Small and home-based businesses were on the agenda at Wednesday night's Common Council Legal Committee meeting. Committee chair John Friedman (Third Ward) introduced the topic by reminding the committee that Hudson, with a self-employment rate of 9.96 percent, is the greatest center of entrepreneurship in the entire state. He wanted the committee to look for ways to protect home-based and small businesses and suggested strengthening the language in the city code and introducing a "more expansive definition of customary home occupations."
Inevitably the discussion came around to the situation that inspired it in the first place: GAR's blanket reclassification of B&Bs as commercial instead of residential properties. City attorney Cheryl Roberts reported, based on her conversations with ORPTS (Office of Real Property Tax Services), that the reclassification has "not much significance at all." Since Hudson is a "non-homestead community," the tax rate for commercial property is no different from the tax rate for residential property. The only difference, it seems, is how the value of a property is determined. The recent sale of comparable properties is the basis for assessing residential properties, whereas the income produced in a building is factored in for commercial properties. Roberts stressed that ORPTS classifications have nothing to do with zoning classifications, so being reclassified commercial for assessment purposes does not mean a B&B cannot operate in a section of the city zoned residential.
"So far as I can tell," said Roberts, speaking of GAR Associates' and city assessor Garth Slocum's reclassification of the B&Bs, "they did what they were supposed to do," expressing the opinion that the B&Bs had been improperly classified in the past. According to Roberts, it would be unethical for GAR to reclassify the B&Bs now, since only factual errors can be corrected after grievance day. Friedman argued that the B&B owners had not been given "effective notice" of the reclassification and did not know they needed to go to the assessor to protest the reclassification until it was too late to do so.
Council President Don Moore expressed his "general sense of outrage" about the situation. He talked about the B&Bs as businesses that had been operating on a "relatively settled set of assumptions," then stated that he was personally invested in wanting "this assessment to be perceived to be as fair as possible," and concluded, with frustration, "and to have this monkey wrench thrown into this." He shared his opinion that "we should get rid of the assessor."
Linda Mussmann, speaking from the audience, wanted to know how many people were impacted by the reclassification. Friedman indicated it was six, to which Mussmann responded, "So, six people are in a bad mood. Are you asking for someone's head over six people?" Friedman responded that it was not just six people, but it was six businesses that are "fundamentally important to Hudson." He cited the importance of the lodging provided by the B&Bs to the success of the restaurants, shops, and cultural venues in Hudson, suggesting that people who stayed in the B&Bs probably also found their way to TSL, Mussmann's not-for-profit theater.
Friedman concluded that a B&B is a "special animal" that deserves special treatment and special protection. Although committee member Cappy Pierro (Fifth Ward) disagreed, Friedman went on to say, "We're not making up the definition of B&B. We have to think about how we encourage them without putting them at a great advantage or disadvantage."