Steering committee figures boundaries, services, tax rate of downtown Cape taxing district
Tuesday, April 12, 2011
Business leaders in downtown Cape Girardeau hope a new taxing district will provide the funds needed to make downtown a destination.
Members of the Community Improvement District Steering Committee have now determined the boundaries of the proposed district, the services they want to see in downtown and the tax rates it will take to bring in the revenue to pay for them.
The creation of a Community Improvement District was a goal of the Downtown Strategic Plan created through the DREAM Initiative, said Jim Maurer, steering committee chairman.
"We're meeting now with property owners to make sure they're on board," Maurer said. "They're the ones who will be paying for it, and they're also going to be getting the benefits."
A Special Business District already exists in the riverfront area, where businesses are assessed an additional property tax generating about $20,000 annually. The existing Special Business District includes Spanish, Main and Water streets, from Merriwether Street north to Bellevue Street. For the nearly 30 years the district has been in place, the funds have been used to maintain decorative lighting, purchase benches and planters, and improve parking lots.
The district and its operating entity would dissolve when the CID starts.
The CID would include the same area but expand the boundaries to take in Broadway from West End Boulevard to the riverfront; Sprigg Street from one block south of Highway 74 to Park Street; and portions of Morgan Oak and Good Hope streets.
Under the CID proposal, businesses in the area would pay an additional half-cent sales tax. Property owners would pay additional property tax of 67.63 cents per $100 assessed valuation.
The funds would be spent in four categories. Half of the estimated $280,000 raised annually will go toward keeping up downtown streets. That includes picking up litter, landscaping and other streetscape improvements.
With the city about to spend $1 million on amenities for the redesign of Broadway, Maurer said, providing the funds to maintain the upgrades is a key function of the CID.
"We are going to enhance what the city provides. We can't expect the city to do more in services downtown than they do in the rest of the city," Maurer said. "If we want more services, just like they did 30 years ago, we are going to need to provide a means to pay for that."
Other services provided by CID funds are increased security, 20 percent; marketing and special event planning, 20 percent; and professional services for reports and audits, 10 percent.
For the committee's plans to be put into place, a petition must be signed by more than 50 percent of the property owners. The signatures must also represent more than 50 percent of the district's total assessed value.
"We're hoping to get more than that, but we know we have to have that much," Maurer said.
The CID boundaries enclose about 400 parcels of property with 310 property owners.
The committee plans to present its petition to the city council in July, he said. Once the council has approved the petition, a seven-member board of directors for the district will be appointed. Before a tax can take effect, it must be voted on by the residents of the district.
Once tax revenue is collected, the CID board would then contract out for the services it wants in downtown.
Old Town Cape Inc. is the "perfect organization" to oversee the spending of the funds generated by the CID, Maurer said.
"They are already attempting to do some of these now, without any funds. They may have to add staff in the future, but they have the ability to oversee these services," he said.
Old Town Cape executive director Marla Mills agreed her organization and the CID are a good match.
"This will be a way to accomplish a lot of what we know needs to be done, but we don't have the resources to do it," Mills said. "Everything they want to do, we already do on a smaller scale or have been involved with in the past."
The CID committee has identified the 30 people with the most property in the district and are now meeting with them one on one about the CID proposal. This summer, group meetings will be held to talk to more businesses and property owners.
"We're getting a favorable response," Maurer said. "A tax is a tax, and it's a concern, but we feel like we have a great opportunity now to take downtown to the next level."
Casino not included
At the time the CID steering committee began to meet, early last year, the concept of a casino in Cape Girardeau didn't seem likely with all 13 of Missouri's casino licenses taken.
The Isle of Capri Casino site is not included in the proposed CID boundaries. Under its development agreement with the city, instead, it will pay the CID sales tax rate, up to 1 cent, into the city's Riverfront Region Economic Development Fund, said Heather Brooks, assistant city manager.
Isle will also be contributing 0.3 percent of its gross gaming revenue, estimated to be about $250,000, into this Riverfront Fund. The city is required to match what Isle contributes, Brooks said, for an estimated total of $500,000. At least 70 percent of those funds must be spent on capital improvements, per Isle's development agreement.
"The casino will help provide capital improvements, but you've got to have the ongoing maintenance," Maurer said.
This has been the biggest challenge for the already established Special Business District, said Kent Zickfield, board member. Zickfield is also chairman of the Downtown Redevelopment Corp., the entity that oversees how the Special Business District taxes are spent. It's tax revenue, by law, can only be spent on capital improvements.
"They can buy trash cans but can't pay someone to empty them," Brooks said.
Now, much of the Special Business District's revenue is spent on replacing and repairing the decorative light poles along Main Street. In the past, the tax helped fund the clock at Themis and Main streets, planters and benches, and parking lot improvements at the intersections of Main and Independence streets and Main Street and Broadway.
"We have been able to accomplish a lot. I think that's one of the reasons people are feeling positively about the CID," said Zickfield, who is a member of the CID steering committee. "They've seen what we've been able to do with limited funds and the restrictions we've had. If you expand that, it gives you the opportunity to do a lot of great things."
418 Broadway, Cape Girardeau, MO