Cira Center is Filling Up

As much as I love to see businesses coming into the City, those tax breaks were, in my opinion, disgusting.

As huge law firms move into Cira Centre, the biggest simply from within Center City itself, all the partners pay ZERO on their huge salaries. Does that seem right? Rich partners, many making seven figures, paying nothing, while middle and working class people make up the difference? We pay for police, while they pay for the extra gas to fill up their Porsche?

You can argue about the BPT till the cows come home, and whether it affects small business owners, etc. But the tax free zone for Cira Centre, passed over the objection of City officials, is literally a tax break purely for the rich.

The BPT's job-thwarting properties have been well established, whether we're going to do something about it is the question. For businesses moving from the City to the Cira Center, I think that you'd be more correct. However, these businesses moving from the Suburbs to the City bring jobs that arguably would not exist here, but/for the tax breaks. Also, keep in mind that the tax breaks end after a decade; after that everybody at the Cira Center pays full freight and then the deal looks a little bit better.

What stops them from leaving in ten years? They are just leasing after all. This makes it inherently different, than say, the 10 year prop tax abatement, because a homeowner is only leaving if they can sell the house, and so the City does not have the potential for a huge net loss. But, what stops these law firms from simply going somewhere else when their leases are up? (Actually, good question, Jeff, do you know how long their leases are for?)

Again, the people that this benefits are law partners, many making a million bucks, who will pay nothing in taxes. nothing.

And considering that the biggest or second biggest firm in the City, Dechert, which was already here, took advantage of the tax breaks, the city will lose tax revenue for years.

I see your point about leaving in ten years but they aren't exempt from paying sales tax when they go to lunch or dinner. And I had
thought that wage taxes were not included in the KOIZ thing, just business-side taxes, but I guess from what you're saying that's not the case.

For better or worse I think that our ideals of taxation just aren't going to work anymore. I don't like it either but if all the classes I took this year taught me one thing, it's that we have no choice if we want to have any businesses in the city in the first place.

Law Partners do get paid wages. They are considered owners of their businesses, and their salaries are business profits, and so are not taxable for ten years. We certainly do not make that up in ther lunches, especially, again, considering the biggest tenant is a rich firm moving from a different Center City building. This is why it was especially obnoxious- it literally only affected law partners, already some of the richest people in the City.

In real terms, each partner making a million dollars is getting a solid $45,000 tax break per year. I do not think that can really be justified as working class people pay their same wage tax.

As for tax policy, I belive it is Brookings that has shown just how destructive the war of Cities and States to provide special "one time only" tax breaks are. It is a zero sum game.

At least Comcast, with its skyscraper, got a one time only break, that was not nearly as bad as that for Cira Centre, and is in fact assuming a lot of risk in what they are doing, and is banking on growing substantially within the City to make their building a success. The other firms? No commitment at all.

Most of the larger tenents have signed leasing deals for longer than the abatements, so they're not likely to take the money (or tax cuts) and then run. Also, receipt of the tax breaks is contingent upon making investments - either capital or in terms of personnel, at the KOIZ. In the long-term, these investments will pay off and when the Cira Center tenents come off the abatement, we'll have a huge ratable in University City, something we never had before. Sure, some folks (law partners) will do pretty well in the meantime.

I am proud to say my Dad was a part of the construction at the Cira Center. He was an Operating Engineer, Local 542. He was a wonderful man, we miss him very much. The Cira Center was going to be my Dad's last job and then retire, but he did not make it that long. He got cancer if Feb. 2005, and died Apr. 5, 2005. He was proud of the Cira Center, and it is very special to my family & myself. I see the Cira all lit up, and just feel a great sense of pride. My Dad is looking down on the world and the one sky scraper that stands out is the Cira Center. I am glad to have The Cira Center to keep me connected to my Dad, my hero, Charles "Chickie" Schickling. We love you forever.