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City Council votes in favor of tax district in second public hearing

BY ASMAA ELKEURTI | NOVEMBER 02, 2011 7:20 AM

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Local Iowa City business owners urged Iowa City officials to support a proposed tax district plan.

"I don't know of any other way I could pay so little — just a few hundred more than my Downtown Association dues — and get so much value, especially with such strong support from the University of Iowa," said Bill Nusser, the owner of Hand's Jewlers, 109 E. Washington.

After hearing from representatives of downtown, the Iowa City city councilors unanimously agreed upon a 4-0 vote regarding the Self-Supporting Municipal Improvement District on Tuesday.

The council held the second of three public hearings required to pass the tax, with Councilor Terry Dickens absent, and Councilors Matt Hayek and Connie Champion abstaining because of conflicts of interest.

Many business owners believed establishing a such a tax district, which would tax businesses at a rate of $2 for every $1,000 in taxable value, would greatly benefit downtown and the North Side Marketplace. The University of Iowa also agreed to annually contribute $100,000 to the district.

Money from the levy would then go to improvements and marketing for downtown and the North Side, said Wendy Ford, the city's economic-development coordinator. A majority of the revenue would allow the district to hire a business development manager and an assistant business manager.

"I think this is going to be a win for downtown Iowa City," said Councilor Mike Wright. "This has my wholehearted support."

The tax alone would generate $240,000 a year for the district, not including the university's involvement, Ford said.

Karen Kubby, the chairwoman of the Downtown Association's tax-district committee, appealed to the council in support of the district.

The committee originally intended to implement the tax until fiscal year 2013, but will now move forward with plans this January.

"We pledge to work hard and ensure success, but we need your votes to make it happen," Kubby said.

A petition signed by 40 percent of business owners within the district was submitted to city council in August, going beyond the required 25 percent required for consideration.

The Planning and Zoning Commission voted in favor of the proposal mid-September after the required petition signatures were collected.

The Iowa City Chamber of Commerce also supported creating the tax district.

"Our downtown is right for more development, retail, and owner occupied housing," said Rebecca Neades, a member of the chamber.

The next hearing will be held on Nov. 22 with the final hearing taking place Dec. 6. Opposition has been voiced against the ordinance, and a counter petition was filed by the City Clerk Oct. 27.

Roughly 17 percent of business owners have petitioned against the tax district, Ford said, and they own 21 percent of property values.

In order for the proposal to be dismissed, a protest petition must be signed by 40 percent of property owners with 40 percent of the assessed value and is submitted before the ordinance passes.

If passed, the tax would be tried for four years. If the levy proves successful, it may be renewed after the initial period.


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