That acre in midtown Manhattan: $800 million -- as a teardown!

I don't know how reliable the estimates involved are, but this article from a Pakistan website came across a google alert today.  The property is a 1-acre teardown within a short walk of Manhattan's Grand Central Terminal: 

Roosevelt Hotel to be sold out Naveed Miraj ISLAMABAD: The government has finally decided to sell the famous PIA-owned Roosevelt Hotel in a bid to add some foreign exchange to the national exchequer and has asked the Privatization Commission to arrange open bidding to this end. The commission hopes to get a minimum offer of eight hundred million US dollars as compared to two hindered million dollars the Shaukat Aziz-led government had expected for the hotel located in the busiest commercial area of Manhattan in New York. The previous government was in haste to sell off the hotel apparently to oblige some of its blue-eyed officials but shelved its plan following the Supreme Court's ruling in the Pakistan Steel privatisation case. In the wake of the current economic crunch, the government has decided to sell the hotel in the hope of getting handsome foreign exchange.

If you are one who thinks that land rent -- the value which the land itself would rent for each year -- is not a large enough tax base to provide much in the way of revenue, consider that this single acre, taxed annually at 5% of its proposed selling price, could provide $40 million each year in income to support the spending needs of NYC, NYS and the federal government.   I don't know what NYC is collecting in property taxes on land and buildings, but it isn't much -- which is part of why the asking price can be so high.

Think what it would mean to shift $40 million worth of taxation off wages, off sales, off buildings! 

PIA is the airline of Pakistan.

See previous posts about this site at That block in Manhattan ... and Hotel Roosevelt For Sale at $1 Billion

Comments

[Chris Tolworthy]

Off topic, and I confess I haven't read every post recently (incredibly busy on certain projects), so my apologies if you've covered this already. But I just stumbled on this from Reuters: http://www.reuters.com/article/newsOne/idUSN1249465620080812?sp=true
"Study says most corporations pay no U.S. income taxes"

Even this alone would be a good reason to replace work taxes with land taxes. It's easy to hide profits but hard to hide land.

It's not that I want to hammer big corporations, but I feel sorry for the small businesses that don't have the ability to hide their profits. A move to land tax would not harm small businesses (since they already pay plenty of tax) but would allow them to compete fairly with the big boys. Result: more competition, more entrepreneurs, no tax avoidance, more revenue for society, and that's above and beyond all the other advantages of LVT (maximising efficient use of resources, removing theft from economics, etc.)

[LVTfan]

I think I did cover that story ... or maybe that post is still sitting as a draft (that collection is embarrassingly large -- I'll go look) ... but I appreciate your making the connection, which I think is a very important one. I don't know how much the owners of the property are paying NYC in property taxes, but suspect it isn't much. Hotel guests pay a tax on their room rents to the state and likely another to the city.

I recall reading that the hotel owners were satisfied with the $14 to $22 million annual profit on the hotel. The building is merely a "taxpayer", like the 2-story building on 72nd and Madison -- see http://lvtfan.typepad.com/lvtfans_blog/2008/03/the-taxpayer-at.html