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Downtown CID approved; tax starts on Jan. 1

The Downtown Excelsior Partnership is breathing a little easier over the last few days, as the organization now has a consistent source of funding to carry it into the future.

Last week, the long, difficult process of establishing a community improvement district (CID) in the downtown area culminated in an election—and the property owners approved it by a margin of about 55 percent to 44 percent.

“We’ve had two years of conversation, and a year of hard work,” said Keith Winge, who serves as executive director of the DEP.

Winge explained that when the city’s economic development sales tax failed for a second time at the ballot box, DEP realized they needed to figure out something else if they wanted to continue to serve the downtown area.

“We met with the business owners and property owners to try to determine what they wanted to see in the future, what we could afford and what we could not afford on our current budget,” Winge said. “And we determined that we needed to seek some funding in order to have the mechanism to take things to the next level.”

The DREAM Initiative several years ago identified CIDs as a viable source of funding for the development and promotion of downtown, and DEP decided that a CID and the accompanying sales tax fit the situation’s needs better than special assessments or property taxes.

“So we did our homework and figured out what that would entail,” Winge explained. “And we began going around trying to build support through meeting with property owners.”

Those owners were asked to sign a petition to get the CID going. The official goal was at least 50.1 percent of the property owners in support, but Winge said DEP set its sights a little higher, not just because they wanted a cushion but also because it made sense to build as much consensus as possible.

“We knew from our preliminary polling that some of the property owners would not support a sales tax,” he said. “Anytime taxes are involved, it’s going to be a divisive issue. But some of them, when they knew where it was going, who would be overseeing it and what it was for, decided they would support it.”

Winge also added that the attitude and work of those who are active in the downtown business district made a huge difference. “We could not have done this four years ago,” he said.

Once the petition was filed, the city council approved the formation of the CID and appointed a board to oversee it. The board then met and officially set the ¾-cent sales tax which had been intended all along. The next step was to notify Clay County, which mailed out ballots on Sept. 10; the ballots were due back at 7 p.m. last Tuesday, Sept. 24.

The local sales tax rate is currently 7.725 percent, with an extra 1 percent charged within the boundaries of the Elms CID and the Vintage Plaza CID. The ¾-cent Downtown CID brings the total sales tax for the downtown business district to 8.475 percent. No residences—including businesses that are also residences, such as the Monterey Motel and Creekside Inn Bed & Breakfast—are included in the CID’s boundaries, and neither is The Elms, which has its own CID. Wabash BBQ is also not included, due to its distance from the rest of the CID.

After the ballots were counted last Tuesday, Winge said Monday was the deadline to submit notice to the Missouri Department of Revenue; that was done on Friday, in advance of the deadline, and as a result the sales tax will start being collected on Jan. 1, 2014.

“For our local businesses, there will be no difference,” Winge said. “They’ll get a new tax rate schedule and it will go in with the sales tax they collect—and then the state will return the portion for the CID.”

Winge said the tax is expected to generate between $30,000 and $35,000 per year, and a five-year budget earmarks those funds for marketing, economic development and improvements. If the funds do their job of promoting and improving downtown, then the proceeds of the tax will rise as business increases, either through newly-recruited entrepreneurs opening up shop or through increased traffic.

“Now we’ll get into the details of how to make it all work,” he said. “The merchants will be helping us with that process.”

While Winge said he was pleased with the outcome, the work that led up to it would have been a benefit even if the property owners had not approved the CID.

“It was a good process,” he said. “As we did this, we got to know the property owners that live out of town, and started a dialogue with them to find out what we could do to help them to become a more active part of downtown.”

By Eric Copeland •

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