As part of your company's operating expenses in late 2020, you will likely see a new line-item for "LID", which is the Local Improvement District tax. Your landlord will likely pay this tax and pass it along proportionately to the tenants in the building. It has the choice to pay the tax all at once, or to finance it and pay it over a 20 year period.
Depending on your company's lease, there are a few ways that the landlord may calculate how this LID tax is paid back and over what period of time.
The most likely scenario to be adapted would be to amortize the tax over the 20 year period and have it paid back proportionately by the tenants of the building over that period.
We ran a sampling of buildings that are impacted differently based on their proximity to the improvements and associated benefit. Buildings closer to the waterfront receive a greater impact and "benefit".
If a landlord elects to pay the tax over a 20 year period, it will carry the interest of a future LID bond rate. For our example above, we used 2%.
To summarize the impact, the column highlighted yellow labelled "LID/SF/Year" shows what a tenant in one of the sampled buildings may pay on a per square foot basis each year.
To find out your company's building's estimated LID assessment, follow this link to the Waterfront.org's LID calculation tool:
Please note that there are a number of variables that will go into how each landlord and property owner may elect to pay and allocate or redistribute this LID. This was just an example of what may occur when the LID is put into place and should not be relied upon to make financial or other leasing decisions for your company. Please feel free to contact us to discuss your specific property and possible impacts.