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Downtown BID gets Council endorsement at 7 cent rate -- for now

The City Council last night voted on the business improvement district (BID) that's been proposed for the city's center.

The vote noted a somewhat unusual division on Council, as the agreeable seven remained cordial and agreeable -- except for the final vote, which fell out 4-3 in favor of a substitute motion by Councilwoman Diane Catotti for a 7 cent per $100 of property valuation rate.

The divided vote shouldn't be read as hesitant support for the BID; despite the marshaling of opponents by leaders that included notably Measurement Inc.'s Hank Scherich, all seven members of Council seemed to favor a business improvement district. The only variance? How much additional taxation downtown property owners should face.

But the 3.5 cent and 7 cent recommendations are just that -- non-binding recommendations for an eventual rate, given the July 2012 start date for the initiative. And while Council could act before next summer on the matter, there seems to be a good chance that a final decision really won't end up being known until after this fall's at-large Council election, for which Catotti has announced she will not stand for re-election.

Mayor Bell proposed his previously-discussed 3.5 cent compromise rate and got a quick second on the item before Catotti proposed the original 7 cent rate.

Ultimately, the Council was proposing to provide the same augmented funding to downtown through the auspices of a somewhat-reconstituted Downtown Durham Inc., but the two different rates would impact the source of funds.

Bell raised a number of concerns that he said led him to the lower rate, which would require a six-figure find of alternative funding by the city manager and administration. The mayor noted that all of Durham shares in the benefits of a revitalized downtown and that it was fair for the community writ large to pick up the aesthetic improvement and economic development costs of the BID. And he argued that with city and county government two major propertyholders downtown that didn't pay property taxes, it seemed only fair for general funds to pick up some of the tab.

Still, Catotti's argument held sway with fellow Council members Eugene Brown and Mike Woodard -- along with Howard Clement, who's more typically seen voting with Bell and Cole-McFadden when there's a divided dais. Farad Ali, who like Bell and Brown faces re-election this fall, supported the mayor's initiaitve.

Yet all this might just be up for some change down the line, with the reminder that property tax rates can't be encumbered by one Council onto a future body.

With a July 1, 2012 start date, the BID won't take effect until the FY 2013 City budget -- and typically, the decision on tax levels are set in May or June just before the start of the new fiscal year.

Legally, Bell noted, the current Council couldn't set a property tax rate for FY 2013, even for the BID, at all right now; tonight's vote on a rate was just a non-binding recommendation for a starting point for the city manager's proposal.

Technically, it seems, Council could vote on a fixed rate for the BID anytime after this July 1, but Bell noted that would break with the traditional timing of Council votes on taxes.

Holding to that conventional timing would mean a spring 2012 vote on the tax rate -- a vote, that is, after this fall's election.

Technically, two seats on either side of tonight's vote are up for re-election, though the mayor's seat seems perennially safe given his inability to muster a credible opponent since Thomas Stith's run in 2007.

It's too early to know how Ali or Brown would fare in a re-election, or to know how many other candidates besides the two of them and Independent Weekly publisher Steve Schewel will throw their hats in the ring.

(And it's hard to imagine Schewel, like Catotti a progressive/PA wing stalwart, reaching a much different conclusion that the incumbent.)

Still, the prospect of an election between now and an ultimately binding vote on the matter is intriguing, to say the least. 

Particularly if the purely-speculative entry of DDI's Bill Kalkhof into a Council race were to happen, of course.

And while DDI notes that about property owners representing more than 75% of the downtown tax base supported the measure, one has to wonder whether opponents like Scherich will find this sufficiently umbrage-worthy to throw extra dollars into this fall's Council race, to boot.

Comments

Rob Gillespie

"And he [Mayor Bell] argued that with city and county government two major property holders downtown that didn't pay property taxes, it seemed only fair for general funds to pick up some of the tab."

Yes, Mr. Bell is correct in the fact that the city and county do not pay property taxes. The city will, however, pay almost half of the total cost of the BID under the 7-cent proposal. This comes in the form of the approximately $150,000 a year that already goes to DDI, with an added increase of $250,000 a year under the BID proposal. Under Mayor Bell's 3.5 cent proposal, more than 3/4 of the BID's funding will come from the city. This seems awfully disproportionate in a revenue environment that leaves us unable to pay for traffic calming and street lights.

I support the BID at 7 cents. At 3.5 cents, the BID pleases no one. It doesn't placate Scherich or Sanford, who are against any kind of tax increase, and it harms neighborhoods by taking additional revenue from the city's general fund.

Thank You, Councilmembers Woodard, Cattoti, Brown, and Clement, for voting yes on the 7-cent BID. The BID is essential to see downtown grow and prosper, and it is only right that downtown property owners pay half the cost.

