While I wouldn't underestimate the degree to which some people will go to avoid taxes on principle I do agree that it seems a bit farfetched to intentionally fail your business to avoid paying some tax.

I can definitely see a situation where the owner prefers to have some storefronts vacant rather than lowering the rents because they aren't sure lowering the rents would actually fill the storefronts and it might cause the other tenants to demand lower rents. Plus it might attract the wrong sort of business.