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Council favors BID fee change

Approval of the BID’s petition to cut the fee for most property commercial properties by 50 percent kick-starts the process for a renewal vote that is required as a result of August 2012 changes to the BID. That change eliminates the ability of property owners to opt out of the BID, a requirement that became a focal point of Thursday’s discussion that at times veered into the merits of the BID itself.

In urging the council to table its vote, opponents noted that there are pending state and federal lawsuits against the city and the BID and urged the council to hold off on making any decision until at least the state suit is settled. A hearing on that suit is scheduled for April, and the outcome will dictate whether the BID dissolves or continues.

However, Council President William H. Dwight and other councilors said they did not believe the lawsuits had any bearing on the fee change request, and they approved the petition unanimously, 7-0, on first reading. Council Vice President Jesse M. Adams and Ward 5 City Councilor David A. Murphy did not vote or participate in the discussion because they have family members who own property downtown. A second vote is scheduled for the council’s April 3 meeting. If approved, the new fee structure would take effect July 1.

Opponents at Thursday’s meeting accused the BID of using the petition as part of a strategy to soften the blow of mandatory participation and accelerate a renewal vote. Given that roughly 60 percent of property owners downtown chose not to join the BID when it was created nearly five years ago, a positive renewal vote would significantly increase the size of the organization.

“This is designed to make the BID seem more palatable when it forces us into the BID in a few months,” said Alan Scheinman, a downtown property owner who is part of both lawsuits against the city and BID.

Scheinman said he could easily see a scenario in which the BID seeks to restore the fees to their current level in the future. Opponents also argued that a part of the BID’s petition seeking a change in the exemption for single-family residences should not be allowed.

Natasha Yakovlev, the BID’s executive director, acknowledged that the BID will grow considerably after a positive renewal vote. She said the fee structure change gives the organization a chance to lower the impact on both current members and those being forced to join and still work within a similar budget.

The BID currently has about 110 commercial properties and a budget of $409,000. Under the new fee structure, assuming a positive renewal vote, the BID would have 279 properties and a budget of $510,000, Yakovlev said.

“The BID is not about making money,” she said. “The BID is about serving the district.”

Yakovlev said the board has yet to set a timetable for a renewal vote, but when pressed by Ward 2 City Councilor Paul D. Spector, she anticipated it would take place this spring or summer.

Under the fee change, property owners within the BID would pay a fee based on the calculation of assessed valuation multiplied by .0025, down from .005. A building assessed at $500,000, for example, would pay $1,250 rather than $2,500.

In addition to reducing the fee that most commercial property owners would pay, fees would also drop for residential buildings and mixed-used residential and commercial buildings. The new fee would be set at $50 per residential unit and 50 cents per square foot of commercial space, compared to current rules that charge $100 per residential unit and $1 per square foot of commercial space.

Hotel owners would be charged a fee based on the assessed value of the property multiplied by .0025, rather than current fees of $200 per room.

There are no proposed changes for single-purpose entertainment or cultural venues, which would continue to pay a fee equal to the assessed value multiplied by .0025.

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