milwaukee World Hound Dog Team 

[The one-acre, privately owned 154-spot parking lot at 500 N. Broadway occupies the west half of the block bounded by E. Michigan and E. Clybourn streets. Yet this desirable property in the heart of downtown has not been assessed a single dime for city taxes since 2000, when it was valued at $900,600.--Ed.]

According to the City of Milwaukee's Assessor's office, the exempt status of 500 N. Broadway comes from its use as "Telco property." It apparently was granted that status in 2001, for reasons that could not be immediately determined. State law exempted certain Telecommunications assets from taxation commencing in 1998. Property subject to tax would be valued by state assessors with funds remitted to the state.
The ten years' exemption has cost taxpayers at least $216,000 in revenue, with funds accruing to the state.
The property is to return to the City tax rolls in 2010, just like a normal parking lot, and not as a Telco property subject to taxes based on its $2,160,000 assessed valuation.
The reason for the return to the tax rolls and the City Assessor's control also could not be immediately determined by an assessment official when questioned by the Milwaukee World Hound Dog Team.

If the commercial parking lot at 500 N. Broadway has ever deserved exemption as "Telco property," then Abraham Lincoln was born on Brady Street, George Washington slept at the Pfister, and Golda Meir was the first female pope. This writer has never seen it devoted for any purpose other than the parking of private motor vehicles. The current parking rate appears to be $8 per day for its 154 spaces. The unattended lot could easily generate revenue of over $500,000 per year, with only negligible expenses.

The property owner is listed as Patsy and Paul, Inc. of 1900 San Fernando Dr. Elm Grove. State records show Patsy & Paul, incorporated in 1960, is registered to Marion [sic] Matola of that address. [The name most likely should be Marian Matola, who used that address along with her husband Gerald J. Matola.]  Department of Neighborhood Services records show one open permit at the site for the $61,000 repaving project completed this weekend. Tax Records show only a 2008  $108 fire inspection fee for the property, which was promptly paid.

TAXPAYER-SUBSIDIZED SURFACE PARKING LOTS DISCOURAGE DEVELOPMENT
Surface parking lots in a city are very poor uses of valuable, developable land, and tend to draw down adjacent property values while making for a dead central city, and one that is over-reliant on automobiles. The last thing any unit of government should do is to encourage surface parking by exempting properties from the real estate tax authority of the city and transferring it to the state. This exemption provides a further disincentive for an owner to develop the property. Also the cheap parking tends to discourage demand for a street rail system and mass transit.  

PATSY & PAUL PAY TAX ON OTHER SURFACE LOTS 

The much smaller (9,592 s.f.) parking lot at 119-125 N. Milwaukee St., also owned by Patsy & Paul was assessed at a total of $470,000 for the 2008 tax year; its taxes of $12,073.11 have been paid in full. The 34,490 s.f. parking lot owned by Patsy & Paul at 333 N. Water St., on the Milwaukee River, is assessed at $1,234,700, and taxes of $48,389.52 have been paid in full.
At the 2008 combined tax rate of $24.03 per $1,000 assessed valuation, the 500 N. Broadway parking lot should have provided $51,904 in revenue directly to the taxpayers in 2009.  There may be a perception that state assessors might offer lower figures than the city's. 
(Telecommunications property, like manufacturing property, is assessed by state employees. A tax is paid to the state, which then remits a payment back to taxing entities via a shared revenue formula.)

City of Milwaukee photograph looking northeast from the intersection of N. Broadway and E. Clybourn St., 1998

The adjacent parking structure at 535 N. Milwaukee St., [seen as the red building in the top photo and the white, horizontal-banded building in the bottom photo] just east of the alley from the Patsy & Paul lot, is owned by the City of Milwaukee, and is exempt from the City Assessor's powers. However, the city collected $502,875 in revenues from the structure in 2008.
So the socialist parking garage brings money to the public, while the private-enterprise parking lot cheats taxpayers. How did this happen? And are there other examples? The Hound Dog Team has made public record requests of a number of government officials to get the answers to these questions.
[UPDATE Tuesday, November 11th, 2009 -- The State of Wisconsin Department of Revenue says it should have a response to this article by Wednesday.--Ed.] 
UPDATE Thursday, November 12th, 2009 -- See new post. --Ed.]