Editorial

DID expansion concerns deserve further study

October 16, 2015
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Grand Rapids City Commission held a second public hearing last week to expand the Downtown Improvement District, which was met with opposition from the very businesses targeted for assessments and inclusion.

The city, which will decide on the recommendation Oct. 27, cannot in good conscience assess taxation without representation of the district considered.

The area under consideration includes Founders Brewing Co., The Rapid and Downtown Market, as well as a portion of the near west side, with Seward Avenue NW serving as the western boundary, which includes Grand Valley State University.

Business owners raised additional questions as to whether the expansion would dilute services in the DID and also in regard to the increasing costs spread among the for-profit businesses, since nonprofits are exempt from assessment. Residential units also are exempt, and the area has been congested with the construction of new apartment and condominium buildings.

Representatives of GVSU indicated they are anxiously awaiting inclusion and graciously indicated the tax-exempt university would “participate.” Given other tax-exempt properties within the district, the business owners are rightfully concerned. Some part of the business assessments are predicated on property size, GVSU being one of the largest.

Expanding the boundaries deserves specific discussion, apart from the assessments. State law allowing DIDs was initiated based on blight and costs associated with bringing such properties to full use. The statute reads: “(This Act) authorizes the creation of certain boards and the collection of revenue and bonding for the redevelopment of principal shopping areas and business improvement districts of certain cities.”

One could certainly question whether these outer boundaries to the DID are “principal” to the downtown.

 Business owners noted the area is not a retail sector and has little pedestrian traffic, and the tax ultimately may decrease their bottom line.

John Van Tongeren, director of retail at Ferris Nut & Coffee, 227 Winter Ave. NW, told commissioners the 91-year-old Grand Rapids-based company has invested millions of dollars into the city over the years, adding that more than 90 employees out of 120 are taxpayers in the city. “The calculation and allocation of this ‘special assessment’ to Ferris is inequitable and a penalty,” he told commissioners.

Comments from the DID’s representative, Kris Larson, Downtown Grand Rapids Inc., appear to underscore business concerns. “The dilution of resources is a real challenge that we are dealing with right now. A recent interpretation of state statutes says we can no longer assess nonprofit earners. That was a very big hit to our budget moving forward.”

The Business Journal concurs with Van Tongeren, who said, “The solution in my mind is to put this back on the DID.”

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