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Small City Shops Facing 62% Tax Hikes

Businesses rallying for legislative relief, large tax bills could drive them out of Hartford

May 21, 2007
By DIANE WEAVER DUNNE, Hartford Business Journal Writer

Jose “Pepe” Feijoo, the owner of Costa Del Sol Restaurant on Wethersfield Avenue, is among a group of small business owners in Hartford facing a significant tax hike on July 1.

The property value for his restaurant went from $978,800 to $1.5 million, which would drive his annual property taxes up from $51,073 to $74,397, a 46 percent increase.

He’s not the only one worried about skyrocketing taxes. Kelly D’Aprile, who runs the family-owned D&D Market on Franklin Avenue, saw his assessment go up 92 percent, from $693,210 to $1.3 million.

D’Aprile said that while his family, which has been operating its market in the city since 1935, has a genuine love for Hartford, doubling their tax burden “would make us think about leaving.”

“It is so important for the city for businesses to survive. We can’t survive with excess taxes,” he said. “We know it will affect us. They [city hall] can say what they want. Take D&D, Mozzicato, Carbone’s off Franklin Avenue. Forget about Franklin Avenue. It’s gone.”

Their concerns aren’t isolated. According to another Franklin Avenue business owner, Paul Mozzicato, who, along with his family, runs Mozzicato de Pasquale Bakery, about 800 small commercial businesses are facing a similar financial squeeze if city and state officials don’t remedy the impact of the Hartford’s 1999 revaluation.

City officials say the number of affected businesses is much smaller — about 200.

Stay Sought

Regardless, Mozzicato and several others are calling for a one-year moratorium in the implementation of the revaluation because of its potentially devastating affect on the small business community.

State lawmakers tried to address the impact of the revaluation by adopting various tax relief measures, including allowing municipalities to defer implementing the 1999 revaluation until its Oct. 1, 2006, assessment, the basis for the coming tax cycle.

They also adopted a tax relief bill capping the amount of tax the city can collect on apartments and homes to 3.5 percent. The measure also permits the city to reduce its assessment on those properties. Homes will be assessed at 23 percent of their market value, apartments at 33 percent, and all other classifications at 70 percent, including commercial properties, vacant lots and motor vehicles. Businesses also face a 15 percent surcharge, which is added to their tax bill.

The 2006 tax relief bill omitted a particular class of commercial property owners that have always been subject to the commercial surcharge -– those who own less than four apartment units with more than 50 percent dedicated to business purposes.

Hartford Mayor Eddie Perez is evaluating a number of options to fix the situation, and is asking the legislature to extend the residential cap to include some mixed-use properties, said Sarah Barr, the mayor’s spokeswoman.

City officials maintain their hands are tied, that only state lawmakers can create a law that would allow the city to reclassify properties for tax purposes.

Disagreement On Number

However, there is a disconnect between what the mayor’s office and small business owners say regarding the impact and number affected by the revaluation.

City officials maintain that small business owners – about 206 — with a combined commercial property with less than four housing units will face tax increases of $6,321 on average due to state mandated revaluation alone.

But Mozzicato said that there are hundreds more that will be gravely affected by the revaluation if the legislature doesn’t act quickly.

He also points out that the city’s major businesses are not being hit by such dramatic assessment and tax increases.

The city’s 10 largest commercial property values increased about 22 percent during the 1999 revaluation. However, taxes for that group will rise about 3.6 percent, much less than the increase being dealt to the city’s small business owners.

John Tornatore, owner of Gordon Bonetti Florist on Franklin Avenue, believes that even if government officials are able to fix the problem for multi-use business owners, he too is worried about the other small businesses that would not qualify for some relief.

Tornatore, who rents apartments above his flower shop, said that while the good news is that the city’s property values are going up, the bad news is that there has been an unfair shifting of the tax burden onto small businesses from homeowners.

If the legislature does nothing, he said, “I’ll be for sale.”

He and other South End merchants met last week to evaluate their next step in how to lobby city and state officials for tax relief.

In a written statement, Hartford Mayor Perez acknowledged that the passage of last year’s tax relief legislation spared Hartford homeowners and large apartment buildings, while pushing a tremendous burden onto small businesses.