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IN THE NEWS

Updates on Op Eds and other ideas published in local media

 Is there a future for local improvement districts?

By John Mannillo, August, 2023

How can Saint Paul attract new private investment to its Downtown? How can we attract more vitality, more people and spending? After the pandemic, cities throughout the country are struggling with the same problem.

I was disappointed but not surprised at the decision not to extend the Downtown Improvement District (DID), further west to include the West Seventh Street area. This occurred after some of the restaurant property owners changed their minds on the idea of joining an expanded district, that would be under the direction of the Downtown Alliance.

The DID, operating as a separate entity, under the control of the Alliance has been established to improve the central core of Saint Paul’s Downtown. It is funded through self-assessments by commercial property owners, within a defined area. Some of the benefits the DID provides these owners, are a group of hired ambassadors who welcome visitors, help the public with different problems, remove graffiti and pick up trash. There is also an enhanced system of public security over and above normal city policing. There is a long list of other services and capital improvements that could also be provided.

So why did this fail to gain the support of the property owners on West Seventh Street?  A short answer is a lack of trust that those owners of commercial properties have in the Downtown DID. How would the Alliance use the funds paid for by the restaurant owners? Would those improvements really benefit the restaurants?

The idea behind a self-assessment is that it should not be a tax, but an investment. It should result in a return greater than their total expenditure. When an assessment district gets too large, payments start to turn into a tax. Taxes pay for all kinds of things, often not to the specific benefit of everyone being taxed. Most people already think their taxes are too high and that this would just add to the problem.

So, what can solve much of our need for vitality Downtown?  I would think the most important goal needs to be new investment.  We should not push for larger districts but rather more investors. This will only happen if those investors see a clear rate of return.  They must trust the system. This can happen if they control their own invested funds, and in turn, provide the needs specific to their properties. Greater returns can be accomplished with the economies realized by organizing other owners who want the same efforts and positive results. Therefore, the smaller, more focused district is a better option. More and smaller improvement districts are better than larger ones.

To sustain support of improvement districts and the respective property owners, they must be structured upon independence. This means their ability to spend their funding on what they believe they need.  A district can hire who they think will do the job.  This can include the Downtown Alliance, but still under the control of a specific district.  Over time, becoming comfortable between districts may make it possible for districts to join together. 

The Lowertown Future Fund, Inc. is exploring this same approach for Lowertown residential condo owners.  These Lowertown residential owners have very similar concerns. Their goal is to make their neighborhood a more desirable place to live which will also increase their property values. This is very different focus than office building owners, whose occupants are on site up to five days each week, 9 to 5. Even apartment building owners have a somewhat different focus than Condo owners. Another separate improvement district for these apartment building owners could serve their specific interests. All separately controlling their self-assessed funds.

A majority of any specific class of property owners which would establish a district, has to agree to be self-assessed at a predetermined rate. The rate for each owner would be determined by the value of their specific property. The assessed property owners would elect a Board of Directors of residents from those assessed, to determine how to use their funding and create any future rules.  The district can be set up to be re-established by vote at a future date.

One important need that is lacking is the support of City Hall for more, smaller improvement districts.  The City Council needs to approve any new assessment districts, and therefore attract new investment. City Hall needs to make the Downtown residents, partners in Downtown’s future.

John Mannillo

President, The Lowertown Future Fund, Inc.

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Lowertown St. Paul residents want an improvement district of their own

They want an improvement district with a mission beyond businesses.

 

By James Walsh (https://www.startribune.com/james-walsh/6370562/)

Star Tribune OCTOBER 23, 2021 — 4:58PM

 

Chris Thomforde is one of more than 10,000 people who call downtown St. Paul home, with a townhouse overlooking the small green gem of Lowertown's Wacouta Commons Park. Like many, he's encouraged by the progress made in safety and cleanliness in the nearby Downtown Improvement District.

 

So much so that he and other Lowertown residents are exploring forming their own Residential Improvement District to boost after-hours security and community in their neighborhood.

 

"I think [the Downtown Improvement District] is a great thing," said Thomforde, former president of St. Olaf College. "But a Lowertown residential district would give people who own housing their own voice, for their own priorities."

 

After years of discussion, a group of downtown St. Paul property owners now pay into a special improvement district that funds a public safety communications center, neighborhood ambassadors and other amenities in an area that encompasses many artistic, cultural and entertainment venues, as well as corporate headquarters for Ecolab, Securian Financial and Travelers. Business owners in the district are expected to pay about $1.2 million toward improvements next year.

 

City and business officials credit the district, and the street teams it pays for, with putting a dent in downtown crime as well as spiffing up parks and properties. It's no panacea, however. Money raised by the district goes to services that are additional to what the city provides. And after a recent mass shooting near Xcel Energy Center, some downtown business owners say the city is not doing enough to ensure the safety of workers and visitors.

 

John Mannillo, a commercial real estate developer and longtime Lowertown champion, said downtown's surge in residents over the past decade — especially in Lowertown — makes it even more important to consider an improvement district focused on the unique needs of residents. Proponents are tapping about $300,000 left over from the Lowertown Future Fund, which was dedicated to helping foster development there.

 

There are approximately 4,300 Lowertown property owners, Mannillo said.

 

Proponents have completed a feasibility study in which Lowertown residents were surveyed and expressed support for an improvement district — provided they have a say in what their assessments pay for. The next step is to hire someone to shepherd the idea through the statutory and approval process, Mannillo said.

 

State law details the formation of business improvement districts, although there appears to be no prohibition of residential districts.

 

"We will hire someone to push this. We're talking to people now," he said. "We could start some of the benefits right away. Our plan is to use what we have right now to improve Lowertown."

 

Joe Spencer, president of the St. Paul Downtown Alliance, said there is interest in a residential district for Lowertown. But he said he thinks residents should give the business-driven development district more time to ripen before potentially siphoning away support by launching an effort of their own.

 

"I think it makes the most sense for us to think about our downtown being one downtown," Spencer said. "These services are really valued by all members of the community. However we grow these kinds of things, we should do it in a way that is unified and coordinated."

 

City Council Member Rebecca Noecker, who represents downtown, said she has talked to Mannillo and others about the idea. But she said she would rather residents and downtown businesses work together to find common ground than launch separate efforts.

 

"We don't want to splinter the message," she said. "Coordination is almost always more efficient."

 

She wondered if there are ways the existing downtown improvement district could be more inclusive of residents' concerns.

 

"The question would be, what are the specific services that residents need that commercial properties don't?" Noecker said.

 

But Mannillo said residents don't trust business leaders to adequately address their unique concerns.

 

"For years, whenever there is an issue downtown, it's been decided by what the commercial owners want. [Residents] don't have a political voice," he said. "We want to complement the [Downtown Improvement District]. We don't want to compete with them or hurt them in any way."

 

Merritt Clapp-Smith, a consultant and former city planner who produced the residential district feasibility study, said the needs of downtown's residents are increasing as the area's population grows.

 

Lowertown residents want parks to be more than a place to have lunch during the workday, she said. They want safe spaces where children can play pickup games, where they can walk their dogs or fire up the grill.

 

They also want to connect with their neighbors, to hold block events or coffee meetups and small evening gatherings. And they want more emphasis on security, but with empathy for the unique challenges of people who are homeless or grappling with mental illness.

 

"A Residential Improvement District for downtown St. Paul is an exciting and important opportunity that should be given open and thoughtful consideration," Clapp-Smith said. At the end of the day, said Lowertown resident Thomforde, what residents want and what businesses want differ on one important point: "I'm still here after 5 p.m."

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