The Value of a Business (or "The Cost of Doing Business in Barnstable")

Should a piece of business property be assessed at the value of the entire company?

Should my home assessment include the value of my laptop, TV, furniture, and pets?

In today's Barnstable - where taxes are high, homes are overvalued and not selling, good jobs are scarce and tourism (the lifeblood of our economy) has been low - people looking for any reason at all to lower their taxes are willing to suggest exactly that - a piece of business should be assessed at the ENTIRE value of that local business. Not that a Mobil station should be assessed at whatever billions of $$$ that Mobil is worth, but that a local store or mall that has only one location should have the property assessed at whatever price someone else pays for the property AND business.

Property assessments in Barnstable have been skewed for years. A combination of bad assessing, 2-acre zoning, building caps and a few other factors have caused a dramatic increase in assessed residential property value. We asked for 2-acre zoning. We wanted a cap on new homes. We knew that higher property values would result, and that was a major reason people wanted these measures - they wanted more valuable homes. BUT, now we are paying for it - because higher residential property values means higher residential property tax bills.

Now, looking to shift the burden of taxation to a faceless "Corporate America", there are some that will do anything to (unfairly) shift the burden away from themselves. Looking to avoid paying for their own mistakes, they try anything from the split-tax to trying to improperly assess business values. Let's take a closer look at the value of a business:

Assuming that someone is going to buy a business and its property, what are some major factors that make a business (and its property valuable)?

• Strength & viability of the business
• Property value
• Value of recurring contracts
• Local goodwill
• Historicity of business and site

Strength & viability of the business

If someone is buying both the business AND property, with the intention of continuing to run the business, then the actual value of the sale is going to be based (at least partially) on the strength and long-term viability of the business. If the business is floundering or outdated, it is worth less. If it is extremely successful or has a bright future, then it is worth more. If the business has a local monopoly, it is more valuable, too.

Property value

Property value is a very important factor in business value. Size, location, structures, parking, etc. all play a large role in setting property values. A desirable size & location and adequate parking allow a new owner to be comfortable on-site. A building without need of renovation is another valuable commodity. Without some of these items, a piece of property is worth less.

Value of recurring contracts

The value of recurring contracts is a value that cannot be underestimated. While some may be undesirable, generally, a recurring contract is a highly valuable asset for a purchaser. Guaranteed lease revenue, long-term contracts with large corporations or government, patents, etc... all help increase the investment value of a purchase.

Local goodwill

Local goodwill is a commodity unlike any other. Local goodwill can make an ordinary business into a nationally known commodity. Take Four Seas Ice Cream - an ordinary ice cream shop, BUT local goodwill (among both residents and tourists) has propelled Four Seas into a name known nationally and it has become synonymous with Cape Cod summers. Having a good name in the local community is key to business success, and having a GREAT reputation locally is what helps makes you into a GREAT success. If someone were to buy Four Seas tomorrow, they would be paying a premium for the name and its local success.

Historicity of business and site

Historicity of a business or site ties in with local goodwill. Do people go there because of history? Does the site have historical value? Is it located in a highly historical area? Take the Hyannisport general store, right next to the Hyannisport Post Office. That tiny little store makes a huge profit because everyone HAS to go see the Kennedy Compound and Hyannisport.

I say all this to illustrate my point - the sale price of a business and its property is not what the property should be assessed at. The innate characteristics, features and advantages a business contains cannot be included in the value of a piece of property. If someone buys Four Seas Ice Cream and its property to tear down the building and put a strip mall in, that value will lose the majority of its value because the one thing that makes that property so valuable is not the property itself, but the business and history that makes Four Seas Ice Cream (the company) so valuable. Without Four Seas Ice Cream (the company) included in any sale of the land, the sale would worth MUCH less.

(Please note that I was only using Four Seas Ice Cream as an example. I am not saying that it has/will be sold.)

False Alarm

As the blogger from Barnstable who proudly resides in Precinct 3, I try to chime in whenever the Precinct, or issues directly affecting it, is mentioned in the local blogosphere.

Readers who found Precinct 3 mentioned in Gary Lopez' latest blog post can rest easy. Precinct 3 has absolutely NOTHING to do with the story, which is another pointless attack on Janet Joakim.

Speaking of which, in this latest post, the author of the COG blog has done two interesting things that cannot be a good indicator of his future power (if any) in Barnstable politics.

First, he again posted the account numbers and routing numbers for Janet Joakim's bank account, by adding the infamous picture of her check. As I have pointed out previously on this blog (here and here), this action is a crime. That Lopez has posted the check AGAIN is to spit on the face of common sense, and hopefully will only be further ammunition for any charges and/or investigations that should be conducted of the COGers.

