With high rents for premises and a clientele becoming ever more frugal, traditional shops in Esch are disappearing. As the municipal council struggles to find successors to take over empty storefronts, authorities have developed an unusual strategy to breathe new life into the main shopping precinct: a vacancy tax. Esch plans to use the tax to encourage reticent property owners to put their premises on the market.
The proposal primarily targets ground-floor business premises on Rue de l’Alzette, where 21 of the 115 properties stand empty. However, DP alderman Pim Knaff says just two of these cases have been uncooperative so far.
The tax is planned to reach around 20% of average rents in the street for the first year, rising to 50% in the second year.
Esch authorities have submitted the proposal to the interior ministry. The municipality has to prove that the vacancies are damaging to the city. CSV mayor Christian Weis says he is optimistic that the proposal will be successful in its second attempt. On one hand, the financial measures to stimulate commerce amount to 2.5 million euros per year, but the negative headlines are harming the city’s attractiveness.
However, Knaff says the vacancies should be put into perspective. Most owners are willing to rent out their vacant premises, and around 10 properties are currently being renovated to become compliant.
In addition, Esch municipal council has implemented measures to revitalise local businesses, with six-week pop up shops offered to new stores. The council has also set up a commercial rent management system in which the municipality takes over part of the rent as an intermediary for three years, offering a lower price to business owners.
RTL spoke to several business owners who wished to remain anonymous, but expressed that high rents are not the only issue afflicting the city. Customers say they don’t feel safe, or parking is too expensive. In addition, shops are suffering both from online competition and the newer shopping centre in Belval.
Vacancy tax is therefore no miracle solution, the city council acknowledges. The municipality is seeking consultations on how to breathe new life into the main shopping thoroughfare on Rue de l’Alzette, with options to construct new buildings. More details will be decided over the coming months.
Report in Luxembourgish:
