By DAVID BORAKS
DAVIDSON – Consultants working on the proposed Red Line Regional Rail Project said Wednesday they’ll revise a key section of the financing plan to ease the potential burden on small businesses and property owners along the rail line.
They’re talking about two major changes in the $452 million plan: 1) reducing the assessments on properties that house small businesses; and 2) delaying assessments until the rail line is actually running. Consultants are planning other revisions as well: On Wednesday, they also said that owners who rent out detached single-family homes in residential neighborhoods won’t have to pay the assessments.
Consultant Mark Briggs, of Parsons Brinckerhoff, announced the concessions at a meeting with Davidson merchants and property owners Wednesday at Davidson Town Hall. They are the first significant changes to be discussed publicly as the consultants and the Metropolitan Transit Commission’s Red Line Task Force try to fashion a “consensus” plan that can win approval from local governments – and property owners.
The changes also come after several weeks of meetings with everyone from town officials to developers to property owners. At those meetings, some business and property owners criticized plans to create Special Assessment Districts (SADs) of commercial properties with 1/2 mile of the rail line.
Property owners would have a say – Under N.C. law, at least 50 percent of the property owners (1 vote per property owner) representing 66 percent of the assessed value of properties in a district would have to vote in favor of the plan. Once the districts are created, property owners would pay a special annual fee of 75 cents per $100 of assessed value to help pay for the line.
Some have expressed concern that their businesses would be at a disadvantage or at worst, be forced to close.
Even after hearing that the fee might be lower and start later, Elaine McArn, owner of The Needlecraft Center on Main Street, still was concerned. She thinks rail-driven population growth would help big-box retailers and shopping centers away from the rail line, but not shops like hers.
“As a business person on Main Street for many, many years, I don’t have the vision to see how this is going to help me,” she said.
At Wednesday’s meeting in Davidson, several business and property owners who spoke wondered why they were being singled out.
“I want the rail,” said Evalyn Crawford, of Wooden Stone gallery on South Main Street. “But what I’m hearing is that the burden is too high on too few.”
Davidson home builder and town commissioner Rodney Graham and Davidson Village Inn owner Gordon Clark both asked why everyone throughout the region couldn’t be taxed to pay for the rail.
Mr. Briggs said that could be an option, though “raising property taxes is a painful thing.”
THOSE WHO BENEFIT PAY
Mr. Briggs said the idea behind the SADs is that those who benefit from the rail line – through increased property values or increased retail traffic – should contribute in some way toward the project.
But the question is how much. He and other project supporters have heard loud and clear that property owners don’t like the 75-cent fee.
“What we found out is we absolutely have to make a change for small businesspeople,” Mr. Briggs said. “It’s just has to happen, because it’s not fair, it’s not equitable on the small business person.”
The consultants also say they will push back the date when property owners have to start paying the special assessments. As written, the plan calls for property owners to begin paying the assessments up front, beginning in 2013 – four years before train service would begin. Instead, Mr. Briggs said Wednesday, the first payments would due by Jan. 30, 2017.
“That’s when the train’s supposed to operate, so we think it’s a whole lot fairer. You aren’t writing that check until the year the train operates,” he said.
A couple of property owners asked if the business plan would still work if the consultants cut the revenues they had expected from these properties. Mr. Briggs said the original business plan was built with highly conservative revenue projections, and he thinks there is room to cut the fees. Ms. Henderson said the size of the fee ultimately would have to balance help for small business with revenue needs.
Meanwhile, the size of the assessment is expected to be cut, though it’s not year clear by how much. Mr. Briggs said one of the reasons for Wednesday’s meeting in Davidson was to seek input from property owners on what amount might be acceptable, whether it’s 10 cents or 15 cents per $100 or some other amount.
Later in the meeting, Davidson Downtown Director Kim Fleming noted that until last year, Davidson had a tax surcharge on downtown businesses in what’s called a “Municipal Services District, or MSD.” That tax was 14 cents, and she suggested that might be a starting point for setting a new proposed rate in the SADs.
To make the revisions work, Mr. Briggs and fellow consultant Katherine Henderson, of KKH Consulting in Raleigh, said they were studying how to set up different classes of properties within the SADs. Small-business properties would be assessed at the lower rate, while larger property owners and corporations would pay the full 75 cents. And that raised a key question: How should the plan define small businesses?
The gathered property owners and business people batted around a variety of ideas, from number of employees (under 50, or some other number) to the assessed value of a property. Some people suggested annual sales, a measure used by the U.S. Small Business Administration. But that would require accurate data about the annual sales of local businesses, something that’s not easily available, Mr. Briggs said.
Realtor Beth Knox Sullivan asked if existing businesses might be exempted from the SAD fees, while new retail shops and businesses along the line would have to pay. Ms. Henderson wasn’t sure that would be legal.
Megan Blackwell, owner of The Village Store on Main Street, said she thinks the special fee would change the face of downtown as property owners sought tenants who could pay higher rents. “It would disincent property owners from putting in their buildings what downtown Davidson wants,” she said.
Meanwhile, the consultants still haven’t given details about which specific properties from Charlotte to Mooresville would be part of the SADs. A small map posted on the project website, RedLineRegionalRail.org, suggests boundaries. Planners in towns and counties helped draw that map, and have the details, Ms. Henderson said. She said consultants would post more detailed, interactive maps and information by the end of February, she said.
Bob McIntosh, owner of the McIntosh Law Firm on Delburg Street, said he’s unhappy about taxes and sees the SAD fee as just another tax being heaped on property owners in Mecklenburg County. “Where does it stop?” he asked.
He said he thinks the big question is: “Is this an acceptable plan? I’m not seeing it. We’re betting on a huge number of unknowns.”
He also questioned another piece of the business plan: tax increment financing, or TIF. TIF assumes that all properties near the rail line would eventually gain value – and pay additional taxes – because of the train. The tax rate wouldn’t change, but town officials from Charlotte to Mooresville are being asked to pledge a portion – 75 percent – of any new tax revenues they generate to help pay for the line.
Mr. McIntosh said towns presumably have set their tax rates at a level that just pays for town services, such as street repairs, police and fire protection. If the towns agree to give up 75 percent of new revenues, won’t they be having to provide the same services with only 25 percent of the money, he asked.
“The rest of the town is going to have to bear the burden,” Mr. McIntosh said.
Ms. Henderson said each town is doing its own fiscal analysis right now to determine if they can work with the arrangement.
Once refined, the proposed changes in SADs unveiled Wednesday in Davidson would become part of the revised finance plan, and applied to towns all along the line Mr. Briggs said.
Ultimately, property owners near the rail line could play a major role in determining if the rail line gets built. Maupin Stewart asked the consultants, “What if the business owners shoot it down?”
“Everything stops,” Mr. Briggs said.
RELATED COVERAGE AND LINKS
RedLineRegionalRail.org – the project website, with the business plan and other documents, a SAD and TIF map, and answers to questions being asked about the project.
Previous coverage of the Red Line project on CorneliusNews.net
Listen to an audio replay of Wednesday’s Davidson Town Hall meeting. The first 12 minutes includes an introduction by Davidson Town Manager Leamon Brice and remarks by consultant Mark Briggs outlining changes to the special assessment district plan. Also answering questions with Mr. Briggs is consultant Katherine Henderson.
Click the play button to start. Can’t see the player or hear the audio? CLICK HERE>
(MP3, 1 hour, 33 mins)