A recent Salem City Council decision will force downtown business and property owners to lock themselves in a room and hash out who will represent their interests. An Economic Improvement District (EID) Administrator will need to be chosen in the upcoming months.
Downtown business and property owners are historically divided on how to represent themselves. Fighting, accusations of conspiracies, and backdoor deals are not uncommon. There are many different factions within the 200 businesses that make up the downtown core.
The debate on the EID consists of: the tax district itself, the annual assessment of taxes, and the administrator of the $200,000 in funds. Each is done in different increments.
The tax district itself will be in effect until June 30, 2014.
“In October 2010, the Director of Finance [Tony Mounts] took a report to the City Council that said the EID is expiring,” says Sheri Wahrgren, downtown revitalization manager for the City of Salem. The council approved the extension for three and a half years.
The assessment of taxes is given a public hearing annually coinciding with the fiscal year. Property owners are notified by mail of the public hearing and have the option of objecting to the assessment. According to the ordinance, if property owners that represent over 33 percent of the total square footage of the district object, the EID tax will not be levied. During this period, Salem City Council can adjust the assessment, but if that percentage is obtained they are unable to levy the tax.
Go Downtown! Salem’s contract as EID Administrator will expire this year on June 30. That leaves the City of Salem in the precarious position of deciding who will act as the EID Administrator.
Debate on the issue has been fogged with confusion on what is being debated. Salem Chamber of Commerce took a position that included not renewing the EID on January 21, almost exactly four months after the Salem City Council approved the renewal.
“I think this is a fairly confusing process. Frankly, I don’t think there’s a clear picture of what the EID is, what the services are that should be offered by any administrator,” says City Councilor Chuck Bennett of Ward 1, which includes the downtown area.
What the City of Salem is looking for in an administrator, according to Wahrgren, is an organization that can meet the legal requirements of being the administrator, while also showing that they have the support of the business and property owners that they represent, are able to outline a plan for providing services to those businesses and providing a budget to pull it all off.
Bennett says, “I don’t think it has been a success. Go Downtown! Salem hasn’t done a good job meeting the promised services and goals.”
Wahrgren thinks that allowing the business and property owners to decide their representative will bring more support of the chosen organization. She says, “It’s just that I think we should try to get a consensus. We should try to get a majority for the expectations [of the EID administrator]. For us to be successful, we need to collaborate.”
Ending the EID?
Each fiscal year, property owners have the ability to object to the assessment. A notice is mailed to property owners within the tax district to allow to show support or object to the tax. At that time, City Councilors can consider any objections and make changes to the proposed assessment.
If the written objection exceed the 33 percent threshold, the tax would not be levied. That would effectively end the EID and the need for an administrator.
The next assessment is July 2011.