Barring all automotive uses from commercial zones creates vacancies in buildings resulting in lower rents and lower building values
HALTOM CITY, TX, October 25, 2022 /24-7PressRelease/ — It’s every building owner’s nightmare. Seemingly out of nowhere, the local city council passes an ordinance that bars him from renting space to a large portion of his potential prospective tenants.
Knowing his tenant pool has just shrunk, the landlord has to lower rents to close more businesses as tenants in a reduced prospect pool. Like everything else, real estate is supply and demand. Unfortunately, because the value of the real estate is directly tied to the amounts of the rents and the net operating income, the building’s value declines resulting in lower ad valorem taxes for the city as the landlord fights against increasing vacancies, as well as no sales taxes generated by the lost tenant.
HUBA Founder Ron Sturgeon, a real estate investor and landlord who has offices in Haltom City, states “Since the ordinance passed, Realtors have offered me properties in Haltom City with higher-than-normal vacancies.” Within weeks, these realtors have lowered their price after visiting the city and finding out that they can no longer rent to automotive businesses of any type, said Sturgeon. He cites properties in S Haltom City along Carson St that have prices lowered $300,000 in just 8 weeks, and they still haven’t sold. “These numbers are real, but the folks at the city never really hear about them or just don’t care, ” said Sturgeon. Just one of these, lowered $300,000, cost the city $3,000 in ad valorem taxes, as well as sales taxes, employment and products and services.
Part of the problem is a lack of experience Sturgeon said. “No one on our council has any business ownership experience, and no one in office has any idea how the value of real estate is derived directly from the rental rates,” noted Sturgeon. “They also don’t understand that they have created disincentives for future development,” added Sturgeon.
Even less-intense businesses like automotive accessories, detail shops, or tire and wheel centers are now barred from all commercial zones in Haltom City. Sturgeon added “This is just nuts. They created an ordinance that groups auto parts stores and automotive detail shops, which are very unintrusive, with garages and body shops, which can be more problematic. As a result, we will never have a national franchise like a National Tire and Battery, or A Jiffy Lube on our main commercial corridors.”
They can open only in the industrial and heavy industrial zones and only then with a Conditional Use Permit (CUP) that takes several rounds of public hearings over months for the operator to find out what the conditions of the permit will be. In recent hearings, the current council has not been motivated to grant such permits, or they grant them but impose requirements that the tenant may not be able to operate under.
Sturgeon notes that the new warehouse complex built at the corner of Higgins Lane in North E. 28th St. has been substantially vacant for almost 2 years. The second broker who has the listing reports that almost all the prospective tenants who have shown interest decide to go elsewhere when they learn about the public hearings or other red tape necessary to get in the building.
Joe Palmer, Director of Communications for the Haltom United Business Alliance, says this type of property is exactly what Haltom City would like to see a lot more of, millions of dollars spent on a new building. Unfortunately, now, the landlord can’t rent it because the city makes it too hard to get new tenants in and then passes an ordinance barring many of the potential tenants because they are automotive uses. The prospects vote with their feet and their wallets; they simply go to Ft. Worth or other surrounding cities where they can walk in to the city and get an occupancy permit.
Palmer admits that some automotive businesses are not attractive from the street and that some have code enforcement issues, but he contends, these are outliers. The group should not be judged based on a few bad operators. Palmer argues that auto-related businesses a necessary part of the city’s business community. Palmer adds, “We proposed imposing a fee for a business license on all garages and paint and body shops, to offset any increased cost of annual city inspections for compliance, and to make sure there are no inoperative vehicles left outside more than 24 hours. He admits that some residents of the city want none of these businesses, but believes the citizens are underinformed about the tax consequences, putting more of a tax burden on residents. Also, over time, entire areas or corridors like NE 28th Street become wastelands, with almost no businesses.
Sturgeon points out that over time this has a perpetuating effect, as corridors get more vacancy, new businesses don’t want to be there, and the downward spiral accelerates.
Allowing automotive uses is more important in Haltom City than in some other cities, according to Sturgeon. “In a city like Haltom City, with one of the lowest demographics in Tarrant County, automotive needs are greater because people keep their cars longer and older cars need more repairs and service,” notes Sturgeon. He says they just go to other cities to spend their money and get their automotive needs met.
Sturgeon recently published a book about the vital role small businesses play in creating prosperous communities. The book is tiled, Keeping the Lights on Downtown in Americas small Cities: The Critical Role Small Businesses Play in Bringing Back Jobs and Prosperity. Sturgeon points out the difficulty in revitalizing South and Central Haltom City when whole segments of businesses are barred by ordinance from filling vacancies along the city’s main commercial corridors. He has also started a campaign, MakeHaltomCityThriveAgain.com.
About Make Haltom City Thrive Again
The Make Haltom City Thrive Again website offers information and resources about its purpose and goals. For more on Sturgeon’s personal ideas and background, check out his book Keeping the Lights on Downtown in America’s Small Cities and watch the videos on his Facebook page. Ron is also the founder of the Haltom United Business Alliance (HUBA) which represents existing business interests in Haltom City and promotes growth of diverse businesses as well. HUBA is not a political action committee and does not endorse candidates. If/when Ron endorses candidates, he will do so on his own with the Make Haltom City Thrive Again organization.
About Haltom City
Haltom City is a medium-sized city between Dallas and Fort Worth in Tarrant County, TX. The city is diverse and majority working class, with a growing population that is approximately 10% Asian-American and 45% Hispanic. Haltom City benefits from being only minutes from both DFW Airport and Downtown Fort Worth, with direct access to major highways including I-820 and SH-121. Small businesses that have historically provided products, services, and jobs to residents included a once thriving automotive industry. The city has seen a decline in small businesses, especially automotive businesses. The city is healthy financially, with median household income growing around 8% in the past year. Haltom City has an opportunity for continued growth through undeveloped land and many vacant buildings, especially in major corridors close to the city’s center. The city has good staff and a city manager who is interested in seeing more businesses come to Haltom City, but they can only do as directed by City Council.
About Haltom United Business Alliance
Haltom United Business Alliance (HUBA) wants to give members of Haltom City’s business community an advocate and to keep those businesses informed about issues that affect them. They want to make sure Haltom City is business friendly and nurtures small business growth, including automotive businesses, and bring more restaurants including breweries and a major grocery store to the city. New businesses and growth in existing businesses will create a stronger tax base which will allow the city to pay its first responders wages that are competitive with surrounding cities while improving Haltom City’s facilities and infrastructure. HUBA believes that the southern and central parts of the city need a revitalization plan, to prevent further degradation in those areas, and wants that to happen before the inner-city experiences increased crime and more blight. As retail and office uses are in decline, its more critical than ever to attract new businesses. They believe that such a plan requires a strong relationship and support of the business community. Anyone who owns a business in Haltom City is eligible to join HUBA. Dues are $20 annually or $50 for a lifetime membership, and membership is 100% confidential. To join, contact Joe Palmer at (682) 310-0591 or by email at [email protected]. Visit the group’s Facebook at Haltom United Business Alliance.
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