Business Improvement District

Below is a summary of the provenance and development of the Asheville Business Improvement District proposal, or BID.


LEGAL AUTHORITY


NC Constitution
Article V, Section 2
(4) Special tax areas

http://www.ncleg.net/Legislation/constitution/article5.html

“…the General Assembly may enact general laws authorizing the governing body of any county, city, or town to define territorial areas and to levy taxes within those areas, in addition to those levied throughout the county, city, or town, in order to finance, provide, or maintain services, facilities, and functions in addition to or to a greater extent than those financed, provided, or maintained for the entire county, city, or town.”


North Carolina General Statute
Chapter 160A, Article 23
Municipal Service Districts

http://www.ncga.state.nc.us/EnactedLegislation/Statutes/PDF/ByArticle/Chapter_160A/Article_23.pdf

§ 160A-536. Purposes for which districts may be established.

“The city council of any city may define any number of service districts in order to finance, provide, or maintain for…Any service, facility, or function which the municipality may by law provide.”

§ 160A-540. Required provision or maintenance of services.

“(a) New District. – When a city defines a new service district, IT shall provide, maintain, or let contracts for the services for which the residents of the district are being taxed.” [emphasis added]

§ 160A-542. Taxes authorized; rate limitation.

“A city may levy property taxes within defined service districts in addition to those levied throughout the city, in order to finance, provide or maintain for the district services provided therein in addition to or to a greater extent than those financed, provided or maintained for the entire city. In addition, a city may allocate to a service district any other revenues whose use is not otherwise restricted by law.”


ORGANIZATIONAL DEVELOPMENT


Asheville City Council > Asheville Downtown Master Plan Advisory Committee

Goody and Clancy Consultants
To: Asheville Downtown Master Plan Advisory Committee
Subject: DRAFT detailed recommendations on establishing a downtown management entity for Asheville
January 12, 2009

The Asheville Downtown Management Entity

A New Entity is Needed
“Asheville needs to join the ranks of healthy downtowns in North Carolina and around the country that have strong, professionally staffed downtown management entities. The leadership seeds for it may well be within the Advisory Committee that has guided the plan.” -From the Downtown Master Plan Appendices


Asheville City Council > Asheville Downtown Commission

Downtown Master Plan
May 12, 2009

“In 2007, the Asheville City Council authorized and funded the development of a Master Plan for Downtown Asheville. During the fall and winter of 2007-8, city staff and the Downtown Commission went through an RFQ selection process and selected Goody Clancy of Boston to create the master plan. Goody Clancy began work in Asheville in April 2008 and a series of public input meetings were held in 2008 with the final public input meeting being held in January 2009. The final plan was brought to City Council in May 2009, and was adopted.”

Page 102
ACTION STEPS: NEAR-TERM

“A. Establish a Downtown management entity — termed here a ‘CID’ or Community Improvement District — to actively oversee and maintain Downtown’s many moving parts. The CID should be collectively conceived and led by Downtown merchants, property owners, employers, and residents to serve their unique mutual interests as efficiently as possible…It should ideally be self-funded to maximize the Downtown community’s discretion in directing their resources. The CID should coordinate closely with the City, supplementing municipal services and championing Downtown.”

Page 103
“2. Draft legislation for City Council approval authorizing establishment of the CID as designed by the pursuit group.”


Asheville City Council > Asheville Downtown Commission > Downtown Management Subcommittee
Regular Meeting
May 13, 2011

Downtown Master Plan Implementation

“They have discovered that not only would the BID include a tax in that district on property, but is it also on personal and business property.”


Asheville City Council > Asheville Downtown Commission > Downtown Management Subcommittee
Regular Meeting
June 10, 2011

Downtown Master Plan Implementation

“Chairman Butner said they have gone public with the plans for Strategy 7, which he explained was the self-imposed taxing district which allows for services above and beyond base-line City services for downtown. They are discussing this with downtown property owners.”


Asheville City Council > Asheville Downtown Commission > Downtown Management Subcommittee
Regular Meeting
July 8, 2011

Downtown Master Plan Implementation

“Mr. Butner said they are putting together a group that will start looking at specifically outlining the district, e.g., sample budget, scope and nature of the services offered, etc.”


