Herald-Leader Editorial

Lexington should penalize owners of neglected property

Use higher taxes, stormwater fees

December 26, 2012 

For over half a century, Lexington's policy has been to concentrate growth in an urban core to both preserve our valuable farmland and control the cost of providing municipal services by concentrating the geographical area for sewer, stormwater and other services.

This concept of an Urban Services Boundary has served Lexington-Fayette County reasonably well. But in the decades to come it needs to serve even better.

Cheap gas fueled the era of suburban sprawl, but those days are numbered. Successful communities will have to pursue strategies to make the best use of property in those concentrated areas.

One way to accomplish that is by increasing the cost to owners who hold on to properties that provide little or no economic benefit to the community but continue to burden city services.

The Urban County Council has considered this idea in the past but not taken action. The time has come to put it back on the table.

This comes to mind following the recent announcement that a new owner will demolish Turfland Mall, which closed in 2008 after several very weak years, to make way for redeveloping the 26-acre property.

A foreclosure lawsuit showed that the previous owner paid $107,543 in 2011 property taxes.

Across town, an even more morbid mall is seeing new life as Southland Christian Church continues working on the 32-acre site that once was home to Lexington Mall. That property had been essentially vacant since 2005 when Dillard's left.

The former owners paid $114,965 in property tax in 2009.

These rebirths are good news. Large vacant properties, indeed any neglected properties, are a drag on their neighborhoods and a waste of a valuable resource within the Urban Services Boundary. They don't create jobs, offer services or generate much in tax revenue for the community.

Even worse, in the case of malls, the acres of pavement and other hard surfaces like roofs, are a plague on our stormwater system. Water hitting them runs off quickly, burdening the system and increasing the likelihood of flooding and other problems.

A few years ago, as Lexington first began to wrestle seriously with both its wastewater issues and ways to grow without destroying farmland, an idea was floated to increase property taxes on unproductive parcels, like these two malls.

The concept is simple: Create a disincentive for owners to sit on vacant properties. The same would apply to residential properties, those abandoned houses with little maintenance and overgrown yards that are a blight in neighborhoods.

That proposal — to triple the property tax — never became law. But it's time to reconsider this idea, or some version of it, such as increasing the Water Quality Management Fees for non-performing properties.

Consider the contrast between the paltry benefit from the abandoned malls and the Dillard's in Fayette Mall, which alone has a 2012 property tax bill of $134,661 according to the Web site of Property Valuation Administrator David O'Neill; or Macy's with a bill of $204,274.

Much more important than the taxes is creating economic activity where the community has already invested in providing essential services. The tax numbers are minor compared to the payrolls or other benefits that flow from Dillard's and Macy's compared to acres of vacant buildings and empty parking lots.

For a neighborhood, transforming a bedraggled abandoned house into a well-kept home is equally valuable.

Lexington-Fayette County faces many challenges, but chief among them is assuring we make the best use of both our urban and rural land. This proposal would help accomplish both.

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