“I can’t tell you there’s a flower hanging in front of every business or there’s an event in front of every business,” Downtown Sioux Falls President Dan Statema said. “What I can tell you is that all these things together have an effect on the value of downtown.”
As I reported, DTSF is awash in money from special assessments. And the Gargoyle Leader finally woke up from their two-week sleep and reported on the story today;
A Sioux Falls real estate firm is suing the city over a special assessment collected each year to pay for the operations of Downtown Sioux Falls.
Ronning Cos. calls its $6,500 bill an unconstitutional tax because it receives nothing tangible for paying the organization behind Hot Summer Nights, First Fridays and the Parade of Lights.
While I don’t have a problem with a special assessment for businesses that might gain something from DT entertainment or niceties, I do think it is a little ridiculous to charge a glass shop and apartment building for this stuff and councilor Anderson agrees.
Councilor Kenny Anderson Jr. wasn’t entirely convinced. Businesses such as Glass Pros deserve to have the option of opting out, he said. Anderson was the only councilor to vote against the yearlong contract.
“I wanted to know what services they get for their dollars, and I didn’t get an answer,” he said.
Anderson said he supports downtown improvement but needs to know things are done fairly.
“If we’re going to have a partnership between Downtown Sioux Falls and the city, I would like to make sure things are operating above board,” he said.
There should be an opt-out. Chalk-up another unconstitutional practice by the city and their Home-Rule government.
This story for me was a real head scratcher. I had no idea stuff like this was going on. This is nothing more than an extortion scheme, with Statema being the bagman for this mafia like protection racket. And our own version of the mafia justifies their collection scheme by saying property values have gone from 138 million to 221 million in ten years? Now I know why I pay twice as much for a beverage downtown as I do anywhere else. What DTSF or anyone else says the value is, and what you might actually get for that property are two completely different things. Especially when we all know those values are inflated because of the carrot on a string hope that SOMEDAY downtown will be graced with an “Events” center. An “Events” center that might or might not average 30% of it’s seating capacity over a years worth of entertainment.
And no way should a glass company be assessed the same way as Minervas. These places, if they need be assessed at all, should be on gross receipts over and above a normal evening after an event like Hot Summer Nites.
l3wis, is the city in partership with DTSF?
Yeah, read the story;
“Owners of businesses and multifamily housing units within the downtown Business Improvement District are assessed every year at a level based on property values, and the money is given directly to Downtown Sioux Falls. The 2011 assessment amounts to $152,500 of the organization’s $650,000 budget.”
They should simply designate which types of businesses fall under the special assessment and which do not, and perhaps re-draw the downtown boundaries. Clearly a glass shop or a residential community is not benefiting from the expense they incur, while Minervas, Skelly’s, the Diner etc all do quite well.
Then again you could say the same for the various banks and insurance companies and lawyers offices downtown as well. How do they benefit from DTSF when those offices are typically closed when all of these events occur?
However – once again l3wis I believe you (and Ronning) are using the term “unconstitutional” incorrectly. I’m guessing with somewhere north of 60 lawyers holding office in the region called “downtown” one of them might have piped up by now if that was really the case. This isn’t a Constitutional argument… merely a fairness issue. They are going to have to do a lot of fancy dancing to explain how it relates to the Constitution but I wish them all the luck.
$152,000 is peanuts when you consider what the entire downtown core is assessed at. And it isn’t aimed at the business owner, it’s aimed at the property owner.
It’s the same reason you buy a condo and pay a HOA assessment. Someone else maintains the property and ensures it doesn’t deteriorate and lose value. DTSF is marketing the entire area and trying to drive people down there. Part of that effort involves doing things the City doesn’t, like the flowers. Maybe some folks will decide to partonize the glass company and/or move into an apartment down there as they take in Sculpture walk.
And Costner’s correct, if this was remotely unconstitutional you’d have seen action already. It’s basically Ronning being Ronning (ie cheap)
I know people who work at a restaurant DTSF. They say whenever there is an event downtown, they actually lose money because people are at the event instead of in their establishment. Events also steal their parking away from paying customers.
Mitch, no offense..but is that the opinion of the owner/manager or are you talking about wait staff?
Actually Sy, there has been several DT businesses that have cancelled their membership to DTSF because they don’t see the benefit of the events they put on.
I do feel DTSF should seek funding from their members rather than funneling funds through the city in the form of special assessments. I suppose the argument could be made that some businesses would choose not to provide funds but would reap benefits of those events, but there are tradeoffs either way.