Second, Lopez made this little quip "If Janet Joakim has the gall to run for reelection next year "... Hmmm... I thought the COGers we going to recall her... What happened to that??? Apparently, they either don't have the signatures or they don't have the votes (they NEVER have the votes). Though, the embarrasment of being voted down is always overshadowed in their minds by the "success" of collecting the signatures.

Last Tuesday, we had "Meeting of the Voters"... 300 people signed that petition... Not even 100 showed up... Looks like COG can get the signatures, but not the vote... Councilor Rugo was right when he said that anyone could collect 500 signatures in a day - half of them just from people who want you to leave them alone... Looks like plenty of people want the COGers to leave them alone, and they're saying it at the ballot box and meeting rooms... But folks, the BEST way to get them to leave you alone is to NOT SIGN THEIR PETITIONS.


By the way, the town DID record the Open Meeting, and the complete video is available for viewing or download on the town website, or you can download it by right clicking on this link --> and Selecting "Save Target As...".

Quick Thoughts on the Meeting of the Voters

Some quick thoughts on tonight's Open Meeting of Voters

Moderation

• I thought that the moderator did a good job in his breakdown of the time allowed for each of the three issues.
• However, he was a tad too under-spoken, oftentimes letting people ramble on over him or ignore what he had said.
• His explanations and preparation were excellent, and overall he did a good job.

Participation

• It was good to see a decent number of people at this meeting, however, the auditorium was not close to half full.
• There definitely appeared to be less COGers than other citizens.
• For the most part, this meeting was VERY civil, and there were not many negative personal comments.
• Even though commenters were given a generous limit of 5 minutes, the entire allotted time was rarely used by anyone - only maybe one or two speakers came close.
• The one exception being the author of the COG site.

COGers

• For the most part, the COGers were certainly outnumbered
• However, Gary Lopez (of COG fame) thought he was entitled to speak whenever he pleased, however he pleased and for as long as he pleased, regardless of what the Moderator said.
• The other COG supporters (including Mr. Julius) made their points well, without breaking rules.

Access

• For those of us unfamiliar with the High School, finding the Knight Auditorium proved to be a challenge, and there was no signage telling us where to go.
• While there were some people recording the meeting on their own, I do not believe that this was recorded for television on Channel 18. Maybe I am incorrect about that, but the meeting certainly should have been either aired live on TV or recorded.
• If anyone has a copy of any video of this meeting, or knows that the town DID in fact record the meeting, please let me know.

Overall

• As I have said, this seemed to be more of an inquisition where the COGers thought they would have two hours to grill the Councilors however they felt.
• The Moderator correctly allowed town officials to answer the charges the original (and invalid) petition laid against the town, before allowing public comment on each issue.
• The Moderator allowed the most time (about 1 hour) for discussion of Issue #1 - Split Tax, a little less time for the Greg Milne legal fees issue (about 40 min), and the least amount of time to the final (and already resolved) shellfish issue (about 20 min). This was a very good distribution of time, and mirrored the interest of those attending the meeting.
• Very little was accomplished at this meeting, except more discussion of these issues. However, I thought the Council did a good job of explaining their point of view, as did all parties speaking tonight.
• It was nice to have a pretty civil political debate in Barnstable, for once.

Mandates???

What exactly is a "mandate"?

Nowadays, everything that happens in politics is referred to as a mandate. If a politician wins by one vote, he has a "mandate". If a measure passes by one vote, it was a "mandate" of the people.

Also, according to the COGers, If a NON-BINDING referendum passes, it is a "mandate". They also claim that if a candidate is elected to two offices, and chooses to try to ILLEGALLY hold BOTH, he has a "mandate" because he was "elected to both".

Why must everything be a mandate? Why can't we just have a simple non-binding referendum? Why can't we simply be supporting a candidate to make sure he has a position SOMEWHERE in the fall?

In my opinion, the ONLY time there is a MANDATE, is when the voters of the Commonwealth of Massachusetts pass a BINDING referendum ORDERING the State Legislature to do something (like lowering the State Income Tax).

I'm sick and tired of hearing that EVERY little thing is a "mandate". Let's let the COGers see a real "mandate" - for them to leave us alone - tonight at the Open Meeting of the Voters. You need to be there.

More on the Check

Some people have complained in the comments on my previous post that I was being too kind to Joakim in my assessment of the "check-writing fiasco". On the contrary, my post was designed for a specific purpose - to point out the criminality of the COGers irresponsible actions.

Anyone could write a post simply piling on Joakim or supporting her. That was not my intention. Sometimes, the most interesting and important parts of arguments are not the main issue, but the OTHER things we learn during the discussion.

Am I disturbed by the "check-writing fiasco"? A little. Does it call into question the financial responsibility of a Town Councilor responsible for the large financial burden of our over $100 million budget? Yes.

