Monday, January 18, 2010

Westfield Opposes Tax Credit for Wheaton Small Businesses

Westfield, the giant mall owner that is requesting a $4 million county subsidy to attract Costco to Wheaton, is on record opposing a tax credit that would help small businesses in Wheaton – including its own tenants. Folks, this story never seems to end.

The Wheaton Central Business District (CBD) has been designated an “Enterprise Zone” by the state and Montgomery County, which enables property owners to be eligible for property tax credits that are percentages of the increases in the assessed value of their properties. Westfield owns six parcels in Wheaton that together comprise the mall property. Over the last five years, the company has appealed the state’s assessments twenty times out of thirty opportunities. The company’s aggressive assessment appeal strategy is designed to lower its overall property tax liability and not to take advantage of the Enterprise Zone tax credits.

Westfield is a huge international conglomerate, and its Wheaton mall is the second most profitable mall out of the 55 malls it owns in the U.S. But Westfield is not the only business in the Wheaton CBD. The CBD contains well over a hundred small businesses, some of whom are Westfield tenants. Many of them are not property owners and are not directly eligible for property tax credits. Delegate Al Carr (D-18), who represents Wheaton, introduced both a 2009 statewide bill and a 2010 local bill that would enable the county to allow tenants to claim tax credits based on the jobs they create. That would open up the Enterprise Zone tax credit program to every business in the CBD.

But Westfield opposes Carr’s bill. In a letter to the Montgomery County statehouse delegation, the company said, “While we recognize the need to encourage small business growth, we believe that the bill as written would result in efforts to reallocate Westfield’s property tax credit to its tenants.”

So Westfield would like the small businesses in Wheaton to contribute to its requested $4 million county subsidy for its Costco tenant – a tenant that would damage and perhaps close some of them. Yet, Westfield opposes a tax credit that would help those small businesses survive.

This raises a real question of fairness.