A plan to create more funds for King Street beautification efforts is raising questions from some residents and business owners, who fear the already expensive real estate in the shopping district will become more exclusive.
“Our goal is to take the dialogue from ‘This is great, how can we get this implemented as quickly as possible” to, “Wait a minute, we need more community stakeholders at the table,” said Joel Sadler, co-owner of Sightsee Boutique and Café.
A business improvement district project through Charleston City Council would impose an additional tax on all commercial property owners on King between Broad and Line streets. Supporters in the district, called BID, point out that the proposed tax, called appraisal, is based on the value of the property and will not increase a commercial business owner’s overall bill by more than 4%.
For a $ 1 million commercial property, which under South Carolina law is assessed at 6% of its value, the new tax would be $ 678 per year.
Of the 467 properties included in the BID, about half will pay less than $ 500 a year, estimates the Charleston Downtown Alliance nonprofit. The Alliance would manage IDB funds if approved.
“To do business on the most important street in the community, we think a cost of 4% is negligible,” said Doug Warner, vice president of media and innovation for Explore Charleston and representative of the BID. .
Any increase in taxes for property owners is a cause for concern for business owners renting out their space, Sadler said.
Sadler was one of more than 20 speakers at the December 21 board meeting who spoke or submitted comments online expressing concerns about the proposed tax district. The Board gave its initial approval to the proposal, and it will be voted on at the January 11 meeting.
“The increase in property value means moving people who cannot afford the higher costs,” he said.
Sadler is also concerned that it will disproportionately affect black business owners and residents.
Warner said the Charleston Downtown Alliance wants to improve the diversity of business owners on the streets, but they will also need the collaboration of government officials.
“If we want more minority owned properties on King Street then the city needs to work with us and maybe the state and other financial partners to find funds available to help minority owned businesses invest. on King Street, ”he said.
Sadler’s cafe, which he co-owns with his wife Allyson Sutton, is located just off King Street, outside the neighborhood limits. While they are open to working with BID organizers and other local businesses to influence the BID’s budget priorities, they fear that rising property values will affect neighboring businesses like theirs.
BIDs in other cities across the United States have had this effect, said John Gaber, chair of the Department of Urban Planning and Real Estate Development at Clemson University.
“If this works successfully, the values of properties within the BID as well as immediately next to a BID will increase,” he said. “When we deal with gentrification and growth, we have to realize that there is a tremendous amount of fallout.”
Improvements funded by a BID aim to keep the streets clean and attractive to both visitors and business owners, supporters say. But such efforts can also attract high-end chains that drive up property values and wipe out local businesses.
“King Street is already very expensive,” said Stephen Buckman, assistant professor of real estate development at Clemson. “One question that emerges is whether this levy, this additional tax, will push people to the brink. There are already people operating on very thin margins.”
If it receives final approval from city council, the Charleston Downtown Alliance will take control of this new tax revenue for King Street-specific initiatives such as street cleaning, decorations, event planning and security. Warner said Alliance members know local businesses are part of the draw for residents and tourists.
“We have to find a way to change the makeup of real estate ownership,” he said. “We have to find a good balance between identifiable local stores and chains.”
BIDs are a national phenomenon that gained momentum in the 1970s and 1980s, Gaber said. Most of them cannot be fully blamed for the issues facing their cities and they all have unique relationships with their respective cities.
“Since (Charleston) is already on an uptrend, that’s not going to change that trend,” Gaber said. “A business improvement district will not change the reality of Charleston.
If city council approves the proposal, the Charleston Downtown Alliance will assume responsibility for all funds raised by the district. The non-profit entity is made up of area business owners including Chris Price, president and owner of commercial real estate company PrimeSouth Group; Lou Hammond, founder of public relations firm Lou Hammond Group; Rhett Outen, co-owner of Croghan’s Jewel Box; and Helen Hill, CEO of Explore Charleston.
A budget proposal from the Charleston Downtown Alliance shows an annual income of about $ 1 million to be spent on district services. About 60% of that amount, or $ 600,000, would come from a new tax imposed on owners of commercial property. The remainder would come from public sector contributions, fundraising, grants and program revenues.
BID organizers are required to garner support from landowners representing more than 50 percent of the district’s land value. The King Street BID has received written support from owners representing 55% of the street property value, for a total of 101 owners. They also benefit from further support from landlords representing an additional 10% of the district’s property value.
One of the budgetary priorities touted by the Alliance and used by other IDBs is the establishment of a street ambassador program. Ambassadors, hired by the Alliance, walked along King Street, offering directions and advice to visitors. They can also help resolve security concerns by notifying the police of vagrancy and other issues.
Warner said the Ambassador Program was not meant to replace police or target the homeless, but would intervene in security and code enforcement issues as necessary.
“The loitering… has been a problem. It doesn’t mean that we have to move people, but it does mean that we will have someone on the street who knows resources are available,” he said. “If someone leaks into the bushes of Marion Square, it’s something that needs attention.”
Aaron Comstock, founder of the homeless nonprofit Uplift Charleston, said he hopes groups like his can find ways to work with the city, other nonprofits. profit and the BID to ensure there is more funding to support the city’s homeless population.
“If you don’t want the homeless to be on King Street, then offer them shelter or transitional housing,” Comstock said.
Jessica Nicoles, owner of the King Street J. Stark store, said she was wary of the idea of extra security.
“The police pursuit of people causing little or no harm begins to look very frightening when distributed by wealthy white business owners,” she wrote in a comment submitted to the council’s public session. December 21. “As a Latinx business owner in the very area that BID plans to protect and improve upon, I am simply asking for more time and clarity on the problem before it becomes permanent.”
If final approved, the city and the Charleston Downtown Alliance will need to draft an agreement called a memorandum of understanding that will outline the goals and responsibilities of both parties for the district. He will see his first income from the tax in 2023.