On the other hand, one has to wonder if the problem was not the $45 bounced check in question, but a $400 unpaid bill, why didn't the store owner do anything about this in the last 3 years??? Couldn't he have gone to a number of places - Cape Cod Times, Barnstable Patriot, the league the purchase was made for, local Democratic leadership, a collection agency, small claims court - at ANY point before now???

Sounds to me that both sides have issues here, and that blame cannot fall on either party fully. I don't like sticking my nose into these "he said-she said" arguments. There is never anything of substance that any outsider, other than a real judge and/or jury after a trial, can add to the discussion.

As I said before, the MUCH larger issue here is the apparent criminality of the MULTIPLE COGers' actions. Posting someone's PERSONAL check online is not only irresponsible, but a criminal action. Posting the personal check with the sensitive personal info (routing number, account number, etc) blacked out would have been fine. Posting a TOWN check acquired via a Freedom of Information request would be fine. However, leaving someone entirely vulnerable to identity theft is inexcusable and warrants the attention of law enforcement officials.

This posting of personal info online was only the next logical step in the COGers' invasion of public officials' privacy. Whether it was John Klimm's cell phone number, or any of the other personal information not intended for public distribution provided by COGers in their online forum, they HAVE done similar acts in the past, and NO ONE should be surprised.

COGers Have Crossed The Line Into CRIME

Just days before the Open Meeting of the Voters, scheduled by the Council, irregardless to the illegal and invalid COG petition asking for one, the COGers have thrown themselves into the moral debate once again.

This time, the COGers' philosophy of attacking any/all public officials not named Greg Milne in any way possible has backfired on them. In the process of trying to attack the character of Town Council President Janet Joakim, the COGers posted a photo of an unedited personal check attributed to Councilor Joakim on a number of blog sites (including the one STILL written by Gary Lopez). This photo contained the full account and routing numbers for Joakim's personal bank account, a copy of her signature, and her address and phone number.

Any identity thief (or ANYONE really) trolling the internet may have found their "payday" with the wealth of info provided by the COGers. The COGers who have posted the check are either identity thieves or accessories to the crime. This is a serious matter.

If they had blocked out the extremely sensitive personal info (bank account & routing numbers) contained on this check, it would not be a huge deal, but providing this type of information is a REAL CRIME! They routinely complain about the "crimes" and "injustice" in this time, but now EVERYONE in town should know that the COGers are the REAL criminals in Barnstable.

It is one thing for the COGers to participate in the despicable practice of providing the personal HOME and CELL numbers for various public officials, and then calling them at all hours of the day. Public officials have official PROVIDED means of contact - work phone numbers, work email addresses, offices, etc... that we can reach them at, if we want to. Providing to the masses personal numbers that they have not given out for public consumption is bad enough, but actually providing PERSONAL FINANCIAL INFORMATION for Town officials in not just despicable - IT IS A CRIME.

I hope that these disturbing people get punished for this deed. Town residents pay attention - Do you REALLY want to support this kind of people - Criminals who will do ANYTHING to attack the people that they do not like?

Finally, Good Leadership @ the Cape Cod Commission

I know that the hot topics in Barnstable right now are the Open Meeting of the Voters and the new Budget. However, yesterday's Cape Cod Times reminded me of something I have wanted to mention for a while.

Last year, the Cape Cod Commission decided to hire former Barnstable Assistant Town Manager Paul Niedzwiecki as its Executive Director. This move may perhaps be the best thing that the Cape Cod Commission has EVER done. Not only did they select someone who has the ability to have a vision for large projects and communities, they got someone who can get it done, too. Much of the revitalization of Downtown Hyannis has come from Paul Niedzwiecki's vision for the area.

Recently, Paul Niedzwiecki has been making some waves in his new job. Quoting from an article in yesterday's Times,

On April 8, Cape Cod Commission Executive Director Paul Niedzwiecki announced settlement offers for five staff members whose positions would be eliminated as part of a reorganization of the agency. The moves were a response to recommendations from an advisory group formed in 2006, Niedzwiecki said.

Finally, the Cape Cod Commission has someone unafraid to move on and unafraid to challenge bureaucracy. Paul Niedzwiecki and I do not always agree, but his vision, passion, and common sense make him an excellent administrator. Perhaps, he could even make a good mayor.

Personally, I do not like the Cape Cod Commission. It has been too stringent and taken control away from the towns. It has limited growth too severely in some areas, and allowed others to grow out of control. I believe that the individual Cape towns would do a better job of controlling growth without the Commission.

That said, we do have the Commission, and it's highly unlikely that we will be leaving it any time soon. In that case, Paul Niedzwiecki is the best man for the job. The changes he is making are helping set the Commission on the right track. If he can actually make the Commission "less of a reactive regulatory agency and more of a proactive planning agency" as he has said in the past, then the Cape will be much better off. I support Paul Niedzwiecki in his efforts to make the Cape Cod Commission into a better agency, and wish him the best of luck - Cape Cod is lucky to have him.