Cooper: If BID fails, expand process

Cooper: If BID fails, expand process

July 30th, 2019 by Clint Cooper in Opinion Free Press

If a business improvement district is passed by the Chattanooga City Council today, one of the duties of its operators potentially could be removing graffiti from a brick wall, as was being done here on a building near Patten Parkway in 2014.

Photo by Doug Strickland /Times Free Press.

Since five Chattanooga City Council members voted on first reading to create a downtown central business improvement district (BID), Tuesday's second reading may be a foregone conclusion. A BID may be a done deal.

But if it's not, and five votes halt it, we have a suggestion for River City Co., which endorsed the creation of such an area in which property owners would be assessed annually for services, according to the ordinance, to "promote the successful and continued revitalization of Downtown Chattanooga" by providing "an enhanced level of programs and services" not provided by the city:

We believe the economic development nonprofit should take another year to further study such a proposal, hosting community forums to discuss the most controversial portions of a BID.

» Consider an easier opt-out for businesses or some type of sliding scale of payment, not simply one based on the size of the property. The BID resolution makes it extremely difficult to opt out, allowing that privilege only to nonprofits which fulfill three tenets: 1) The owner of the property is "an institutional nonprofit organization" that is registered by the state; 2) The property already is exempt from property taxes under state law; and 3) The owner demonstrates "substantial financial and/or economic hardship" to the BID board, which would be sole judge of that designation.

While many businesses would have no trouble paying the annual assessments, some small business owners and start-up creators might. If they could pay less while attempting to spin up to a highly profitable status, they would have skin in the game while doing it and would be even more supportive the more financially sound they became.

» Rethink a provision that would assess properties on their current value rather than their value when they would be redeveloped as part of a tax increment financing (TIF) district or receive a tax break under a payment-in-lieu-of-tax (PILOT) program. Owners of properties under TIFs or PILOTs already receive significant tax breaks; they don't need another one through a BID.

The BID resolution also does not clarify how properties currently under PILOTs programs would be assessed.

» If people are unsure what powers of "security services" the operators of a business improvement district would have, explain them. Put in writing how those services would differ from those of a Chattanooga police officer.

Neither River City Co. nor a potential BID operator can anticipate all the security incidents that might arise, but property owners and citizens who shop or visit property within the district should know what to expect.

» Defend the boundaries of the district, which roughly run along U.S. 27 on the west, the Tennessee River on the north, Georgia Avenue and Lindsay street on the east and 13th Street on the south. Why so big? Why so small? Why not the Southside? Why not the North Shore?

Property owners and citizens don't have an understanding of why the lines of the BID were drawn the way they were.

When the initial BID proposal died for lack of a second on the motion to approve the ordinance in early June, we suggested some improvements, some of which council members had put forth. Among those were an annual audit and adherence to the state's open meetings act, both of which were added. We also suggested opt-outs and a sliding scale, and the highly restrictive opt-outs were added.

We also thought renters should be included in board decisions, and that also was made a part of the proposed ordinance.

Nevertheless, unelected boards with power over city streets, sidewalks, alleys and parks frankly scare us, as does the potential expansion of BIDS and their annual assessments. Currently, no more are planned, and the growth of annual assessments is capped at 5% a year. But quasi-government, like government itself, has a way of expanding and never contracting.

We fully understand River City Co.'s initial desire for the central downtown core to be made even more beautiful and desirable to visit. And we don't discount the fact that if a fund to pay for such improvements were voluntary, such a fund would never get the money it needed.

We also imagine BID supporters would be reluctant to stretch out the process of creating such a district over another year, the thinking being that striking while the iron is hot is necessary.

But, in our reasoning and in spite of the knowledge that BIDs already are found in many other cities, we would like to see a more expanded, more detailed, more fleshed out process before a district becomes a reality in Chattanooga.

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