Asheville City Council > Asheville Downtown Commission > Downtown Management Subcommittee
Regular Meeting
September 9, 2011

Downtown Master Plan Implementation

“Ms. Vrtunski said that the study by Western Carolina is being finalized. They have met with property owners and will be making presentations to the Downtown Area Residents Neighborhood (DARN), etc.”


Asheville City Council > Asheville Downtown Commission > Downtown Management Subcommittee
Regular Meeting
November 11, 2011

Downtown Master Plan Implementation

“Ms. Sasha Vrtunski, Downtown Master Plan Project Manager, said they have holding education/feedback meetings with residents regarding the Business Improvement District (BID).”


Asheville City Council > Asheville Downtown Commission
Regular Meeting
December 9, 2011

Presentation: Economic Benefit Study of a Business Improvement District in Downtown Asheville

“Ms. Sasha Vrtunski, Downtown Master Plan Project Manager, said that with the support of the Asheville Downtown Association, City of Asheville and Buncombe County, the Downtown Management Committee commissioned a study to examine the potential economic benefits of implementing a Business Improvement District.”

Dr. Steve Ha: “Business improvement districts are usually governed by the city but managed by a private, non-profit organization that is subject to an advisory board or board of directors made up of stakeholders.”


Asheville City Council > Asheville Downtown Commission
(Noted in City Council minutes June 26, 2012, page 10)

“In December 2011, an Interim Board was formed as the Management Committee recognized that it did not have enough property owners to finalize a plan.”


Asheville City Council > Asheville Downtown Commission > Downtown Management Subcommittee
Regular Meeting
December 14, 2011

“Ms. Vrtunski updated the Commission on their meetings on the Business Improvement District, noting some concerns by residents who have high value condos. Some residents feel they are paying in, but the benefits are all for the businesses.”


Asheville City Council > Asheville Downtown Commission

An Economic Benefit Study to Establish an Asheville Downtown Business Improvement District
Submitted by Inhyuck “Steve” Ha, Ph.D.
Associate Professor of Economics
MBA Program Director
Western Carolina University
December 14, 2011

“Business improvement districts are usually governed by the city but managed by a private, non-profit organization that is subject to an advisory board or board of directors made up of stakeholders. The municipal government typically collects the revenue and remits to the BID. Advisory and administrative boards are primarily made up of businesspeople and landowners, with some seats reserved for public officials, residents, community board members, and non-profit representatives.”


Asheville City Council > Asheville Downtown Commission > Downtown Management Subcommittee
Regular Meeting
February 10, 2012

Downtown Master Plan Implementation

“Downtown Master Plan Project Manager Sasha Vrtunski updated the Commission on their work on the Business Improvement District, which is progressing through the process. At the February 14 Council meeting, Council will consider a resolution directing staff to prepare a report regarding a Municipal Service District for downtown, which is required by State Statute. Mr. Butner noted that by the next Commission meeting there will be a firm plan to present to the community.”


Asheville City Council > Asheville Downtown Commission
Regular Meeting
March 9, 2012

Downtown Master Plan Implementation

“The Interim Board determined that the entire Central Business District should be included in the MSD. Suggestions of the MSD services, above and beyond what the City is doing, is power-washing sidewalks on a regular basis, litter and trash pick-up with a broom and pan, a graffiti removal program, snow removal on the sidewalks, and an ambassador program (paid staff for eyes on the street looking to help people and alert police to potential problem situations). The second component of the services would be an advocacy component.”


Asheville City Council
Worksession

March 27, 2012

General Fund Operating Budget

“Several comments/questions were raised by Council, some being, but are not limited to:…question of whether the Business Improvement District contribution will be needed in the first year.”


Asheville City Council > Asheville Downtown Commission >
Business Improvement District Subcommittee

Downtown Asheville Business Improvement District Formation Report
May 10, 2012

“Chapter 7 of the Downtown Master Plan recommended creating a Downtown Management Entity to manage and coordinate downtown services, and augment city services to keep ‘downtown clean, green and safe, 24 hours a day, 7 days a week.’ The Downtown Management Committee and an Interim Board have worked over the past 2 years to bring a proposal to City Council.”