Actually some business do probably lose revenue because of the DTSF events – because nobody is going to want to window shop when there is a parade going on with 15,000 people on the street.
I can fully understand not wanting assessment money to be sent there if a property owner doesn’t feel they are receiving any benefits. People should be able to vote with their dollar, and if DTSF is under-funded because of it, perhaps they need to look at their organization to understand why.
As to Ronning – I have to agree that it doesn’t make sense to assess residential property, because their benefit from DTSF is minimal if anything. Let’s face it – the bars, resturaunts, and handful of specialty shops that rely upon walk-in traffic are really the only people who get any true pay-back from DTSF other than perhaps an indirect benefit like pretty flowers.
However if you recall the testimony from that woman who owned the glass shop, she can’t even have flowers on her property because they are vandalized every time. So what benefit they are seeing I have no idea. Once you get outside of Phillips Avenue, I doubt most of those other property owners are really seeing a benefit – because like I said, insurance companies, laywers, banks, and office supply companies don’t really benefit from Hot Harley nights or a Sculpture Walk.
I don’t doubt that L3wis, but as a former downtown business owner, I can tell you that it can be rather tough sledding. Especially these days. Many of them probably realize they can save the dues and still get some benefit from the events & promotion.
Just like not every Homebuilder is a member of the HBA, but they all benefit form the parade of homes, showcase of remodeled homes, Home Ideas TV etc.
Costner:
“because nobody is going to want to window shop when there is a parade going on with 15,000 people on the street.”
Okay….so you’re suggesting the 10-20 people who avoid a shop due to a parade won’t come back some other time? Moreover, are you also suggesting that NONE or very few of the 15K who are there for the parade window shop?
Read that aloud and let me know if it sounds any less asinine. People bitch and moan about the crowds and traffic at the mall (7 million visitors a year) yet if any of them are actually voting with their feet it isn’t being reflected in any way as rents are higher there than anywhere in town. Retailers pay a premium to be out there and that trend hasn’t changed in 20 years. They wouldn’t be out there if they were losing money.
I know a few downtown owners (some of whom you would believe benefit from events) that do indeed dread the parades and other functions. They are also not fans of the assessments, especially since a certain downtown bar owner believes he is in charge of everything.
“Moreover, are you also suggesting that NONE or very few of the 15K who are there for the parade window shop?”
Not at all, I’m merely saying in some cases those “kitschy” stores aren’t even open when these events transpire, so I doubt they witness any direct benefit (and indirect benefits are arguable). I suppose in theory someone might see something through the glass and come back during business hours – but it sort of depends upon the business.
Your analogy of the HBA is a great example of how DTSF should run though. Those who wish to reap the rewards contribute, and those that don’t… don’t. Yes maybe to some small degree the builders who aren’t part of HBASE get some benefit – but it has to be very limited. If anything I would argue they are directly harming themselves by NOT participating in things like the Parade of Homes or getting their name in Home Ideas magazine.
If DTSF really does benefit EVERY property owner downtown that is one thing, but owners should have their options. Thats all I’m suggesting – because I have a hard time believing every property owner in that arbitrary boundary line is benefitting from what DTSF offers.
Why doesn’t DTSF do fund raising, like other non-profits do, or aren’t they a non-profit?
Hey Sy DTSF does not pay for all the flowers OR the up keep of them. I know for a fact that they did purchase hanging baskets at the begining of summer at $65 a pop. They died less than a week later. Now the have all new hanging baskets. There is another dept. in town that pays for ALL the DT flowers……
Scott, you mean the Zandbroz vs. Stogeez battle?
That never gets old. I wish Jeff and Tim would just get in a ring already. Tim may look tough, but my money is on Jeff.
It’s not just Jeff who is not a Tim fan.
Oh, I know that. I just enjoy the drama. I also love to hear Jeff’s wife talk about it. Priceless.
I’ve never understood why everybody lets Tim intimidate them.
Because, he looks like a gorilla.
I have a friend who was going to open a bar a few years ago…a pretty low-key after work type of joint. They went around to everybody within a block radius before going to the planning commission and everybody signed a letter of support (including Kant). The day before meeting with the city, suddenly businesses were calling to say they were pulling their names off the list. One confided to them that Kant had demanded they stop a competitor from moving in a full block away.
Stare into his eyes sometime. I dare you.
Is Tim another Biff from “Back to the Future”?