A new business district for Charleston’s iconic King Street has its ground rules.
The corridor, known as the King Street Business Improvement District, imposes a fee on all commercial businesses on King between Broad and Line streets.
For a $ 1 million commercial property, which under South Carolina law is assessed on 6 percent of its value, the new tax would amount to $ 678 per year.
Charleston City Council unanimously approved a memorandum of agreement July 19 between the city and the Charleston Downtown Alliance, the nonprofit entity that will operate the BID. The finalized agreement is the result of months of feedback and a council workshop last week.
“We have spent a lot of time with council and staff redrafting this so that everybody is clear on what we are getting into and what the expectations are,” said Doug Warner of Explore Charleston. “I think we are in really great place.”
One of the concerns raised at the July 12 workshop was the makeup of the Downtown Alliance board.
A draft of the agreement presented at the workshop stated that a majority of the nine-person voting board must reside within Charleston, Berkeley and Dorchester counties.
The draft required one City Council member to serve as a voting member of the board, which automatically meant at least one member would be a city resident. Councilman Peter Shahid said those requirements did not go far enough to ensure that city residents had a voice on the board.
“We’re dealing with public finds from the city of Charleston, and I just think it’s unconscionable to have just one guaranteed city resident on this board,” Shahid said at the July 12 workshop.
As a result, the approved agreement states that at least two voting members of the board must be city residents.
It also includes requirements that at least one voting member be a woman and at least one be a racial or ethnic minority. The board must also include a business owner who rents, rather than owns, their commercial space.
The Charleston Downtown Alliance has already been established as a way to get the BID process off the ground. Now the current board of directors will go through a selection process for choosing fellow bidding members according to the city’s parameters.
“We are not telling them who their members should be, but their voting members have to be within these guidelines,” Charleston Planning Director Robert Summerfield told the Post and Courier.
Impact on renters
The impact of increased fees on business owners who rent their space has been a concern of opponents of the BID.
The improvements funded by the district are aimed at keeping the street clean and attractive for both visitors and business owners, proponents say. It may also fund an “ambassador” program that includes paid monitors who walk the street offering directions and guidance to visitors and also But such efforts, opponent say, can also attract high-end chains that drive property values up and local businesses out.
To address this concern, the agreement states that the downtown alliance must issue an annual survey to business owners within the district. The survey will include a question about how the fee has affected rents for commercial tenants within the district.
“We’ll do a full-blown survey every year before we come back to council for approval of the budget,” Warner said.
Out of the 467 properties included within the BID, about half will pay less than $ 500 per year, the Downtown Alliance estimates.
An early proposed budget from the Charleston Downtown Alliance shows an annual income of about $ 1 million to spend on services for the district. Roughly 60 percent of that, or $ 600,000, would come from a new tax on commercial property owners. The rest would come from contributions from the public sector, fundraising, grants and income from programs.
Some opponents at the July 19 meeting took issue with the idea that public funds would be controlled by a nonprofit, instead of elected officials who residents can hold accountable in the voting booth.
“It’s your job to do this, not some sort of secret, vest-wearing collection of folks who are turning Charleston into private property,” local activist Tamika Gadsen said.
Joel Sadler, co-owner of the Sightsee retail and coffee shop, said he wanted the agreement to limit how much outside funding the alliance could accept.
“That will create a financial juggernaut of a monster that will be well beyond your control,” said Sadler, whose business is adjacent to the district.
Those suggestions were not worked into the agreement, but Downtown Alliance Chairman Chris Price said the BID is the result of close collaboration between the city and the nonprofit. When City Council approved the creation of the BID earlier this year, the alliance had collected written approval from business owners who represented 55 percent of the street’s property value.
“We feel very good about this process and the two years of work behind this. From the mayor to City Council, to the city teams to our teams this is a perfect example of public-private partnership,” he told The Post and Courier.
Commercial property owners will see the fee on their county tax bills this fall and the BID will see its first revenue from the tax in 2023.