- The Washington Times - Wednesday, February 14, 2007

Billy Martin Jr. is among a growing number of small-business owners seeking a cap on commercial property assessments.

Mr. Martin, president of the Georgetown Business and Professional Association and the fourth-generation owner of Martin’s Tavern on Wisconsin Avenue, has seen his tax bill rise 30 percent to 40 percent in each of the past few years, no small increase in a city that taxes commercial buildings at the rate of 1.85 percent, nearly 1 percent higher than residential properties.

Those tax bills are passed from landlords to tenants, stressing the profit-margin line of the small-business owner.

If the owner of a city institution that dates to 1933 is becoming ever concerned with runaway tax bills and the overall cost of doing business, consider the anxiety of those small-business owners not in the restaurant industry.

As Mr. Martin, 46, said yesterday, “People always want to eat and drink. But let’s say you own an antique shop or art gallery — the tax increases hit you even harder.” Mr. Martin, who leases the building from his aunt, paid about $29,600 in taxes last year, which comes out to about $2,466 a month. He has budgeted another 35 percent tax increase in his business model this year.

It is a cycle that is driving more and more small-business owners out of the city. Mr. Martin is hardly becoming wealthy because of his establishment, which is why he is looking to open another restaurant in Northern Virginia. He needs another revenue stream to secure his family’s future, and Northern Virginia is considerably more business-friendly than the city.

Mr. Martin recently sat down with his staff and dispensed the small-business reality using a dollar bill, with 35 cents going to labor, 30 cents to inventory, 10 cents to sales tax and so on. When Mr. Martin completed his seminar with the dollar bill, he figured he was receiving about 7 cents on the dollar.

“It just kills me when I see things being done for the big conglomerates when they don’t actually need the tax breaks,” Mr. Martin said. “We [small-business owners] get kind of swept under the rug.” Mr. Martin’s is a lament being uttered with greater frequency, as the quaint character of the Georgetown business district is being lost to the national chains in incremental fashion. In addition to exorbitant property assessments, commercial rents are rising at a feverish pace, which prompts Mr. Martin to accept the anachronistic dimension of the small-business owner.

He sees a time, perhaps within the next decade, when the small dining establishments of Georgetown will be reduced in half, only to be replaced with ever more national franchises. If so, Mr. Martin said, the Georgetown business district will not be necessarily different from, say, the one in Peoria, Ill.

“As a small-business owner, you get hit from so many places, with everyone having a hand in your pocket,” he said. “Sometimes you ask yourself, ‘Is all the aggravation worthwhile?’ It just gets ridiculous.” Mr. Martin and the small-business owners of Georgetown have at least one political supporter in D.C. Council member Jack Evans, who has introduced a bill — the Commercial Real Property Tax Credit Act of 2007 — that would impose a 10 percent cap on annual property assessments.

Mr. Martin understands the strain the cap would put on city coffers, as detailed by Natwar M. Gandhi, the city’s chief financial officer. Mr. Gandhi estimates the cap would cost the city about $1.5 billion in tax revenue the next four years.

But Mr. Martin thinks a compromise could be brokered that at least would delay the extinction of the small-business owner in the city.

Until then, it is becoming financially more arduous for Mr. Martin to preserve his piece of history along Wisconsin Avenue.

And it hurts, considering what the city does to lure big-box retailers and what it did to secure a baseball team.

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