The Downtown Detroit Partnership is asking downtown property owners to form a business improvement zone and tax themselves to fund an entity that would have a $4 million budget to pay for things like downtown cleanup, beautification and safety.
“These services have been paid for by the generosity of a few businesses and organizations, and now it’s time to expand,” said Dave Blaszkiewicz, president and CEO of the DDP. “We want to bring consistency across the entire district and add some new bells and whistles.”
The zone’s proposed boundaries would lie roughly between the freeways — I-75 to the north; I-375 to the east; M-10 to the west — and the Detroit River, and would impact the 253 commercial property owners in that expanse.
For the zone to happen, 60 percent of those property owners would have to vote to approve both the entity and the tax levy. The funds would be collected by the Detroit Treasury Division but could be used only for downtown improvements.
Owner-occupied residential and non-taxable properties, such as those owned by nonprofits or government entities, are exempt from the program. However, large apartment buildings with rental units would be assessed.
How much a property owner would pay is based on floor space (60 percent) and assessed value of the property (40 percent), Eric Wilson, planning and development manager for the DDP, told Crain’s reporters and editors Tuesday afternoon.
With that formula, the 30 largest downtown property owners would pay more than 75 percent of the expected annual budget, Wilson said. More than one-third would pay less than $1,000 per year.
How the money would be spent is yet to be determined because the budget would be developed by a governing board that will have no more than 15 members. However, it is anticipated that safety and hospitality ambassadors would be added, and that a permanent source of revenue for the Clean Downtown program would be created.
Currently, Clean Downtown — which, since its creation in 2006, has picked up 3,500 tons of trash — is privately funded through donations from downtown businesses. Through a business improvement zone, dollars for cleaning and safety would be raised from all property owners and spread out beyond the current concentration around Woodward and Jefferson avenues.
“We are hand-to-mouth with so many of our programs,” said Blaszkiewicz. “The businesses want consistency in services. If you look at downtown, it’s like a bell jar, with most of the efforts concentrated around Woodward Avenue. We want to be more consistent in our efforts.”
A similar effort failed in 2003, but Blaszkiewicz said 10 years has made all the difference. The economic environment is better, for one, and the businesses themselves have evolved.
“We had 80 percent vacancy then,” he said. “Think about what property owners were facing in 2003 … it’s very different than today. Instead of catching them on the downswing, we are catching it on the upswing. And there is greater cooperation among the big companies. There is a totally different and better business leadership.”
The DDP is circulating a petition to the commercial property owners, asking them to start the process of developing the zone. It needs at least 30 percent of eligible property owners to sign the petition, something Blaszkiewicz said they are close to achieving.
After that, a public hearing will be scheduled, and the Detroit City Council and Emergency Manager Kevyn Orr will review the issue.
Blaszkiewicz said six members of the council have indicated their support for the proposed zone. Meetings with the three other members are expected soon, he said.
If the petition passes those hurdles, the Detroit city clerk would mail a ballot to all eligible downtown property owners. At least 60 percent of the weighted value of the property owners — based on that 60/40 split — must agree to the zone.
That vote is expected as early as April.
Source: Crain’s Detroit Buisness