by Nat Frothingham
As president of the board of directors of Montpelier Alive, Greg Guyette champions downtown Montpelier. In this question-and-answer exchange with The Bridge, Guyette explains what a Downtown Improvement District (DID) is and how such a district, if it wins approval on March 5, would work and would be funded.
On Town Meeting Day, Tuesday, March 5, Montpelier citizens will vote on Article 15—a proposal to establish and fund a DID.
What is a Downtown Improvement District? I know such districts are in place in other Vermont communities. How do such districts work in practice?
A Downtown Improvement District is a geographical area within which additional tax dollars are raised and spent for the benefit of the properties and businesses located within that area. In Montpelier, the proposed district has the same boundaries as the existing Designated Downtown. Each of the existing improvement districts in Vermont operates differently, based on local agreements or ordinances. In Montpelier, the DID funds will be collected along with municipal property taxes from commercial property owners and from the state of Vermont through increased PILOT payments.
What’s the benefit that you see from a Downtown Improvement District in Montpelier?
Montpelier has never had a dedicated budget for enhancing our streetscape and strengthening our business climate. The DID budget will fund highly visible improvements to the downtown landscape and promote Montpelier regionally as a special destination to live, work, shop and vacation. The promotions will promise a special experience in Montpelier, and the improved streetscape, in addition to our collection of distinctive shops, restaurants, hotels and inns, will help us fulfill that promise.
How is such a district formed? In other words is it a vote of City Council followed by approval of city voters? Is that what gets a district going?
Yes, that is essentially the process. City Council has given their approval for the Downtown Improvement District to appear on the March ballot based on its merits and on support from stakeholders within the district. On Town Meeting Day, the voters in Montpelier will be given the opportunity to vote on the DID [Article 12]. We feel confident the measure will receive broad
What sort of money will a district in Montpelier raise and how will that money be spent and who will watch over the finances to make sure they are wisely spent?
The district will raise $75,000. The budget will be drafted by the DID committee and will be presented to Montpelier Alive and the City Council for approval. Important to note: the committee will be comprised of property owners, retail shopkeepers, restaurateurs and representatives from the lodging community, the arts community, and from the state of Vermont. These folks are vested stakeholders and know best how to make strategic spending decisions that will benefit the downtown.
Am I right in thinking that the voters at city meeting will vote on whether to form a district and to appropriate money for it but that only ground-floor commercial properties in the district will pay for it? If this is the case, is it fair for voters who will pay nothing to vote an added tax burden on ground-floor commercial properties who will be obligated to pay for the added money?
We have been asked this question in many forums and the simple answer is that this is the mechanism that the state of Vermont legislature established, and it is a framework we must work within. The assessment is on commercial real estate, exclusive of all residential properties. In terms of “the many” voting to tax “the few,” we asked the stakeholders to weigh-in on the DID and by a nearly 3 to 1 margin, they support this investment. We asked property owners and merchants, and the response we received is that this investment is necessary to maintain a competitive downtown. I think that is the key; this is an investment that we fully expect to pay dividends back to the funders. Montpelier Alive pursued this measure as a means to support a vibrant downtown and a dynamic business community, and that point should not be lost in the conversation.
We haven’t had such an improvement district in Montpelier in previous years, and yet somehow we got the planters, we got the waste receptacles, we got the banners. What changed? Why do we now need to raise additional money?
That is a great question. Yes, for years we have walked the streets, hat in hand, asking for donations for special projects or funding them through small Montpelier Alive operating budgets. However, the Montpelier Alive budget is stretched between festivals and events, streetscapes, special projects and myriad other downtown financial demands. We have not printed banners in years; they are expensive. We are limited in our ability to place holiday lights; they, too, are expensive. After many years of replacing the old plastic trash barrels with the nice steel waste and recycling containers, we are only a fraction of the way through that replacement process. This tool, the DID, provides a dedicated and predictable funding stream with which we can make an immediate impact and step up our downtown investment. Unlike many items taxpayers fund, the DID will present immediate and noticeable results that we will all enjoy and benefit from.
Do you see an appropriation for a Downtown Improvement District as a one-time event, or will this appropriation be put before the voters year after year and become another added tax on the business community?
This tax could be put before the voters year after year as it is in some communities, and it is supported year after year in those communities. However, we would likely seek council approval for a charter change, providing long-term predictability for the DID committee. It is very important to understand that buy-in from the business community is essential to our efforts. We will be talking with them; we will be asking for their ongoing input, and if they see increased foot traffic, increased sales and a more vibrant downtown, we are confident that they will support the ongoing nature of the DID.
What is the most compelling reason in your mind why a Downtown Improvement District should be approved?
We live in an ultracompetitive marketplace. The online threat to brick-and-mortar business grows every year. To survive, to thrive, we need to grow our market share, and that means new bodies, new feet on the street. We have a Super Walmart coming to Berlin. We have a neighbor six miles to the south that has invested heavily in their downtown: Waterbury has just completed a fantastic rebranding of their downtown, and they are poised for growth. This is not the time to be complacent; this is the time to invest intelligently to reinforce our position as a hub for regional business, and that is what we are doing.
Are you confident that spending money to advertise downtown Montpelier in out-of-state publications is a good idea? It can be argued that you can spend a lot of money on such publications with very little results, certainly very little measurable results. How will you measure the results of such out-of-state advertising for downtown Montpelier?
Again, spending decisions will be made by the committee. If the business owners on the committee do not feel that there is substantial opportunity to draw visitors from Montreal, Boston or Hartford, they will not invest there. I believe in the power of promotion when it is supported with substance. The DID will likely provide both.
Why institute a Downtown Improvement District? Why not just raise the needed money by canvassing City Council, the downtown merchants and others, including Montpelier residents, who may be willing to support downtown development efforts? Why restrict the fundraising to downtown commercial properties? Why not have a more general public campaign for support? After all, a strong downtown benefits everyone in the city, not just people who have a commercial interest.
We have worn out our shoe soles for nearly 20 years canvassing downtown for money. And at the end of the day, the same loyal group of business owners steps up to support us. But, we can only ask so many times over the course of the year. The DID spreads the cost of improvement and promotion over the entire district, so that all beneficiaries will contribute, including the state of Vermont. The state will contribute roughly 40 percent of the DID budget. It was very important to us in the planning stages that this investment not be overly onerous on the individual shopkeepers. In the models we ran, we determined that the cost for a typical downtown store, if the landlord passes the cost along, will be in the $10 to $20 per month range. And, again, this added expense will be invested, and it will deliver returns. We could have asked the city for an allocation from the General Fund, which would have effectively taxed the whole city. However, the downtown stakeholders have an opportunity to increase revenues and profits from this investment, and they have indicated that they support this measure, so we did not feel that the citywide tax approach was the right strategic decision.