Downtown district approves new sales tax

Residents of the Downtown Springfield Community Improvement District – bounded approximately by Kimbrough Avenue on the east, Elm Street on the south, Main Avenue on the west and Mill Street on the north – voted 45-to-7 in favor of a new 1/4-cent sales tax for the district, effective July 1.

“We were very encouraged by the number of people who voted and the final tally,” said Rusty Worley, executive director of Urban Districts Alliance. “We think it’s an important tool for the continued revitalization of this area.”

The new tax comes on the heels of a fall vote extending the district for 10 years. Springfield City Council approved the extension in November.

The tax will replace the front-footage property tax on buildings in the district, which CID President Jeff Schrag said is a less fair method of assessment.

“The Heer’s building doesn’t have much front footage, but if it were an occupied building it could be worth a lot, whereas, you can have a single-story building with a lot of front footage,” said Schrag, who owns property downtown. “It wasn’t a very fair way of doing things.”

The front-footage assessment was in the original district agreement, which was scheduled to expire in December 2006, because state law at the time did not allow CIDs to assess additional sales tax.

“Sales tax is a more fair way – it captures more from the users of downtown amenities and facilities,” he said.

The money from the tax, which is estimated to generate about $100,000 annually, will go toward the CID general budget; the CID’s operating budget for fiscal 2007-2008 is expected to be about $260,000.

UDA Director Worley said the sales tax also lessens the burden on the downtown property owners.

“The feeling from the residents was that was a better funding mechanism than the front-footage assessment,” he said. “It also distributes the cost of maintaining the district beyond the property owners and to the people who use the area on a daily basis.”

Dan Scott, owner of 400 Place, a mix of retail and lofts at 400 E. Walnut St., agreed.

“The idea that just the property owners downtown foot the bill always was a little bit of a concern for me,” Scott said.

The CID budget is split between three areas of expense: parking, maintenance and image enhancement.

The fastest-growing expense is image enhancement, which is the catchall category, covering landscaping, banners and marketing. Worley said the new sales tax revenue could help to fund a planned center city marketing campaign as well as additional urban landscaping projects.