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Could Durham’s downtown tax district fall apart if one company is allowed to leave?

One of Measurement Inc.’s many buildings, located at 423 Morris St., in downtown Durham. Measurement Inc. is currently attempting to leave the Downtown Business Improvement District because it believes its services are redundant.
One of Measurement Inc.’s many buildings, located at 423 Morris St., in downtown Durham. Measurement Inc. is currently attempting to leave the Downtown Business Improvement District because it believes its services are redundant. ctoth@heraldsun.com

The future of the Downtown Business Improvement District faces a critical test Tuesday when the City Council considers Measurement Inc.’s request to leave the special tax zone.

The Downtown BID – which surrounds downtown from N.C. 147 to the south, the Golden Belt district in the east and Geer Street to the north – has been in place since 2012.

Its purpose is to enhance downtown by providing services such as street cleaning, economic development, marketing and event planning.

The city pays Downtown Durham Inc. to provide those services through an extra tax rate of 7 cents for every $100 of assessed value for property inside the BID.

Measurement Inc., which owns 21 parcels of land in the BID and paid a little more than $33,000 last year in taxes to support it, said it doesn’t need those special services and wants out.

But DDI believes letting any property owner abandon the special district would damage the zone’s future and has advised the council to reject the request.

“Removal of the MI parcels from the BID would set an unfortunate precedent and reduce public confidence in the integrity of Durham BID,” DDI President and CEO Nicole J. Thompson said.

“Property owners in particular may lack enthusiasm knowing that their neighbor may simply withdraw and leave a hole in the district.”

Downtown BID MAP
The boundaries of the Downtown Business Improvement District, which was established in 2012. Properties in this district are charged an additional property tax in exchange for a multitude of special services, such as street cleaning and marketing. Eanes, Zachery Courtesy of the City of Durham

Bryan Scherich, a director at Measurement Inc., said the company has always opposed the special zone.

“We were opposed to it when it started and are still opposed to it,” he said. “I think if the city believes that downtown needs attention, all city taxpayers should contribute to that. All taxpayers have the ability to come downtown, but only a few business owners pay this extra tax.”

Measurement Inc.’s property is clustered around Washington Street in downtown. It has around 300 employees working in downtown and leases property to several other businesses as well, he said.

Sherich said the BID’s services are redundant for it since Measurement Inc. already contracts people to maintain the sidewalks around its property and do security. He also believes that the marketing functions are not needed.

“We feel that the services that the BID provides are not needed in our area to a greater extent that they are needed in the rest of the city,” he said.

But in a letter to the council, DDI and the Office of Economic and Workforce Development said the fact that Measurement Inc. already contracts those services is proof that they are needed in that part of downtown.

DDI added that the marketing function of the BID benefits every property owner in the district equally and that the “possible ineffectiveness of certain BID Services does not justify the removal of select properties from the Downtown BID.”

But Thompson believes the BID’s services have worked. She linked the success of downtown in recent years with the timing of the creation of the BID in 2011, claiming that the property value has increased by 90 percent from just under $900 million in 2011 to $1.7 billion in 2017.

DDI is right that other property owners would consider leaving the zone if MI is successful.

George Davis, the owner of the Washington Street garden store Stone Bros. & Byrd, said he opposed the creation of the BID because it was compulsory.

“(The BID) came about as something … that was imposed upon us,” he said. “We fought it, and we had a chance to speak for or against it, and I remember a lengthy night at the City Council … and it still passed.”

“I am not opposed to DDI, but to fund them with taxpayers’ funds for a budget I was opposed to,” he added.

For that reason, Davis said he will be watching the outcome of Measurement Inc.’s request carefully.

“If they were allowed to leave, we would try to follow suit,” he said.

Zachery Eanes: 919-419-6684, @zeanes

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