PHILIP M. KLUTZNICK
This essay examines the significance of property taxation for business location, investment, employment, and related matters. The location of many businesses arises out of coincidences or personal preferences or the simple fact that the developer lives in a certain place and selects it as the site for his business. Surrounding events and the people involved combine to place a business in a certain locality and on a certain street. After it is developed, it may move because of a variety of conditions that have little to do with property taxes. One need only remember the shift of major components of the textile industry from the Northeast to the South forty to fifty years ago. The motivating factors were union versus nonunion labor costs, weather conditions—almost anything but taxes, although the move often involved a reduction in tax to the owners and sometimes other inducements to get the industry to relocate.
Urban centers tend to encourage the development or redevelopment of industry by offering special property-tax conditions. In some situations, abatement and special transactions are authorized by law. In others, the method of general assessment for industry or business is made favorable as against other usages of land.
Other elements may be considered more important in investment decisions than substantial property-tax variations. When American Community Builders was building the village of Park Forest in Illinois, for example, we sought to achieve a completely self-contained community. 1 Two of our most important decisions involved the site selection for the village business center and the selection of a site for developing light industry and commercial ventures.
The village business center presented a difficult choice. Some of the land we owned fronted a major east-west highway that provided easy access to a____________________