Philadelphia needs a comprehensive review of tax policies, but your story on tax abatements ("Is tax windfall worth the wait," Dec. 14) didn't advance that cause.
Seventy-six percent of abated properties are in neighborhoods, not downtown. The greatest value is downtown, but includes Comcast and a few condo towers. Only a handful of ballplayers have Pat Burrell's talent; likewise, few residential abatements are in his league.
It is wrong to assume Philadelphia benefits only when abatements expire, ignoring their impact on transfer taxes. In the early 1990s, this tax hovered around $42 million annually. In 1998, after abatements began, transfer taxes doubled to $82.5 million, soaring to $217 million in 2007. A steep drop in transfer taxes is a major cause of the fiscal crisis.
The story highlights the first abatement at 24th and Locust, but doesn't go far enough in telling how an empty factory paying $47,000 in taxes in 1997 underwent a $24 million rehab that created 175 jobs and generated construction wage and sales taxes of $685,000. In 1999, 200 tenants, 67 percent from outside the city, start paying wage and sales taxes of $683,000 - twice the abated real estate taxes. Acknowledging abatements jump-started the residential revival, the story asks if they're still needed, but overlooks it's 30 percent more expensive to build in the city than the suburbs.
Paul R. Levy
President, Center City District