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BACKGROUND

 

Business Improvement Districts (BID) have been in existence since 1969, providing a mechanism for them to purchase services beyond what a city can afford to provide.  BIDs are defined as private organizations authorized by municipal or state law, by request from a group of business owners in a specific neighborhood.  The power is granted for the BID to collect payment for the operation of the BID for multiple uses: security, side-walk cleaning, street lighting, signage, marketing, security, as well as other uses determined by the BID.  Today, there are now over 1,500 BIDs in existence.

Improvement districts are a popular tool in downtown areas across the nation to enhance the level of services needed for dense centers of commerce and living.

In 2020, the Saint Paul City Council approved a Downtown Improvement District (DID) a form of a BID, for the central and western area of downtown, which generates annual revenue for investments and services from different commercial property assessments. However, under Minnesota statute, the DID cannot assess residential properties, which form the majority of eastern downtown.


A Lowertown Residential Improvement District, based on residential assessments, could fill this gap in the downtown geography and provide services for the lived experience of Lowertown’s diverse population.

What are Improvement Districts?

A Residential Improvement District (RID) could serve as a way for Lowertown to increase services for those who live in the neighborhood. It could also provide additional services the City government can’t. 

 

The creation of the Lowertown Residential Improvement District (LRID) could take place through legislation and with municipal action by the Saint Paul City Council.

 If passed, we believe it would be the first of its kind in the nation.

Making the case for a Residential Improvement District

How Does it Work?

 

Members of a Business Improvement District (BID) pay an additional fee for the common services they want that the City can’t or doesn’t provide. These fees, or assessments, create a new source of funding for local improvements.

Tax vs. Assessment

 

Whereas, a tax is money used by a municipality to pay for everything the municipal government does, a BID assessment becomes a direct benefit to those assessed.

Assessments through a Residential Improvement District could supplement services provided by municipalities or address specific needs expressed by residents that can not be met through a BID.

What can a Lowertown Residents Improvement District do for you?

Community members want a voice at the table. Residents feel like other entities aren’t representing their interests. LRID would position them as investors. Their voices would matter. It creates an opportunity for residents to have expanded investment, ownership, and voice in their neighborhood.

Examples of Services

Creating a residential improvement district could increase property values resulting from an improved public realm and neighborhood activities.

  • Improved neighborhood security

  • Serve parallel existing entities that serve downtown’s business interest

  • Create activities for residents

  • Both business and residential districts would collaborate to improve service delivery, effective and efficient use of resources

  • Serve as a platform for Lowertown RID investment concerns

 

Timeline & Goals

  • Mobilize Lowertown residents to petition the City of St. Paul’s Mayor’s office and City Council to create an ordinance for a residential improvement district

  • The creation of the association along with a board of directors, recruited amongst residential stakeholders, to manage the RID

  • Host a series of listening sessions and focus groups for residents to share their vision for Lowertown and learn how they can become involved

  • Create database consisting of Lowertown residents who are renters and property owners

Our goal is to ensure property owners and residents are empowered to decide the direction and future of their neighborhood and become fully vested stewards of downtown Saint Paul.

FAQs
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Frequently Asked Questions

