M3 restaurant closed due to seizure

[ron_newman]

M3 restaurant, at Highland Ave and Cutter Ave, has big orange SEIZED signs plastered all over the doors and windows.

A notice left at the front door says that the Constable's Office seized the restaurant on behalf of landlord Christos Poutahidis, because the restaurant owes the landlord $25,238.

Comments

that guy...

[rachelmello.livejournal.com]

I really wish our tax structure was such that every fiscal quarter that a property sat empty, the landlord had to pay a higher tax rate, expressed as a percentage of asking price for rent. One fiscal quarter empty, pay 25% of the asking price, two f-quarters empty, pay 50%, up to 100% every quarter until the place is rented, and to be adjusted downward if the rent is lowered.

Right now this guy buys up property all over town and doesn't care when some of them sit empty because he writes it off as a deduction against the rest of his properties. He'll make a ton of money off the residential units he's building on my street, jack the rent on his commercial properties through the roof, and then deduct those "losses" from his profits for tax purposes. It hurts our city in so many ways, and the city really has to enact some progressive tax structures to deal with this predatory behavior.

Re: that guy...

[ron_newman]

What else does he own in Somerville, besides the M3-Kickass block and the big new building next to Rosebud?

RE: Re: that guy...

[vonelftinhaus.livejournal.com]

oh I am probably missing some properties but he owns the 2 family (maybe 3) on the corner of willow/Morrison diagonally across from Y-not. The lot of land rachelmello is referring to you see close to the end of the bike path on cedar- he built out a brick building on the property and constructed a brand new. The land itself is between other property's and the bike path- so it is in a very weird spot

RE: that guy...

[rlcarr.livejournal.com]

So how exactly does he make money on your alleged scheme, given that income tax rates are less than 100%?

I have two properties, A and B. A has annual expenses of $10,000. B has annual expenses of $15,000. I rent A out for $30,000 and leave B vacant. My total profit is ($30,000 - $10,000) + ($0 - $15,000) = $5,000. I pay (say) 40% combined income tax on that and end up with $3,000 after tax.

Now I rent out B for $10,000. Total profit is now $15,000 and after paying 40% income tax I'm left with $9,000. That's better than $3,000.

Having deductible expenses is only going to help your overall situation if you would have had to incur those expenses anyway -- so if you're going to have to pay $N for something, then sure, it's to your advantage to try to structure things so that $N is tax-deductible. But if you didn't have to pay $N, not paying $N at all will always be better for you than paying $N and taking it as a tax deduction.

Re: that guy...

[rachelmello.livejournal.com]

The equation is probably closer to Property B has annual expenses of $10,000 and he could easily get $100,000 for it and make a tidy profit, but instead he asks $500,000 for it, claims a huge loss, and leaves it empty.

Re: that guy...

[rachelmello.livejournal.com]

...my point being that he can absorb a loss on Property B while making a huge profit on Property A, as long as within 3 - 5 years someone comes along and makes a bad business decision to rent at his inflated rates that will cover his losses. They can make a go of it for a year or two, he makes back his losses, they go out of business, and the cycle starts again. That's a perfectly successful business strategy for the developer that is actively damaging to the city. The laws should not be structured such that people can make lots of money off property in ways that actively harm the people who live here.