Many downtown merchants want to end tax

Published 10:31 pm Tuesday, April 1, 2008

Should the Downtown Dalton Development Authority eliminate the 3 mill property tax it charges downtown property owners and rely on the City Council for funding?

That was the question posed to more than 100 business and property owners on the DDDA’s e-mail list by The Daily Citizen. That e-mail list does not include all downtown business and property owners.

Mayor David Pennington has asked the DDDA to abolish its tax completely. The DDDA board voted 4-2 to retain the tax last month. But DDDA officials say they hope to reduce the tax when the agency sets its tax rate later this year. The tax raises about $180,000 annually, which the DDDA uses to promote and develop the downtown area.

The Daily Citizen got back 24 responses, and the answers may not represent the views of all those who pay the tax. But those who did respond voted 15-7 to end the tax. One person said he did not realize the DDDA charged downtown property owners a tax. And another said she did not believe she understood the issue well enough to answer.

The Daily Citizen also asked what benefits business owners have received from the DDDA. The newspaper promised that those who answered would remain anonymous unless they gave us permission to identify them.

Thomas Friedheim, owner of Planet of the Grapes, said he’d like to see the tax abolished but not the DDDA.

“Projects like ours (the expansion of our facility to include a full gourmet restaurant) would not be possible without the DDDA — and the low-interest state funding only available through the authority. That said, we understand the DDDA has a sizable cash reserve in the bank (in excess of $250,000 cash — over $350,000 in capital),” he said.

“Gwynne and I believe it would be prudent for the DDDA to abolish the millage tax at this time, reduce overhead — then operate on the reserve for a two-year period. The mayor has indicated the city will dedicate funding for DDDA operations if the tax is eliminated. The DDDA should receive a formal commitment to this end within the two-year period — one year is better. If the city has not arranged for and committed direct and reasonable funding within this period, the DDDA would then be within its state-chartered rights to commence with a 1 mill tax if it has demonstrated during the interim a renewed and effective program for downtown development. We believe this is possible … and necessary,” Friedheim wrote.

The DDDA’s balance sheet shows it had about $256,000 in the bank at the end of January. But DDDA executive director Sarah Harrison says some of that money has already been committed to various projects.

“It’s money that is owed, and we are waiting for invoices or waiting for projects to be finished,” she said.

Harrison could not immediately say how much money the DDDA has on hand after accounting for such projects.

Those who wanted the DDDA to keep its taxing authority pointed to a number of benefits they and other business owners have received.

A.J. Kocher, co-owner of The Fantasy Factory, said a number of businesses have received grants to help improve their building facades, as well as help getting low-interest loans and finding property downtown, from the DDDA.

“The events that are downtown bring a lot of traffic downtown,” he said.

The DDDA promotes classic car “Cruise Ins” during the summer and it has plans for biweekly farmer’s markets this summer, among other activities.

“If (the DDDA) is independently funded, we are not at the whims of whatever the council wants to do,” Kocher said.

Some said they’d like to see the DDDA cut its tax, not end it entirely, and rely on the City Council for some of its funding.

“I think a combination of a reduced tax rate in the authority district and some funding from the city’s general fund would work. The authority has existed for 26 years or more, and through the years the different mayors and councils have had varying interests in downtown. The DDDA board is less political but always has an interest in the downtown district. So some administration wouldn’t necessarily fund to the same degree as others,” said one business owner.

________________



The General Assembly created the Downtown Dalton Development Authority in 1981 to help revitalize the downtown area. Members of the DDDA board include Brian Peters (chair), Kellie Smith, J.T. Finley, Ben Laughter, Lamar Pierce, Gary Brown and City Council liaison Dick Lowrey.