BUSINESS IMPROVEMENT DISTRICT EXPLAINED... SORT OF

by Michael Monks 
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"We've got this vision emerging for Center City, it's a tool that can be part of Covington's toolbox to get things done," said Brad Segal, President of Denver-based Progressive Urban Management Associates, the firm charged with creating two keys to our City's future. Initially, PUMA was contracted to develop the Center City Action Plan but its specialty is the creation of business improvement districts, which the Covington Business Council asked the firm to explore as well. 

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Since the news emerged last summer that PUMA would recommend whether a BID is right for Covington questions have arisen as to how it would work here. At a public forum Wednesday afternoon at the Artisan Enterprise Center, Segal attempted to explain some of those details while others remained murky. 

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While comparative programs were pointed to for guidance such as those in Louisville and Cincinnati, in order for the BID to work it would have to be crafted specifically to fit Covington's needs. And fast. "If you from a BID you should stay focused on what we heard from property owners: economic development, enhanced maintenance, and capital improvements," Segal said during his team's fifth trip to Covington. "You're not going to raise millions of dollars. This isn't Downtown Cincinnati. But you can decide how money is spent."

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Here's what we know right know:

• A BID involves property owners agreeing to tax themselves more in order to fund additional projects to promote, beautify, and improve Covington's commercial districts
• Covington's BID analysis indicates that it would work best if the district focused on the Madison Avenue corridor from the Cathedral north to the river, the riverfront, Pike Street from Madison to Russell, Roebling Point, and Mainstrasse
• The additional tax would have to be approved through petition by a majority of property owners in the district representing a majority of the cumulative property value and would only apply to commercial properties (mixed use buildings would only face addition taxing on the commercial portion) 
• The BID would be a self-governing entity determining how the money is spent

PUMA inventoried the commercial properties in the zone and found 339 Downtown and 73 in Mainstrasse. The cumulative building value Downtown was $296 million while in Mainstrasse it was $13.4 million. A BID that encompasses both areas would have an estimated budget of $400,000 annually. (Alternate scenarios were presented in which Downtown or Mainstrasse had their own individual BID showing budgets of $350,000 for Downtown and $100,000 for Mainstrasse. "There's efficiency in combining them," Segal said.) From the budget, $250,000 would be committed to economic development & beautification and $150,000 would be allocated for enhanced maintenance. 

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The tax on a property would be applied through a formula that considers square footage, lot size and linear frontage. Here are two examples offered during the presentation:

• The offices of KKG, a Covington business similar to PUMA and is contributing to the Center City Action plan, owns 953,000 square feet on a 33,280 square foot lot that has 80 feet of linear frontage. $476 would be applied for square footage, $635 would be applied to the lot size, and $537 for the linear frontage for an annual total of $1,648
• An imagined coffee shop in Mainstrasse with 247,000 square feet ($118) on a 6,678 square foot ($127) lot with 50 feet of linear frontage ($236) would pay an annual total of $581

The governing board would be made up of nine to fifteen voting members, two-thirds of whom would be property owners in the BID. Ex-officio civic partners would also meet with the board. 

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Time is of the essence if property owners in the proposed BID want to move forward this year. "Downtown would have to get going with petitions in April or May," Segal said, explaining that the annual deadline to submit assessments to the tax collector is in August. Following the petition drive there would be a series of public hearings over the summer. 

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After all of this studying however it is possible that a BID will not be recommended for Covington. Segal said that his firm has helped create many business improvement districts across the country but that they have also suggested against the endeavor in fifteen different cities. PUMA returns to present the rest of its findings on the BID and the Center City Action Plan in mid-March.