A Conversation With … Shawn Whitney

What benefit do tax abatements offer developers?
A tax abatement is a freezing of the real property taxes at the pre-redevelopment level. For instance, a building that hasn’t been redeveloped, the tax base is going to be low because it’s not an appreciating asset. In a lot of cases, the taxes are decreasing because the value of the building is decreasing. It’s usually a building that is functionally obsolete today. An abatement incentivizes a developer to look at a building that would cost way too much to redevelop. A lot of developers really do have a greater good mindset. Most of mine have a mission in mind and want public benefit out of what they do. Nobody is going to do anything for free. The only way they can make a profit and do one of these old buildings is through the use of tax abatement and historic tax credits.

How do tax abatements benefit the public?
Downtown has exploded with residential. That’s fantastic. Those boots on the ground create business opportunities every day for people. Look at all the businesses opening up because of that. These buildings increase the tax base. It’s not like they fall into disrepair over five or 10 years; they fall into disrepair over decades. It’s because there is no reason or profit for a developer to come in and redevelop that building. It takes these building owners who may have been paying for example $5,000 a year on taxes and keeps it steady for 10 years. But in year 11 and the next 100 years, those taxes are $50,000 and go up every year thereafter.

That’s what happening right now in Springfield. Abatements didn’t really start happening until the mid-2000s. Now, we are starting to see these properties come on tax rolls. I’m involved with clients right now who are dealing with that. Their taxes are going from $10,000 to $100,000. There are many buildings in downtown Springfield where the jump in assessed value of their building will go from a few hundred thousand dollars to a multi-million dollar value. The city, the county, the public schools, the library, all of them benefit.

Some say these developments would happen without abatements. Any truth in that?
That is a misconception. Other than my word and my client’s word, we can look at history and see that’s wrong. Before abatements, these properties just sat there.

Some city council members have been weary of blight. Does Springfield blight too much?
In my opinion, we should be blighting more properties. We are seeing the benefits, the growth and the people moving downtown. The student population downtown is huge and the colleges are benefitting from that. You can walk down Walnut (Street) and see that it’s working. The retail and restaurants, that’s how you can tell it’s working. While we are abating property taxes, we are generating sales taxes.

What projects have you been part of?
Much of my stuff is in Springfield. I’ve been involved in Sky Eleven, Brick City – which to this day is one of the neatest projects I’ve been involved with. It transformed that whole north side of downtown. When I walked through with the partners that own it, I didn’t have the vision, but fortunately they did. I’ve been involved with Mother’s Brewing (Co.), the Wilhoit, the Heer’s building – that was a great one. Three times I was involved in that deal.

You were also part of Hotel Vandivort’s redevelopment. Why was that controversial?
That was a difficult deal, one council wasn’t excited about at first. That building was coming off a tax abatement, so it was hard to sell this new plan to council. Fortunately, they agreed to go forward and now look what we have. You want to talk about transformation? It can’t be underestimated what that does for the perception of our city for people who come in. The message that sends from the city is we are willing to back our businesses and I think that goes a long way.