Matt Drew

It was very disappointing to see the divide framed around a largely irrelevant disagreement about how the taxes were going to be raised. This tax hike will put tax rates in Durham easily into the top 10 state-wide, and no amount of marketing money is going to change that.

Further, neither proposal addresses the problem of accountability. The City is now planning to hand nearly a million dollars to an unelected, unappointed pseudo-private organization to do with as they wish. There are no metrics to measure the success of the BID, no oversight, and now no sunset clause. How is the City Council supposed to know if the BID is successful, let alone the citizens? I'm quite frankly shocked to see progressives supporting such privatization, even while I'm opposing it from the other side.

Rob

This isn't really the article relevant to this comment but DDI if you are listening-

Please, please, please! no "downtown ambassadors"

I can think of nothing more dorky and "un-durham" than one of these

http://www.wilmingtondowntown.com/_files/images/group.jpg


or worse!!!

http://cityoforlando.net/thecitybeautiful/images/downtownambassador.jpg

AHHHHHH!!!!!

Seriously as a 30+ year resident of Durham if I'm ever asked by an "ambassador" if I need help/direction I'm moving away.

Tar Heelz

They have them in Raleigh. They drive around on bikes with purple uniforms.

In 8 years of working in Downtown Raleigh, I rarely go a day without seeing at least one. Over that same period, I have never seen one of these people actually (i) help, or even (ii) interact with anyone.

Geoff

One of the Mayor's arguments for his "compromise" was that the BID has what he called "tiers": all property owners pay the same, but the crews don't clean or walk each part of the district with the same frequency.

He said that the BIDs in Raleigh and Greensboro don't work that way; all parts of their districts receive the same amount of service.

That is not true. RAL and GSO have the same "tiered" approach that Durham's BID will have.

The crews will also have the flexibility to triage problems across the district and will pay extra attention to a portion of the district if situations or events warrant it.

Frank Hyman

Glad to see the 7 cent option in place.

With staff time invested in setting this up, there will be some momentum to keep it in place even with a new city council.

Also could be a good issue for the coming election:

A well-funded, successful city and downtown vs. a libertarian dystopia of low taxes, scant services and "might makes right" private sector feudalism. Hmmm. Which will the people choose?

GreenLantern

"A well-funded, successful city and downtown vs. a libertarian dystopia of low taxes, scant services and "might makes right" private sector feudalism. Hmmm. Which will the people choose?"

Kinda snarky, huh? This isn't about libertarian free market, unless you want to contrast it with your feel good liberal tax and spend of other people's money (on things that MOST people don't want, like "downtown ambassadors"). I literally get the image of a bunch of dork-bots running around town in their Segways, presumably because they would be too overweight and unhealthy to be on foot--if that were to present the city with a workplace liability issue. Well, not an original vision, but thanks for photos, Rob!

You think just because you and other semi-famous Durham bloggers drop your name in front of every city/county proposal to raise taxes, and fix every problem with other peoples' money, using methods that don't work or are inefficient just because some other town council was bamboozled into supporting a BID tax, that the rest of us should just go along quietly, letting the very wise progressives make these decisions that are obviously too complicated to explain to the masses? (Sorry for the length, take a breath.) I just can't get over Frank's arrogance and self-importance, thus the rant.

Beyond city maintenance just taking care of the downtown sidewalk and paver improvements recently installed, individual property owners can decide to pick up trash, sweep their entrances (Gary has some excellent photos of people doing just that on their own during the old days), and advertise their own businesses at their expense. Government and liberal do-gooders don't need to pop up to the rescue of lazy property owners or lost visitors who left their GPS at home, taxing and spending to create and support a few nonessential government workers through retirement. If owners can't take care of their property and their right-of-way, then FINE them, or set up a minimum code to enforce.

Downtown is plenty successful right now, and it is due to INDIVIDUAL vision, hard work, and investment, to fill a market need. We've already "invested" plenty of tax dollars already in making the streets look good and to erect some new government buildings in strategic locations. All we need to do now is keep taxes low, parking free, and keep the criminals and panhandlers out of downtown. The rest will take care of itself in due time.

clif

funny FrankH uses 'feudal' as this reminds me of a medieval church taking pilgrims money for a select 'anointed' clergy while away from the magistrates villa the squalor and neglect is blamed on the listless masses.

Erik Landfried

GL, your last paragraph is one for the ages. A complete revisionist history on how downtown came back to life (the real history shows a lot of collective action and public-private partnerships). A plea for government to continue subsidizing free parking instead of charging market rate for them (kind of goes against everything else you've ever written on this site, no?). AND the brilliant notion that we should keep criminals and panhandlers out of downtown (near downtown would be just fine though).

You have outdone yourself.

