If Rochester followed the paths of cities like Harrisburg, Pennsylvania and converted to a land-value system of taxation, there could be a rush to develop city property, says Paul Kramer.

Kramer is the owner of the Starry Nitesbuilding on University Avenue. He has been advocating a change from the current property tax system to land-value taxation for years.

"The current property tax system rewards someone who takes the risk of redeveloping a building like mine by raising my taxes through the roof," he says. "The city actually penalizes you for investing here."

Kramer owns several ARTWalk properties and says that he would spend more money on development, but the current tax system results in such high taxes that it's not worthwhile.

Land-value taxation typically levies a permanent high value on land, while new construction or improvements to an existing building receive low values. The idea was developed by political economist Henry George in the late 1800's.

Rochester's current property tax system works in reverse: each major improvement made to a building can increase property taxes.

Add to that the rising costs of materials, and improving city properties becomes unprofitable, Kramer says. And as future safety, environmental, and energy-saving codes are added, the problem worsens.

Under a land-value tax, cities discourage sprawl and promote density by encouraging developers to build higher, says Joshua Vincent, director of the Henry George Foundation of America, a think tank devoted to promoting George's economic theories. As density increases, so does city revenue.

City Council members Elaine Spaull and Lovely Warren have invited Vincent to come to Rochester in April for a presentation.