Is MSD expansion a done deal?

By Tom Joyce

June 4, 2014

Downtown leaders see the expansion of Mount Airy’s Municipal Service District (MSD) as a good thing — but property owners who would pay higher taxes as a result don’t share that view.

In addition to voicing opposition to the plan at a May 15 public hearing, that backlash has been manifested in a letter-writing campaign to all property owners in the greater downtown area.

About 160 letters were sent in all, according to Gene Clark, a 2009 mayoral candidate in Mount Airy who is part of a business group that owns property targeted for the annexation, Triple C of Mount Airy, LLC. In all, 18 parcels are considered, including the former Spencer’s Inc. manufacturing complex.

Among other things, the letter asks recipients to support the anti-expansion position by attending a city commissioners’ meeting Thursday night when a vote is scheduled on changing the special tax district. Certain sites on Independence Boulevard, Virginia Street and Pine Street are being considered, along with the entire north side of Franklin Street stretching from Willow to South streets.

The annexation would require Triple C and others, including owners of two residences, to begin paying an extra 21-cent hike in taxes per $100 of assessed valuation, on top of regular property taxes. The money funds infrastructure and other improvements in the district.

Clark is hoping the decision hasn’t already been made.

Mount Airy’s proposed 2014-2015 fiscal year budget already reflects the expansion recommended by Mount Airy Downtown Inc., the group that manages MSD projects using the additional tax. That is the case despite no vote having been taken on the issue.

Additional tax revenues to be realized from the expansion — $77,680 for next year compared to $72,240 for 2013-2014 — are included in the preliminary budget as well.

“Hopefully, the decision hasn’t already been made — but apparently it has,” said Clark, who was one of four property owners who spoke against the expansion during the May hearing. No owners expressed support.

Clark complained at the hearing that an earlier PowerPoint presentation on the Municipal Service District was illustrated with improvements in other cities, but lacking in examples of how the special tax had helped downtown Mount Airy during its 39-year existence.

Others expressing opposition included an official of Carter Bank & Trust, which also is in the area eyed; another representative of Triple C of Mount Airy; and the owner of one of the homes targeted.

Clark said he would like to think the public hearing was more than just a formality conducted to meet a statutory requirement.

Alternate Plan

The letter-writing campaign spearheaded by Triple C seeks to ensure that everyone in the area knows what is going on, including property owners in the present Municipal Service District and those just outside. Clark believes if the present expansion goes through, similar annexations of adjoining territory could follow.

“We felt it was important to reach out to you as well since it only logical that these areas will be targeted eventually,” the letter says in relation to those in border areas.

In explaining Triple C’s position, Clark emphasized that it is not opposed to the MSD and the strong environment it wants to foster in the central business district.

“We are, however, strongly opposed to the property owners of the MSD paying an additional 40 percent premium in addition to the city tax rate,” states the letter sent on behalf of the ownership group.

“We believe that the business owners of downtown have already made a substantial investment in downtown and the cost of the improvement should be shared equally by the entire city of Mount Airy.” The basis of the argument is that improvements to downtown Mount Airy benefit the municipality overall.

Clark believes taxpayers in general should bear the financial burden, rather than a relative few entities such as Triple C, which owns property at the corner of Franklin and South South Streets with an assessed value of $94,000. It rents the site to a mental health operation.

“I think they ought to share in the funding of downtown,” Clark said of city residents as a whole. “If everybody thinks downtown Mount Airy is important, they should help support it.”

Clark objects to having a special tax just so someone can say it paid for facade improvements or a parking lot. “Look, if it’s important to the city of Mount Airy, they’ll find a way to fund it,” he said of using general revenues instead.

“But to charge everyone 21 cents,” Clark added of those in the new territory, “there’s something crazy about it — it just doesn’t make a lot of sense.”

In funding downtown programs, the Triple C group is advocating an alternative whereby a proposed 4-cent reduction in city property taxes would be lowered by 1 cent and the proceeds from it earmarked for downtown improvements. That would generate about $125,000 annually for the MSD, rather than the $77,680 now projected.

Under this scenario, the extra 21 cents for MSD property owners would be eliminated.

Clark said this is more sensible than having “a special fund over here that I’m not going to be able to use or Carter Bank is going to be able to use.”

Tail Wagging Dog?

The consensus among expansion opponents on May 15 was that they don’t see themselves as part of the downtown area dominated by North Main Street properties and do not believe they will benefit from the extra taxation.

Ted Ashby, a local banker who presides over the board of directors for Mount Airy Downtown Inc., takes the position that the grant and other assistance programs open to the new MSD members would benefit all, including those of residential properties.

The extra taxes paid would be offset by benefits including a rise in property values in the area, Ashby says.

However, Clark is not convinced.

He believes property values will increase naturally, which has traditionally been the case except for the last countywide revaluation in 2012 which reduced real city estate values by 2.8 percent overall. But this was viewed as an aberration caused by the sluggish economy.

“The bottom line is, everybody’s property values are going to rise,” Clark said. “Everybody’s property values go up — not just downtown property owners.”

Clark thinks the push for the MSD expansion initiated by Mount Airy Downtown Inc. is about control — of both the territory and dollars involved

“The people on that board don’t trust the commissioners to do what’s right for the city,” he charged. And they don’t want to “lose control of that money.”

Contacts With Officials

The campaign undertaken by Triple C of Mount Airy is asking recipients of the letters to get involved by calling or emailing the mayor and board of commissioners — with their contact information included with the material sent.

“All we ask is that you call each member and voice your support of our plan and oppose the tax and the expansion if the council will not consider eliminating the special tax which they have the ability to do,” the letter urges.

Clark would like to see action postponed on the expansion at this week’s commissioners’ meeting — scheduled Thursday at 7 p.m. at the Municipal Building, to allow more time for the issue to be explored. “If we can delay it one month, that pushes it back a year,” he said of a timetable calling for the tax increase to become effective with the new fiscal year on July 1.

“We plan on being there on the fifth,” Clark said of those associated with Triple C, who are urging others to occupy the meeting room as well.

“I’m going to do my best to fill it up,” he added.

Tom Joyce may be reached at 336-719-1924 or on Twitter @Me_Reporter.