“This report outlines the services, budget, and governance for a proposed business improvement district (BID) in downtown Asheville. It is the result of research by the Downtown Management committee and Interim Board, interviews with property owners, and a survey distributed to businesses and property owners in the district.”

Attachment B – Article 23, Municipal Service Districts
Attachment C – Survey Results
Attachment D – Economic Benefit Study


Asheville City Council > Asheville Downtown Commission
Regular Meeting
May 11, 2012

Resolution of Support for Business Improvement District in Downtown Asheville

“Ms. Sasha Vrtunski, Downtown Master Plan Project Manager, updated the Commissioners on the Business Improvement District (BID) in downtown Asheville. She said the BID came from the Downtown Master Plan and the Downtown Master Plan came from the Downtown Commission. She felt it was appropriate to bring this back to the Commission for their support.”

“The Interim Board recommends…ask the City contribute $50,000 to the BID, along with some in-kind contributions, such as office space.”

“Ms. Vrtunski explained when there is a special tax district in Buncombe County, that tax district gets a piece of the sales tax money (beginning in the 2nd year). Because it’s based on ad valorem value, the BID would receive approximately $130,000 from the County from the sales tax”


Asheville City Council
Community Meeting (Central Asheville)

May 29, 2012

“Director of Planning & Development Judy Daniel provided a brief update on the following:…consideration of a Business Improvement District”

“Mayor Bellamy then opened up the meeting for questions. Questions/comments responded to consisted of…opposition to Business Improvement District; support of Business Improvement District.”


Asheville City Council
Public Hearing

June 12, 2012 (continued: Sep 25)
http://www.ashevillenc.gov/Portals/0/city-documents/cityclerk/mayor_and_citycouncil/minutes/mmtwelve/m120612.pdf

PUBLIC HEARING TO CONSIDER A MUNICIPAL SERVICE DISTRICT FOR DOWNTOWN ASHEVILLE

“Project Manager for the Asheville Downtown Master Plan Sasha Vrtunski said that this is the consideration of a resolution creating a downtown Municipal Service District, also known as a Business Improvement District (BID), in downtown Asheville. This public hearing was advertised on June 1, 2012. She said that the Downtown Master Plan, adopted by City Council in June 2009, strongly recommended a downtown management entity for Downtown Asheville. A subcommittee was formed by the Downtown Commission to explore this idea, and began meeting in December 2009. The Management committee worked for two years exploring a district for downtown Asheville. This included a needs survey, an Economic Benefits Study (which also included a business survey), a public forum at the Civic Center, and a series of seven meetings with business and property owners.”

Continued to September 25, 2012


Asheville City Council
Public Hearing

September 25, 2012

PUBLIC HEARING TO CONSIDER A MUNICIPAL SERVICE DISTRICT FOR DOWNTOWN ASHEVILLE

Continued to October 2, 2012


Revised BID Proposal
Downtown Asheville BID Interim Board
September 28, 2012
http://www.ashevilledowntown.org/images/boardreportandappendix1.pdf

The new BID proposal shortens the district’s boundary, excluding the part of the Central Business District east of Charlotte Street. A proposed “ambassador” program, with uniformed volunteers assisting visitors and deterring “undesirable behavior,” will be delayed until the second year of the BID, with its approval contingent upon review by a special committee open to community members. Instead, the BID will initially focus on street cleaning, snow removal, landscaping, graffiti removal and other clean-up services. -David Forbes, “Revised BID proposal,” Mountain Xpress, 10/3/2012


Asheville City Council
Public Hearing

October 2, 2012

PUBLIC HEARING TO CONSIDER A MUNICIPAL SERVICE DISTRICT FOR DOWNTOWN ASHEVILLE

Continued to October 9, 2012


Asheville City Council
Public Hearing

October 9, 2012

C. CONTINUANCE OF PUBLIC HEARING TO CONSIDER A MUNICIPAL SERVICE DISTRICT FOR DOWNTOWN ASHEVILLE

RESOLUTION NO. 12-231 – RESOLUTION CREATING A DOWNTOWN MUNICIPAL SERVICE DISTRICT, ALSO KNOWN AS A BUSINESS IMPROVEMENT DISTRICT, IN DOWNTOWN ASHEVILLE

Motion: Manheimer, Pelly second.
Passed 5-2. Bothwell, Bellay dissenting.

