At its June 1 meeting, Springfield City Council considered the creation of a Commercial Street community improvement district - an idea that brought impassioned discussion from area residents and business owners on both sides.
The district, according to city Economic Development Director Mary Lilly Smith, would allow retail businesses in the Commercial Street boundaries to charge an additional K-cent sales tax. Revenue from that 10-year tax proposal - estimated to be about $200,000 during the first five years - would then go back to the district to fund maintenance and safety projects.
More than half of the property owners in the area had to sign a petition to create the CID, per state law, and those signatures must represent more than half of the district's total assessed property value. Smith said 53 of the 99 property owners signed the petition; those signatures represent 63 percent of the district's $3.8 million total assessed value, Smith said.
The proposed CID essentially comprises Commercial Street and a block south between Douglas and Clay avenues.
Fourteen district residents and property owners voiced varying opinions during the public hearing.
Urban Districts Alliance Director Rusty Worley said CIDs provide funding for essential services; he cited the success of similar districts in the center city area.
"CIDs are an important and common economic tool to help businesses provide supplemental services to keep their area clean, safe and friendly," Worley told council. "With the current strain on city finances, these districts are needed now more than ever."
He also said the tax is minimal; on a $10 purchase, for example, the extra cost would be a nickel.
Commercial Street business owner Shawn Askinosie of Askinosie Chocolate had a different view. He said that while he initially signed the petition supporting the district, he changed his mind and asked to remove his name when he saw continued economic deterioration.
"I think the CID is a good idea, but I think it's a bad idea now. In this economy, it sends the wrong message," he said. "Whether you agree that these taxes add up, or whether it's a nominal amount, it sends the wrong message that the council says it's going to tax you."
CID No. 2
Council also considered the creation of a 50-year CID for The Shoppes at James River, a planned Rankin Co. development on East Republic Road.
Plans for 15 acres near the renovated interchange of James River Freeway and Glenstone Avenue comprise a hotel and several restaurants and retailers; Houlihan's restaurant has signed on as an anchor tenant.
Smith said the proposed CID would allow the businesses in the district to charge an additional 1-cent sales tax to reimburse the developer for initial storm-water improvements and other infrastructure, an expected $2.5 million cost. The tax would be reduced to K-cent once the reimbursements are complete, to fund maintenance efforts at the project.
Councilman Nick Ibarra expressed concern for customers who may not realize they are paying extra sales taxes. He wondered if there was a more transparent way for developers to fund infrastructure improvements.
"If a business wanted to make a donation to have work done - streetscapes, infrastructure, whatever it is in that area - could a private business give the city money and ask them to do particular work (for their development)?" Ibarra asked during the meeting.
Smith responded that the city does engage in development agreements where property owners help fund such improvements, though CIDs offer the added incentive for developers of potential reimbursement.
Council could vote on both community improvement districts at its June 15 meeting.
City budget
Springfield City Council tabled the 2009-10 budget indicating an uneasiness about the current proposal. The budget is one of the first significant orders of business for the current council, which was assembled in April.
The proposed $273.7 million budget includes $71.4 million in general revenue spending, down 3 percent from the current budget. City staff had to cut $5.7 million from the budget because sales tax revenue is expected to remain flat compared to the lackluster numbers of this year.
Most of those cuts were covered by a hiring freeze in place since January that left 90 city jobs unfilled, along with the elimination of pay increases and cuts to general fund transfers to the parks, health and transportation departments.
Councilman Bob Stephens, who moved to table the bill, said council was "simply not ready" to pass the budget without further discussion. Council scheduled workshops for June 2, 5 and 8 to discuss the potential for additional adjustments to the budget, which must be passed before the end of June.
This installment of Springfield Business Journal’s Architects & Engineers Project Report showcases 26 endeavors by area design and engineering professionals.
