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Council approves BID: downtown to see tax hike

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By Leslee Kulba –

Councilman Gordon Smith was standing as Alan Ditmore took the microphone. Was he staring down the renegade Democrat to pull him in line? A closer look revealed City Clerk Maggie Burleson fussing over his computer. After a few minutes, she exchanged words with Mayor Terry Bellamy. As the next public hearing was about to begin, the mayor read from a piece of paper she had just received from the city clerk, “BID has crashed all laptops.”

Only Councilman Cecil Bothwell responded publicly to the mass emailing. He was of the opinion that the bulk of the emails were “anti.” A survey he had worked on with People Advocating Real Conservancy [PARC] indicated 57 percent of those polled opposed the Business Improvement District, and only 19 percent wanted it. Among many other reasons, Bothwell cited his responsibility to be responsive to his constituents as cause to vote against the proposed taxing district. Bellamy cast the only other no vote.

Another turnoff for Bothwell was the “changing targets” of the BID proponents. First they wanted more downtown events, then they wanted to have ambassadors, and now they want to make downtown green and clean. “It sounds like a solution looking for a problem.” Bothwell wanted to be emphatic that he did not support the city burning more tax dollars on unelected boards. Using strong language, he faulted the city for covering up the Grove Arcade’s insolvency with rent games and its bailing out of the Pack Square Conservancy after they said they would accept no tax dollars.

Worst of all was the BID’s request that a 5-7 cent/$100 valuation tax be levied on downtown residents – for starters. The average BID tax in the state is 15 cents. BID supporters oohed and aahed over the pages of numbers that did little more than multiply tax rates by valuations. No attempt was made to estimate the extent to which the new tax would grow the economy as supporters claimed or, more likely, cause an exodus of business or at least a slowing in growth.

Downtown is an economic driver for the entire region. A white paper recently published by the city manager’s office lamented that Asheville’s downtown daytime population was twice the taxpaying population. Normally, municipalities with water systems get out-county visitors to pay for downtown infrastructure and services they use, and compensate them for paying both city and county taxes, by charging differential rates. Asheville is unique in that the Sullivan acts prevent it from doing so. During public comment, Tom Flora added that 42 percent of the property downtown is tax-exempt.

For the last couple of years, the city has been trying to forge regional partnerships and secure legislative relief for the tax inequity council was about to compound. On top of that, the city was seriously considering holding a bond referendum to pay for more parks and greenways. Bothwell did not think people saddled with a new 7-cent tax would tend to support a referendum, too.

Bothwell and Bellamy would have preferred to wait at least until the county finished revaluing property. She explained that after the county raises its taxes, the city will have to adjust its taxes to keep taxes reasonable. In recent years, that has meant lowering the tax rates, and the problem with that is the state redistributes sales tax revenues amongst the county, city, school, and fire districts according to their share of the taxes. Bellamy speculated offsetting the BID tax could lead to decreases in sales tax revenue.

Bellamy said this was not the right time for a BID, but other times would be just as bad. If she would not support having the water system run by an independent board, she certainly was not going to abdicate responsibilities for basic city services like cleanliness and public safety to one. The mayor said anytime council asks staff to make something a priority, they find the resources and make things happen. If cleanliness and public safety are that important, then council needs to make these concerns a top priority during their next budget session.

Smith recited points of view from both camps, showing he had listened, but he sided with the majority on council. Manheimer expressed greater interest in wordsmithing the bylaws than in assuring marginalized property owners they would continue to be able to maintain their interest in the city. She requested that recycling and sidewalk repair be added to the list of tasks the BID would be allowed to perform.

At that, a couple more BID opponents laughed in disbelief and headed for the door. Chris Peterson had already left. He said the subject had been tabled to give the proponents time to talk to opponents and compromise. He had not been contacted at all, and was blindsided by the latest 400-page document. Bill McKelvey foresaw devastation. He had left South Beach, Florida under similar circumstances.

The BID will likely go into effect July 1. Metrics have yet to be established to gauge returns on investment. If standards are not met, council may sunset the BID three years from the start date.

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