EDITORIAL: Downtown tax proposals make sense, if coupled with public safety improvements

We’ve heard worse ideas, and they can’t hurt, not too much anyway.

Albuquerque city and business leaders are proposing a series of tax initiatives in hopes of changing the economic landscape of Downtown. In layman’s terms, making it safe to have a beer Downtown again without the heightened risk of getting shot, as one Downtown property owner recently put it so bluntly.

City officials are planning to implement a Tax Increment Financing, or TIF, district in Downtown Albuquerque. They also plan to urge business owners in the Downtown area to re-establish a Business Improvement District, or BID.

Both are taxing mechanisms widely used in other cities across the nation to boost commercial efforts, and both mechanisms have either failed, succeeded, or had little effect in other cities.

Paul Gessing of the Rio Grande Foundation and Douglas Peterson, the largest property owner in Downtown, explained both taxing mechanisms well in a joint op-ed in the Sept. 15 Sunday Journal.

A TIF allows tax revenues to be focused on a targeted area. However, properties outside the TIF subsidize it by paying taxes to support government services in the TIF district.

City officials estimate a Downtown TIF could produce roughly $200 million over 20 years. A Downtown TIF would shift tax revenues from other areas of Albuquerque to Downtown. It’s a trade-off, plain and simple, shifting revenues and resources from one part of the city to another.

“What’s great about the 20-year growth timeline is we can plan; we’re not living year to year by the budget we’re given,” said Terry Brunner, director of the city’s Metropolitan Redevelopment Agency. “We can see into the future how much revenue is coming in and then anticipate the opportunities that are Downtown that we can invest in.”

A business improvement district is much different. A BID, as Gessing and Peterson explained, “is a privately managed governance tool whereby property owners vote to agree to pay additional ‘taxes’ in order to have some kind of private sector involvement that does things government can’t or won’t do. In Downtown this has typically meant cleaning up trash and provision of other supplemental services.”

Peterson, an attorney and outspoken critic of the Keller administration’s handling of Downtown, knows a little about BIDs. He is a two-time member of the former Downtown BID’s management agent, the “Downtown Action Team.”

Peterson and Gessing are skeptical of imposing additional property taxes onto Downtown property owners without first resolving crime and vagrancy.

“The former Downtown BID failed because it built a hierarchical, wasteful administration, including Keller fundraiser Brian Morris as the Executive Director, and spent more money throwing parties and holding nonsensical meetings than improving public safety,” they wrote on Sept. 15.

Peterson and Gessing are calling for Mayor Tim Keller to “get tough on crime Downtown and elsewhere,” saying the market for office, retail and restaurant space in Downtown is “soft to say the least.” They are also appealing to the governor and Legislature to do more to diversity New Mexico’s economy, but we can’t wait a decade or more for state lawmakers to rescue the Downtown and make it a destination more than a place people avoid.

We’re going to have to do it ourselves, and Mayor Keller gets that.

“Downtown has to save itself, but we’re going to help,” Keller said at a news conference last month. “And we’re going to put skin in the game, and we’re going to be there because we’re part of Downtown.”

The Greater Albuquerque Chamber of Commerce made a great point in a Sept. 19 op-ed when chamber leaders said “Thriving American cities generally have thriving downtowns.”

Put another away, decaying cities always have decaying downtowns.

“Successful downtown areas provide a city’s residents with comfortable and trendy urban housing, a dense economic base with significant public and private sector jobs, and recreational opportunities – including great places to eat, shop, and enjoy art, culture, sports or music,” chamber leaders wrote on Sept. 19. “The economic benefits of a thriving downtown are felt citywide, producing significant concentrated revenue and playing a key role in attracting visitors – business and personal.”

There’s no denying any of that.

However, the chamber also acknowledges that Downtown must become “a safe and welcoming place for residents, visitors, workers, and businesses alike” to make significant investments in housing, infrastructure, amenities, and attractions possible.

It is indeed a chick-and-egg situation. Which will come first, public safety or economic investment? The chamber, and Gessing and Peterson, are correct. We must have both, and simultaneously.

That is why we support both the proposed TIF and BID. While shifting resources from other areas of the city to Downtown is fundamentally unfair, we’ve got to try something.

Capturing more of the tax revenue produced in Downtown and re-injecting those funds into public and private Downtown development projects could catalyze Downtown growth. Downtown is something we all should be willing to invest in. It’s the heart of our city and reflects on all of us.

And BIDs are, as the chamber notes, a national best practice relied on by most successful cities in the United States.

“Under a BID, downtown property owners organize and equip themselves with resources to uniquely promote and beautify downtown, support and plan events, add targeted security, create recreational opportunities, and more,” chamber leaders wrote.

And as Brunner noted, a BID allows businesses to run their own services, such as parking, marketing and security, creating greater buy-in.

“(B)usiness owners and property owners can petition the city to do a study and create a Business Improvement District, and then assess a fee across those property owners that that group of property owners then can use in their own interest to promote their businesses,” Brunner explained. “It’s really, in a sense, a business rights-, property owners’ rights-kind of organization.”

Empowering Downtown businesses to improve their lots with specific services will create more buy-in, and hopefully produce less finger-pointing. But without real improvements in crime and homelessness, and enhanced laws to keep dangerous criminals and repeat offenders off our streets, neither a TIF nor a BID will matter much.

Nonetheless, a Downtown TIF and BID are solid proposals if coupled with public safety improvements. And saving our Downtown is worth the effort.