Business owner wants out of downtown tax district
At least one local property owner plans to take advantage of a new law allowing for withdrawal from Waynesville’s Municipal Service District.
Managed by the Downtown Waynesville Association, Waynesville’s MSD runs along Main Street south from Wall Street down to Veterans Circle. Within the MSD, property owners pay an extra 20 cents per $100 in assessed property value on top of the city’s 48.57-cent rate.
The new law states that property owners may submit a written request to the town board of aldermen stating the reasons they think it is “not in need of the services, facilities, or functions” of the MSD.
The function of Waynesville’s MSD is to promote downtown tourism.
Sharon Earley, who with her husband owns the parcel at 180 Legion Drive, made known her intentions to leave the MSD at the July 12 Waynesville board meeting. The Earley’s property — currently home to Ferguson Plumbing Supply — has no frontage on Main Street, and isn’t exactly a tourist draw.
“I’m paying big bucks for the MSD, and what do I get out of that? I don’t get anything out of the MSD,” she said. “I have no parades, no craft fairs — I’m way out there. I have no need for the MSD. No one even knows where Legion Drive is, except for the plumbers.”
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Earley said that when they purchased the property in the mid-1990s, they had no idea what he MSD was, much less that they were in it.
“From the way I understand it, when the resolution was signed back in the late 80s [1986] I was told that the property owners signed up to be in the MSD. But when we bought the property, the MSD wasn’t even brought to our attention,” she said.
Nevertheless, the Earleys have been paying almost 50 percent more in property taxes than those outside the MSD, all while receiving no direct benefit from it.
A letter sent from James B. Earley to the town states that he is “not in need of the services facilities, or functions” of the MSD.
After the Earleys complete the required paperwork, the town board must hold a public hearing. If it finds that the land in question is indeed not in need of the MSD’s services, facilities or functions, it can draft an ordinance redefining the service district of the MSD, excluding their property. The ordinance must be passed at two board meetings, and would take effect at the beginning of the next fiscal year, which is July 1, 2017.
Sharon Earley thinks that would save her about $750 a year.
But at what cost to Waynesville?
The new law gives rise to a number of unpleasant scenarios, including the possibility that others will follow the Earleys, crippling the DWA’s ability to pay an executive director to coordinate the various tasks associated with marketing, improving and backing festivals downtown.
It also disregards the notion that Waynesville is an economic engine for much of the county; while not every property owner directly benefits from inclusion in the MSD, the multiplier effect of a thriving, award-winning downtown means that tourists, vacationers and new residents will also spend money on things not available on Main Street — like homebuilders, landscapers and plumbers.
But if the board of aldermen denies the Earleys’ request, it will effectively force them to pay for services they don’t receive, and may make it harder for them to eventually sell the property.
DWA only applicant to manage Waynesville MSD
An Oct. 1, 2015, state requirement requiring greater competition and transparency in the management of Municipal Service Districts sent shivers down the spines of some members of the Waynesville Board of Aldermen, but in the end it was much ado about nothing.
The Downtown Waynesville Association was the only entity to submit a proposal for managing the MSD by the July 14 deadline, averting a potential power struggle between the DWA and any other organization wishing to compete for the right to manage the MSD’s nearly- $200,000 yearly budget.
The DWA manages Waynesville’s MSD — where property owners pay an additional 20 cents per $100 in assessed value above and beyond city’s current 48.57-cents — and has done so since its inception in 1986.
Fierce competition wasn’t expected; this highly specialized service relies on cooperation from property owners and doesn’t offer much opportunity for profit.
In June the Mount Airy Board of Commissioners approved Mount Airy Downtown Inc.’s application to continue to manage its MSD. Like in Waynesville, there were no other applicants.
Another stipulation of the new regulation was that governments seek “meaningful input” from property owners as well as residents, which the town did with a July 12 public hearing during which only DWA President John Keith spoke.
The town will also hold a public hearing before the contract — which can be up to five years in duration — is awarded.
