While the BID tax narrowly passed in May 2018 with just over 50% of the downtown property owners within the boundaries voting in favor, some business owners are opposed to the BID tax and have spoken out against it in recent years. For example, if a property in the BID boundaries has an assessed valuation of $75,000, the respective property owner would pay $375 per year for the special assessment tax. Otinel Iancu is one downtown business owner who is pushing back on the BID tax, mainly due to the financial burden he said it’s caused him while trying to keep his religious-themed store afloat. For Iancu’s business, Valtiroty Shiloh’s Tabernacle, the BID tax came out to a total of $1,124.98 for 2020.
But several property owners have voiced their frustrations with the tax, some of whom cited the economic slowdown brought on by the pandemic over the past year and a half. In 2018-2019, the first full year the BID tax went into effect, there was a total of $41,386 collected. The following year in 2019-2020, just over $37,000 was collected, marking a slight decrease from the previous year. If every owner of the roughly 70 downtown properties in the BID boundaries successfully paid — which mainly entails Main Street, stretching from The Depot to the Little Caesars area — it would generate roughly $48,000 per year.
According to the BID guidelines, every downtown property located within the boundary of the BID is subject to an annual special assessment tax based on the assessed valuation of the property. Broken down further, the BID tax calls for property owners who own commercial buildings located within the boundaries to pay a special assessment tax of $5 per $1,000 of the assessed valuation. “Last year the direction not to be very aggressive on that was due to COVID-19,” Johnson said during the Sept. 7 Mitchell City Council meeting. “We really haven’t come out of that approach yet.”
City Administrator Stephanie Ellwein said the BID Board, which is made up of local business leaders and residents who are appointed by the council, has made three rounds of awarding downtown properties since the tax began in 2018. “Out of the $100,570 collected, they have awarded about $52,000,” Ellwein said. “They submit their costs, and the BID Board decides how much of the expenses they are going to cover. I’ve seen some of the applications, and some of them are not the full cost being covered by that grant.” For some of the property owners who have successfully paid their annual BID tax, the money collected has been redistributed to them, helping several property owners make noticeable improvements to the exterior of their Main Street buildings, including façade work and roof repairs.
According to the city’s records of the BID, some of the largest annual tax amounts in the BID boundaries range from $1,400 to $2,800, while some are as low as $120 to $300. The recently approved 2021 assessment shows the Navin Apartment Complex on the corner of First Avenue and Main Street is looking at a $2,743 assessment tax, while the Midtown Plaza building on Main Street sits at $2,883, which are among some of the highest amounts in the BID boundaries. “How do we revitalize this area if we add a burden that is already high? For example, I’m paying almost $5,000 in taxes already. Now you want to add $1,400,” Iancu said to the council during the Sept. 8, 2020 council meeting.
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