A Tale Of Two Cities; Help Is On Its Way.
1. Downtown Los Angeles Where Art Thou?
The L.A. Times, Sunday Edition says it again, downtown Los Angeles is DEAD! The Urban Renewal of the 60's, the death of Bunker Hill's 1500 victorian dwellings, is suffering. Naming Rights are going on the cheap, even on Bunker Hill, and vacancies are high.
Downtown work live housing projects are still on hold after four years of efforts. People get excited about fixing the Neon on top of a $14 per night hotel at 5th and Main Streets, which is four blocks from the Biltmore Hotel and Pershing Square at 5th and Olive Streets.
Meanwhile downtown San Francisco has the nation's highest rents; try to find a $14 per night room there, the lowest vacancy and a proposed moratorium on work/live conversions of industrial space. It is the hip place to be
What gives? It is housing of all types, it takes people who live, work and play in the neighborhood. Like 22,000 of them in the South of Market Area [SoMa] in San Francisco. Or, 15,000 who live in downtown San Diego.
On the other hand downtown Los Angeles is home to 400,000 worker bees, including the State of California, the City of Los Angeles, the County of Los Angeles, the Federal Government, Law Firms, etc., all of whom are doing pretty well. Is it possible that 5% could want to live downtown, walking to work, in a very exciting environment, tax free? We think so.
Could 5% of the 300,000 to 500,000 workers in the Entertainment/ Telecommunication Industries want to work tax free in downtown Los Angeles? We think so. Could 5% of the 1,000,000 daily visitors want to live tax free in downtown Los Angeles? We think so, and the list goes on. It is clear that downtown Los Angeles could be home to 50,000 to 100,000 and never be a problem.
Here's a welcome to Harry Knowles, come downtown with your home-based business, and really shake up Hollywood, which is one-mile from the USC School of Cinema.
Several miles down famous Sunset Blvd. [it runs from downtown to Pacific Coast Highway] is the land of dreams called Malibu with Bel Air and the Hollywood Hills in between. Here we see home prices from $2M to $60M with many famous names attached.
How do you do a $60M home deal or $1M for that matter; get your tax advisor fast, and become an incorporated home-based business, which becomes the tenant. Suddenly it is rental property and qualifies for like kind exchange treatment.
2. Help is on its way.
The word is out, we have an election coming and everybody within the Beltway is ready to compromise and get home to campaign. "...Sens. Harry Reid (D-Nev.) and Larry E. Craig (R-Idaho), leaders in their chamber, said in separate interviews that there is hope of a compromise on the marriage tax issue [Distressed Communities]..." See the LA Times.
It started yesterday with the President's Radio Address and begins in earnest in the Rose Garden next Tuesday "...On Tuesday, he will gather with congressional Democratic leaders in a Rose Garden ceremony to press for the Democrats' legislative goals: a patients' bill of rights, a Medicare prescription drug benefit, stricter gun control, and money for better schools and teachers [and distressed communities]..." See the Washington Post.
As someone once said, "Lets Make A Deal." A little marriage penalty relief, a little small business tax cut, a little pension reform, and hopefully a little distress communities legislation for those left behind, which includes downtown Los Angeles. If these items get signed into law, then Work/live housing in downtown Los Angeles will become very attractive for employers, employees, rich or poor. Capital Gains Roll Over for investments in Enterprise Zone Businesses, which can include film, music, or internet companies, will be the name of the game for all to see.
This story is not only for downtown Los Angeles, it could be for Las Vegas, Phoenix, Denver, Portland, Tacoma, Seattle [all of which have law schools in their area]; and North Delta Mississippi Enterprise Community adjacent to Oxford Mississippi, home of Old Miss. Nashville Enterprise Community home of the Vanderbilt Cheerleaders or Bridgeport Connecticut Enterprise Community home of University of Bridgeport. Let the games begin.
Jim Schneider, LL.M.
The Taxman86 Speaks... is copyright 1998-2010 by James E. Schneider, LL.M. Inc.