[NOTE: N.C.G.S. 160A-537(c) “In addition, [the proposal] shall be mailed at least four weeks before the date of the hearing by any class of U.S. mail which is fully prepaid to the owners as shown by the county tax records as of the preceding January 1 (and at the address shown thereon) of all property located within the proposed district.”]


Business Improvement District Organization
Board of Directors

Organized under IRC Chapter 501(c)(6)
Three year renewable term

Voting Members:
3 Major Property Owners ($3M+)
2 Large Property Owners ($1.5-3M)
2 Small Property Owners (under $1.5M)
2 Retail/Restaurant Owners
2 Residents
1 Office
1 At-Large

Non-Voting Members:
1 City Manager
1 County Manager
1 Asheville Downtown Association
1 Asheville Downtown Commission

[NOTE: The revised proposal now calls for 19 board members with a voting member from Asheville City Council.]


Outside Service Provider Agencies
Request for Proposals

The BID board would enter into contracts with private entities to fulfill service requirements outlined in the BID charter; to include: “regular sweeping/washing of sidewalks, litter/trash pick-up, graffiti removal, snow removal, landscaping & amenities maintenance, and ambassador program.”


REVENUE SOURCES


City of Asheville
Annual district-wide property tax assessment

Downtown Asheville Business Improvement District Formation Report, Attachment D – Economic Benefit Study, Page viii

“If the BID tax rate is $.10 per $100, then estimated tax revenue for the BID is $637,411.69. If personal properties are included, the estimated tax revenue for the BID is $795,438.05…we can expect at least two percentage points positive in property values annually for the next several years with the implementation of the BID.”

[NOTE: In the revised proposal, the initial budget would be scaled back from $750,000-$800,000 a year to $537,825, but would increase to $705,894 in the second year if the ambassador program is added.]


Asheville Finance Committee
Finance Committee Meeting
March 20, 2012
http://www.ci.asheville.nc.us/Portals/0/city-documents/finance/Minutes%203202012.pdf

4. Downtown Business Improvement District Committee Presentation

“The cost to property owners is seven cents per one hundred dollars worth of property. This tax assessment would bring in about five hundred thousand dollars a year. The total program budget is eight hundred thousand dollars and taxes would bring in five hundred thousand dollars which leaves a three hundred thousand dollar shortfall. The District Committee is looking to the City and County to make up the difference.”


City of Asheville
Outside Agency Funding
$200,000 annually

[NOTE: Outside Agency Grants are funded from the City’s general fund.]


Buncombe County
Outside Agency Funding
$200,000 annually


[NOTE: “The Interim Board decided to ask both City Council and the County Commission for $200,000 each, and Susan Griffin wrote requests to Council and to Wanda Greene. These requests were not made at meetings. Susan Griffin also presented at a Planning and Economic Development and a Finance Committee meeting back in the spring about the BID. In May, the Board found out that neither Council nor the Commission put the BID into their annual budgets. They decided to reduce their request to Council to $50,000 which is representative of what the city would pay if it’s property was assessed at 7 cents. There has been no official action on this request (not in the current budget). This issue is coming back to Council on September 25 when a more detailed budget will be presented. If the BID is approved, it would take effect July 1, 2013. Any appropriations from the city to the BID wouldn’t take place until the city’s budget process next spring. I would think the BID would put their request through the outside agency funding process this winter.”]


RELATED

Towns, fire chiefs oppose Asheville BID due to loss of sales tax revenue
By David Forbes | Mountain Xpress | 07/18/2012
Buncombe County distributes a portion of its sales-tax revenue to every taxing entity in the county, including municipalities and fire districts. Another entity could mean a smaller piece of the pie for all the others. “The issue here is that we feel none of [us] should have to support a special district in the city of Asheville (or any of the other municipalities for that matter),” Woodfin Mayor Jerry VeHaun wrote

StopAVLBID
StopAVLBID is an ad hoc community network formed in May of 2012 to oppose the creation of a business improvement district (BID) in downtown Asheville, NC. In addition to rejecting the proposed privatization of our public space, we advocate for a community development process that is collaborative, transparent and creative!

A primer on the Business Improvement District controversy
Mountain Xpress

   

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About Tim Peck

Unaffiliated Objectivist
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