  • What are the specific advantages and disadvantages of the proposed Residential Investment District for Lowertown?
    A Residential Investment District is a direct way to protect and improve the value of one’s property by making the neighborhood more livable. It will also promote a sense of ownership. One advantage is being able to invest in Lowertown as residents themselves, see best. The number one advantage is the LRID would be under complete control of the property owners of Lowertown through Board members they elect to the board to operate the LRID. A disadvantage to special assessment districts (in this case an investment district) is organizing, paying for the start-up costs, and gaining approval. However, in this case, the LRID's organization costs are funded by LFFI. A more specific disadvantage of the LRID is confusion with the LFFI. The two organizations are separate. Hopefully with the LFFI going away, and the LRID becoming established as a separate entity, any confusion will be eliminated.
  • What’s the City of Saint Paul’s involvement?
    St. Paul City Council must approve the initial establishment of any assessment district, after which, all use of the funds within the law, is with the Board.
  • Business Improvement District v. Residential Improvement District?
    The major difference is the Business Improvement District (BID) was established with the interests of commercial building and non-residential property owners. The establishment of an LRID would be to provide goods and services for the residents of Lowertown, regardless if they are owners or renters.
  • How was the LRID feasibility study funded? What is the scope of the study?
    The money for the feasibility study came from the LFFI. The scope of the study was centered on a series of interviews with Lowertown stakeholders (owners, businesses, residents) to explain the concept of a LRID and solicit their input.
  • What is the background of the LRID?
    In 2007 when the Lowertown Redevelopment Director, Weiming Lu retired, the remaining assets were used to fund a donor advised charitable fund - the Lowertown Future Fund (LFFI) administered by The Saint Paul Foundation. John Mannillo was an original Trustee of the LFFI and became its chairperson. By 2021, the fund granted most of its endowment to its mission of building community in Lowertown. Rather than liquidate the remaining funds, Mannillo decided to establish a charitable organization to create a sustainable effort that would continue to build community in Lowertown.
  • Can these two separate entities cooperate on a mutually beneficial project?
    Yes! There are potential opportunities to cooperate on a mutually beneficial project.
  • Who is John Mannillo and what is his interest in an Improvement District?
    John Mannillo is a retired developer, real estate broker, as well as a building owner and manager in Lowertown since 1976. In 1989, Mannillo raised funding to rebuild Mears Park, and then Chaired its Development Task Force. He also organized a group of residents to help care for the park. Today, Mannillo is no longer an owner of any property in Lowertown, but he serves as Co-Chair of the Friends of Mears Park. John first proposed a Business Improvement District for Downtown St. Paul about 20 years ago. There were already over 1500 successful improvement districts around the country. He saw the success of a similar public investment in Mears Park and supported the concept for the commercial building owners in the center of Downtown. His vision is to structure a similar, but residential district in Lowertown. An initial burden for Improvement Districts has been the initial costs to establish them. Legal, education, marketing and final agreement can be expenses that property owners usually pay for. In this case, the Lowertown Future Fund, Inc. would pay for these costs.
  • What is the vision for LRID?
    It's important to understand that the benefits to be gained for residents through an LRID would be based on a decision by the residents themselves. Drawing from the feasibility study, some of those benefits include having a stronger voice with the City. As investors with money to spend, their voices and decisions would matter. Additional benefits include: Increased marketability and property value. Create a new source of funding for local improvements. Through consensus, residents can decide to purchase what they deem as a benefit to their community. Agreeing to partner with City funding for improvements can leverage more investment dollars. Charitable foundations may also participate in helping fund an organized neighborhood improvement.
  • Who has authority/control over the Board?
    Statutory Law controls the rules of operation. The Board controls all decisions within Statutory Law. The LRID is independent from other organizations, including the Downtown Improvement District and the City. The LFFI is only involved in the initial establishment of the LRID. Being totally independent, the LRID is assured there are no influences on the decision making of the LRID steering committee or board.
  • Who has representation? Assessment costs to be based upon? What are the assessment costs? Will there be specific representation of different groups on the Board?
    Board representation will be determined prior to the initial approval of 50% of the Lowertown property owners. It will be structured to fairly represent all those who self-assess as owners. Costs will be determined prior to the vote to establish the district. Costs are based on Ramsey County property valuations, billed twice a year through property tax invoices. 100% of funds collected by the county will be returned to the LRID.
  • What are the benefits and goals of the LRID?
    Sustainability was a goal in creating a Residential Improvement District. Property owners would contribute annually to improve the neighborhood with services and capital improvements the City would not provide through property taxes. This would improve living conditions and, in turn, property valuations.
  • What are examples of benefits to Residents?
    Below are just a few examples of the benefits of an LRID... Enhanced security and safety patrols Cooperate with the DID to enforce accessibility and safety of the skyway system Active representation at the St. Paul City Council Steps to avoid a homeless and panhandling problems in the area Public toilets Provide dog walking areas Enhanced wayfinding and event notices Public Art Holiday lighting and other seasonal amenities Musical and other programs in Mears and Lowertown Commons Parks Beautification projects including shoveling crosswalks Graffiti, liter, and pigeon dropping cleanup Improvements to special lighting, green spaces, and streetscapes Volunteer recruitment and coordination Social capital building for Lowertown residents Partnerships with Lowertown businesses Information sources regarding issues of interest to Lowertown residents Improved public transportation and public parking implementation Expand Farmer’s Market to other parts of Lowertown Neighborhood and business marketing and image making
  • Who is involved in the LRID?
    John Mannillo and Jack Hoeschler (d) were directors of the LFFI. It is a 501 C-3 corporation. Reverend Bill Englund has now replaced Jack Hoeschler on the Board. Mannillo and the Directors are not paid for their services. It’s important to note the LRID is a concept being created. If an LRID is established, Mannillo and Englund will not be part of the LRID Board. The LRID will elect its own Board of Directors from participating property owners and from predetermined categories of ownership and residency. Other persons involved at this time are the Project Manager and ambassadors of the LRID concept. We contract with other organizations to do certain work. The LFFI is involved in the initial establishment of the LRID. Being totally independent, the LRID is assured there are no influences on the decision making of the LRID steering committee or board.
  • What is the definition of a Lowertown Residential Improvement District?
    Under Minnesota Law, a residential improvement district would be known as a Special Service District according to MN Statute 428a. A Special Service District is defined as: a defined area within the city where special services are rendered, and the costs of the special services are paid from revenues collected from service charges imposed within that area.
  • How will the LRID be structured?
    The LRID is in the process of creating a steering committee through recruitment. This committee will help determine: The strategy for the LRID to help create funding formulas. Create a list of goods and services the LRID could provide. Identify options for board structure and membership. Prepare information on the LRID on assessment and service delivery. Proposed operation and structure of the LRID. The steering committee for the LRID would be the ones to establish the rules the questions below ask. Only the property owners of Lowertown will elect the LRID board. The LFFI is only helping guide the initial process. The LFFI, Project Director, nor any staff will not be members of the Board. Only property owners will be eligible to vote or serve on the Board of Directors. The initial structure will be subject to sunset after 5 years. It will have to pass another vote to re-establish.
  • Silent supporters? City? CRC?
    We don't want anyone to be silent about either support or questions regarding the LRID. There has been considerable support, in principle, from institutions and businesses in Lowertown.
  • What are the generic benefits and detriments of such?
    The generic benefits of an LRID under MN law include being able to initiate improvements within the district. Contemplated improvements include both services and capital in nature. Improvements will be of a common benefit - not to any specific properties. The purpose of establishing a special services district is to provide goods and services the City doesn’t provide from its general fund.
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