MOBILE, Ala. (WALA) – The City Council will hear arguments Tuesday on whether to continue a special tax on downtown commercial property owners to pay for additional services that the city government is not providing.
The council established the so-called Business Improvement District in 2005, and council members have periodically renewed it. A public hearing on Tuesday will help council members determine whether the agreement should be extended for another five years after it expires next year. Voting could take place next week.
Mobile City Councilman William Carroll, who represents the downtown area, said the special tax has contributed to a revitalization movement that has transformed the area.
“With all the people coming and all the new businesses and restaurants we have there, it seems like a no-brainer to me to continue to support what they’re doing downtown,” he said.
The concept is to allow property owners in a certain part of a city to tax themselves for additional services.
Money generated by the Downtown Business Improvement District does not require City Council approval. Instead, a company affiliated with the Downtown Mobile Alliance controls the funds, which pay for services such as collecting trash from garbage bins on Dauphin Street, removing graffiti and promoting the area.
It also pays for so-called ambassadors who answer questions, chase away beggars and otherwise provide assistance to shoppers and visitors. Fred Rendfrey, interim president and CEO of the Downtown Mobile Alliance, said the program has planted 68 trees and 130,000 flowers over the past five years.
“I think in the 20 years we’ve managed the district, we’ve helped clean up downtown; we made it safe; we made it, you know, more predictable,” he said.
The neighborhood includes 547 individual homes in a 75-block area, roughly from Beauregard Street to the Mobile Civic Center, and from Water Street to Cedar Street.
The appraisal varies depending on the value of the property. For example, the owner of a $2.5 million property pays $8,700 per year. According to the Downtown Mobile Alliance, the average annual assessment is $890. The highest amount is $56,210. The lowest is just $9.
Current budget projects raise nearly $1.4 million from assessments. With voluntary contributions from tax-exempt properties, such as those owned by government agencies, the total budget is over $2.3 million.
Schemes like the Business Improvement District can be controversial because, unlike a business association, participation is not voluntary. Last summer, a hotel developer went before the City Council to argue for removing a similar tourism promotion program from a special tax on hotels and motels.
Rendfrey said he supports the council’s “forced look” that the regular renewal votes require. He said the alliance must continually justify the additional costs. But he said the services provided by the organization have helped attract “literally billions of dollars” of private investment over the past two decades. He pointed to several new hotels and a growth in the number of businesses not only in the entertainment district along Dauphin Street, but also on roads like St. Louis Street.
“You know, there are parts of downtown that we didn’t even know existed that are now hipper and cooler and people want to spend time there,” he told FOX10 News. “And so, you know, I think the results show that there is an ROI for the organization.”
Dave Rasp has a broad view of the tax district. He has owned Heroes Sports Bar and Grill since 1998 – seven years before the district was created – and also pays the tax as owner of the property on Royal Street.
Downtown was a “very different scene” in the early days of Heroes, Rasp said. He said the development since then cannot all be attributed to the special tax. But he said it was helpful overall. He added that this is a good time to think about how this can be improved.
“I think, like anything that’s been around for so long, it might be helpful to look at it, you know, reassess it,” he said. “What are the tasks? What are the goals? And see how we focus on that specifically. It’s very easy to get off track after a long period of time.”
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