City moves forward with plans to tax downtown, raise funds for extra services

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The first block of North Front Street. Photo by Ben Brown.
The first block of North Front Street in the heart of downtown Wilmington. File photo.

The city of Wilmington is moving forward with plans to create a municipal service district, or MSD, in the growing downtown central business district.

An MSD would bring extra services to the area, such as graffiti cleanup, street beautification and ambassadors who would help keep visitors safe as well as guide them to the district’s highlights.

The city has been looking at creating an MSD downtown for over a decade, according to Ed Wolverton of Wilmington Downtown Inc., who presented a report on the subject to city council Tuesday night. Wolverton led a task force made up of local business owners and leaders that was commissioned by the city in September 2014 to examine the matter.

According to Wolverton, there are currently 56 MSDs in North Carolina, including in Fayetteville and New Bern. As part of their research, the task force made site visits to MSDs in Winston-Salem, Durham and Raleigh to see how they work.

“MSDs are a successful tool that’s been used all over the state and all over the country,” said Wolverton of their findings. “They are a proven long-term tool.”

In order to pay for all these extra services, taxpayers within the district, which the task force is recommending be limited to the 70-plus blocks that currently make up the area zoned as the central business district, would see their property tax rates increase. The proposed levy for the Wilmington MSD is seven cents per $100 of assessed property valuation. According to the report, approximately $401 million worth of property is located within the CBD, which could generate $281,660 in revenue to provide for these services.

Several public information sessions have been held to discuss the proposal with local businesses and residents, with the most recent one held just last month. When asked by Councilmember Earl Sheridan what his assessment of the public’s feeling on the matter is, Wolverton frankly said, “Suspicion.”

“That’s an operative term there. There’s always some very staunch opposition [to MSDs],” Wolverton said. “There’s always going to be people who say, ‘That’s a tax, I don’t want to pay into that.’”

“Do people paying in have a say in how [the money] is used?” Councilmember Neil Anderson asked.

“Absolutely,” said Wolverton, emphasizing the need for the public discussions to get input for the taxpayers. So far, he said, people he’s spoken to have listed public safety, economic development, maintenance, street beautification and special events as areas where they’d like to see their money go.

Mayor Bill Saffo said more public information sessions are necessary to stop the “misinformation” about the proposed district.

“I think there are people out there who would be supportive of it if they just understand the particulars of it,” Saffo said, noting that the information people are hearing on the internet or from others could be misleading or confusing. “I think it’s important that if people are serious and really want to know about this MSD, that they come to these meetings and get the gist of what this really is.”

“I want to make sure I hear from everybody,” Saffo continued. “If we don’t do that, I don’t think we’re being prudent about it.”

If they want any of these new services within the next year, the city will have to include the plans in their budget for the 2016 – 2017 fiscal year, which will start July 1. Based on the need to hold public hearings, which require that a report be made public 30 days before the hearing is scheduled, the city has to move fast to accomplish everything within the tight deadline.

The council voted unanimously to approve the resolution to create the public hearing. No date has been set yet, as the city will now have to put together an official report based on research and public input that will be similar to the one put together by Wilmington Downtown Inc.