Michael Bacon

That's right! The Durham metro area is what it is today because of individual, private enterprise exclusively. I mean, exclusively, except for three universities that receive billions in state and federal government support and research grants, a state designed industrial park, national facilities for two huge federal agencies, a handful of state-founded non-profits dedicated to research and development, and a confluence of two state and federally funded interstates and three US highways. *facepalm*

GreenLantern

I should have just said, "free on-street parking". Of course the parking decks are good public investments, and they should charge a market rate. I am talking about downtown, not the entire region. A false analogy to compare Durham as the beneficiary of state and federal dollars when all other cities get these to a great degree.

Leave it to Erik and Michael to hyperbolize without reading through the entire context of someone's post. I'm not surprised. It's part of arguing with a group of Durhamites who think they are part of some city homeowner's association, defining the issues, providing the solutions, and determining who wins and loses, who pays and who gets a free ride. Back to the subject at hand, the BID tax...Have you ever given any thought to how high taxes are already in this town, and as someone else explained, how raising another tax will just push Durham into another top ten list that will make us all suffer.

Frank Hyman

For 27 years I've listened to conservatives and libertarians in Durham wail that our high taxes would keep people and businesses from moving here.

Sorry, but I prefer to live in a reality based world.

Durham's population has easily doubled in the time i've lived here with our highest tax rates in the Triangle and the state (among cities).

Denmark has the highest tax rates in the Western world and yet also has the greatest degree of happiness among western countries, because parents don't have to worry about their kids' (or their parents') healthcare, education or general well-being.

Get. A. Clue.

clif

@Frank: your argument is incoherent, weak and the conclusion trite.

If you want trash picked up downtown, start a volunteer group.

Kevin Davis

@Clif -- Taking the macroeconomic away, I'm puzzled by how a downtown BID that enjoys the support of property owners representing 75-80% of downtown landowners (by value) isn't essentially a volunteer effort. Volunteering themselves to pay the higher taxes, that is.

The thing with a purely volunteer effort is there are free riders. If one property owner on Main St. didn't want to pay for clean-up services, should they get the clean-up for free? Should the "volunteer" clean-up skip their property?

I think the analogy to the Southpoints of the world is a good one. Southpoint and its ilk appear "friendly and attractive" because a part of their tenants' rents go to paying for common area services. Same with RTP. But in downtowns, you have no way of doing this -- thus, the BID.

It's not like this is some hair-brained scheme invented in Durham. These are used in downtowns across the country... conservative towns, liberal towns, northeast, southeast, you name it. I'm not sure we need to put the lens of economic policy on this to accept the idea.

To the latter point Matt Drew makes above, I am surprised there has been less discussion of governance... that, to me, is the big bugaboo for any program like this. I would have liked to have seen a fuller debate there.

But worrying about our tax rates? A red herring to me. I've lived in plenty of Florida cities where retirees froth at the mouth every time you want to raise taxes. And Florida's gotten its comeuppance -- lousy roads, failed schools, and the inability to attract the IBMs and EMCs and Glaxos of the world to open anything more than distribution centers. When the new-era economic leaders and bio-tech and universities tell us the tax rates are unsustainable, I'll worry then.

But there's a reason I, and many others, leave low-tax hellholes like Orlando. Too bad when some come here and the first thing they want to do is to change the taxes, local schools, etc. to make things "just like home."

clif

perhaps the few who oppose could be given exemptions in return for some 'pledge' (i use the term loosely) to maintain their grounds. perhaps a map placed on a easement indicating 'you are here' and directions to nearby attractions and an advertisement for the business who are 'unaffiliated' supporters of the BID initiative. they could join at some time if they choose?

i'm not sure disqualifying the 'macro' is so facile. thanks for the thoughtful response.

Kevin Davis

@Clif: I hear the spirit of what you're saying here... I'd just go to note that it doesn't help with the free rider problem. If you decide not to participate and let your property junk itself up to full-stop nasty, your property values still rise as a more attractive, better developed neighborhood raises all boats

To that end, take a look at the Bill Fields-owned Medical Arts Bldg. on Gregson St. or the Diane Sturdivant-owned "Urban Merchant Center" on W. Chapel Hill St. -- the latter of which was definitively pulled out of the BID after the widow objected. Those properties today don't contribute to the sense of an improved, revitalized downtown. If they were in the BID zone, I don't think it'd be fair to give them a pass on paying when they reap the benefit of a more attractive district?

The bottom line, though, to me is that government isn't about facilitating compromises and opt-ins and giving people choices. Government at every level is about doing what elected officials think best, subject to the constraints of governance documents like state charters and constitutions, and subject perennially to recall. If the citizens don't like the BID or other efforts, the "thrown the bums out" approach is our due recourse. Thus my mention earlier that I am sure you are going to see Hank Scherich paying more attention to the city council elections this fall, btw...

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