Leasing of urban land remains common
Posted by taxpayer on March 18, 2007
Georgist instructors always need to point out that people are quite willing to develop land taht they do not own, as long as they expect to be able to keep possession of the improvements they make. So it is not really striking, but useful to note, that Loyola University plans to “sell development rights to about three acres near its North Side lakefront campus. The school hopes to extend a 75-year ground lease to a developer that will finance the project.” (from the Chicago Tribune, March 7 “Inside Commercial Real Estate”).
Why is Loyola looking to lease rather than sell? No one says, but possibly they want an assured income stream with some sort of escalator to benefit from expected increases in land values. Or possibly they are planning to try to somehow keep the land exempt from real estate taxes. Possibly they want to tie their successors’ hands to prevent depletion of their endowment.
Or perhaps they’re thinking very long term.
