Laura Underwood, right, and her mother, Margie Underwood, have a late lunch Tuesday at Johnny B Good's Diner on Lincoln Avenue in downtown Steamboat Springs. The Business Improvement District committee recommended last week that Mainstreet Steamboat Springs drop its proposal to increase property taxes downtown to fund improvements.

Photo by Matt Stensland

Laura Underwood, right, and her mother, Margie Underwood, have a late lunch Tuesday at Johnny B Good's Diner on Lincoln Avenue in downtown Steamboat Springs. The Business Improvement District committee recommended last week that Mainstreet Steamboat Springs drop its proposal to increase property taxes downtown to fund improvements.

Group won't pursue business improvement district taxing this fall

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— Mainstreet Steamboat Springs won't go forward with a business improvement district this year.

Last week, the BID committee recommended to the Mainstreet board that it drop a proposal to increase property taxes downtown to fund improvements. The board accepted the recommendation, Mainstreet President Towny Anderson said, and will not pursue a ballot initiative this fall.

The timing isn't right, Mainstreet Director Tracy Barnett said. She and Anderson attribute the decision partly to higher property tax bills.

"We're trying to preserve our businesses downtown, not run them out of business," Barnett said. "People supporting us last time then got their tax bills. : And with the economic downturn, that just adds frosting to the cake."

As property values rise, taxes increase along with them. Commercial property owners are hit harder, Anderson said, because of the state's 1982 Gallagher Amendment.

Under the amendment, "the portion of residential property that is subject to taxation : drops when residential property values statewide grow faster than non-residential properties," according to the state Treasury Department Web site.

The value of residential properties has grown faster than non-residential properties, "causing the assessment rate on residential properties to drop from 21 percent in 1982 to 7.96 percent today. The assessment rate on Colorado businesses is 29 percent," the site states.

"We're definitely responding to what we're hearing on the street, what we're hearing from our membership," Anderson said. "There are folks whose property taxes have doubled."

Mainstreet plans to discuss its decision with the Steamboat Springs City Council in June, Anderson said. The group intends to seek other long-term funding. It has not decided whether to pursue a business improvement district in the future.

"Everybody's pretty well strapped, and property tax can't be the only way we fund these things," Barnett said, referring to planned streetscape improvements downtown.

The group has not decided what those other money sources might be. Anderson said Mainstreet might ask the city to provide funds matching what the group raises - to a cap.

"We have to come up with some sort of creative funding for improvements in the downtown," Barnett said. "Right now, there's absolutely no funding for the improvements that are being planned in the streetscape."

Will Bashan, who owns Steamboat Art Co. downtown, said he resigned from Mainstreet's board because he was against the business improvement district. He left in March, when it still was under consideration.

"The downtown retailers were against the BID, and the other people were not," Bashan said. "What it tells you is that people who are running businesses have maybe a different sense of what's going on."

Barnett said that going forward with the district could have been divisive for Mainstreet. The business improvement district, which voters rejected last fall, would have added 2 to 2.5 mills to property tax bills downtown, Barnett said.

"My view is that a lot of small businesses support the bid, just not at this time," said Leon Rinck, who owns Steamboat Treasures and Tees.

Mainstreet has run partly on community support funds from the city, taking in $65,000 this past year, Barnett said. The group also gets money through members' dues, special events and the summer farmers market. Mainstreet will apply for city funds again this year, Barnett said.

If the group finds alternative, sustainable funding, a district won't be necessary, Anderson said. The City Council had encouraged Mainstreet to pursue the improvement district, Barnett said.

"They were trying to get the property owners and businesses to invest in themselves, and they would match a portion of that, possibly," she said. "We really feel that the city needs to be investing, as well, and commit a certain portion of funds to the whole downtown thing."

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