"The city council should be advocating for us," said Pasquale Presa.
Presa, who owns and operates Pasquale's Neighborhood Pizzeria on Fifth Street Southwest, a block off Broadway, has been advocating for himself — and looking for a little help from the city, county and state — when it comes to property taxes, and what those taxes are doing to his small business.
"The first three years for a business are the most important to establish your reputation, your labor force, your social media," Presa said. "If I'd have known it was this high, I might have shopped around (locations) a little."
All across Minnesota, if it's paid for though the government, there's a good chance its paid for with property taxes.
Presa pays about $50,000 annually in property taxes, though he expects that number to climb once again. That amount is on a 5,000-square-foot space he leases on the southern fringe of downtown.
"It is very challenging to open a small business and operate a small business," said Kathleen Harrington, president of the Rochester Area Chamber of Commerce. "One thing the Chamber is looking at is the total cost of running a small business in downtown Rochester, and property tax is a big, big piece of that."
Harrington said that when a community experiences growth, business and property owners should expect increased assessments for property taxes — for example, as Destination Medical Center brings growth to downtown Rochester. But when those assessments hurt small businesses, it's a detriment to the community.
"Property tax has to be discussed if we're going to keep small businesses in the downtown area thriving and successful," she said.
As one of those small business owners, Presa said it can be a struggle for someone to bring something new and different into the community and make it work while paying high property taxes.
A native of Italy who grew up in New York, Presa pointed to the innovative tax plan the City of New York created for small businesses after the Sept. 11, 2001, terrorist attack on New York. To help businesses get on their feet in a tough financial environment, he said, property taxes were phased in for new businesses to help them during their first few years.
"I'm from New York, so I understand high taxes," Presa said. "But there, you have millions of people around you (as potential customers)."
He's taken his case to state lawmakers, asking for changes in the property tax codes to change to help small businesses succeed.
Harrington said changing property tax laws at the state level can be daunting, but, "We want to say to our leaders, let's look at the need and reduce the cost of doing business."
She pointed to the fact that one-in-three jobs in Olmsted County comes from a small business, so without successful small businesses, the economy in Olmsted County — not to mention most of Minnesota — would face hard times.
"How much do we want small businesses? How much do we want to support them?" Harrington asked. "That's a community value that needs to be discussed."
That means thinking of unique solutions, such as tax abatement under certain conditions, or reducing startup fees for businesses of certain sizes.
"We have to be creative here," Harrington said. "I don't think there's a cookie cutter solution. We really want the Pasquales of the community to succeed."
In the meantime, Presa works hard to deliver the best pizzeria experience he can in Rochester in order to make ends meet.
"I'm the best restaurant in Rochester," Presa said, showing the Yelp! and TripAdvisor ratings to prove it. "But I'm paying for it."