Charlottesville is considering a 13-cent tax increase on buildings on and around the Downtown Mall to fund additional services and amenities, raising concerns for some property owners who want to know why the move is necessary.
“In general, I’m not a big fan of very specific taxes without knowing what they are for,” said Kevin Palmer, who would pay an additional $800 a year if the City Council approves the increase.
“Why do we feel the need to have [a district] specific to the downtown?” Palmer asked.
The Downtown Business Association of Charlottesville has requested that the council create a “community improvement district” between Ridge-McIntire and Ninth Street to raise more than $2 million during the next five years.
“The funds will go to a nonprofit organization of which the majority of the board members are property owners in the district,” said Jeff Sadler, a consultant with Richmond-based LeadActLocal. Sadler was hired by the downtown association with funds from the city to explore the district option.
A report on the tax district is expected to be given to the council March 2, to be followed by a public hearing March 16 and possible adoption April 6.
“Only this timeline would allow for the new organization to be funded on July 1 in time to have a positive impact on the second half of 2015,” said Bob Stroh, general manager of the Charlottesville Parking Center and chairman of the downtown association.
The tax district is supported by the North Downtown Residents Association, an organization that has published a report documenting what it sees as deteriorating conditions on the mall.
“The Downtown Mall is Charlottesville’s most vibrant and important meeting place,” board member Jim Neale said at a council meeting Feb. 17. “It’s also one of the city’s primary tourist attractions, a principal economic engine and a vital source of revenue.”
However, the special tax district would not extend into the boundaries of the north downtown neighborhood.
Another property owner also expressed support to the council.
Ludwig Kuttner said the city needs to compete with Albemarle County, which recently has seen restaurants and a movie theater open at the Stonefield development.
“We need to be competitive, active and try new things,” Kuttner said. “It is rare that a big group of property owners asks for a tax increase to fund the future of the mall. If we stand still, we will fall back.”
However, Councilor Bob Fenwick said he does not believe property owners have been given enough information about how the money would be used.
“If the people who are going to be paying the freight for this are not really brought into it, then we are looking for an explosion if the citizens are not told what the budget is for,” Fenwick said.
Fenwick said several property owners who do not support the idea have written emails to the council.
An owner of two office condominiums on Market Street who said his tax bill would rise by $554 a year, said he did not see how he would benefit.
“Our belief is that most of the improvements will be designed to benefit retail merchants on the mall and to a lesser extent to those on Water and Market streets,” John Pfaltz said in an email to councilors. “Making the downtown area more attractive will be a benefit, but its advantages will not be uniformly distributed.”
Sadler said people who live and work downtown will benefit from the additional business that would be generated by marketing efforts designed to help the mall.
“The more traffic you have in the area, the safer it is,” Sadler said. “The goal of the district is to continue to make it vibrant and safe and clean and attractive and fun.”
Joe Gieck, who owns several properties within the proposed district, said he’s already paying an additional assessment in the form of a stormwater utility fee adopted by the council in 2013.
“This [new] increase will only be passed on to businesses, many who already are struggling,” Gieck wrote to the council. “With the tax revenue from our properties, the city should be able to support these proposed efforts from a community health and safety standpoint.”
Palmer said the entire community would benefit from additional spending on the mall, but that shouldn’t necessarily come through a special tax district.
“If you tax one group of people and say it is for the benefit of everybody, then my thought process is that everyone should bear the tax burden,” Palmer said.
John Plantz, who has owned Timberlake’s Drug Store on the Downtown Mall for nearly 40 years, questions the need for additional money to be spent by a new nonprofit.
“[Some] of the money collected would be used to make the mall safer,” Plantz said. “Isn’t this the city’s job? [Some] of the money would be used for physical improvements. Isn’t this the city’s job?”
Property owner Cliff Fox said the city’s economic development efforts should be directed toward attracting and maintaining high-paying jobs and not supporting the retail economy, which he describes as a secondary economy.
“If the primary economies are functioning well, the salaries and profits from those primary economies will support the level of development needed within the secondary and lower-level economies,” Fox said. “Spending marketing dollars to try to improve secondary economic production is futile if the surplus local dollars are not available to support the existing retail.”
While Sadler said he believes the district can revitalize the mall, he acknowledged the uncertainties on the minds of property owners.
“These [districts] are always difficult to get started because there’s so much that’s unknown,” Sadler said.