Downtown Middlebury tax district seeks extension to continue work on economic development

MIDDLEBURY — The Middlebury Downtown Improvement District Commission has begun the process of petitioning the town’s selectboard to extend and amend the Downtown Improvement District ordinance.

The local law places a special tax on nonresidential downtown properties in order to fund projects in the area.

At present, there are 124 properties that fall within the district, which encompasses the central village around Main Street and Route 7 in the heart of the village.

Before the petition can be submitted to the selectboard, it must be signed by two-thirds of district property owners, many of whom own more than one property. The commission, which is responsible for drafting the improvement district budget and making recommendations to the selectboard, has spent the last few months mailing copies of the petition for property owners to sign.

At midweek last week, 42 improvement district property owners had signed the petition.

Town Manager Kathleen Ramsay said that several individuals are in the process of sending their signed copy in the mail, or have asked for another copy to sign.

First implemented in 1996, the ordinance places a tax of $100 per $100,000 of assessed value for each non-residential property. On average, affected property owners pay $287.25 annually, according to Ramsay. That tax has generated approximately $34,000 per year, and has helped fund roughly $1.6 million in downtown improvement projects. Recent projects have included the construction of new sidewalks, historic streetlight fixtures, rapid-flashing beacon pedestrian crossing lights, among others. The ordinance was last reauthorized on June 7, 2010. The improvement district commission is petitioning the selectboard to renew the ordinance for another seven years, until June 30, 2024. 

A portion of the revenue collected each year is allocated toward the maintenance of past projects, as well as the salary of Karen Duguay, the Better Middlebury Partnership’s (BMP) part-time marketing director and only employee. Each year, $35,000 is allocated to fund the position’s salary, plus another $5,000 for worker’s compensation. To fund that allocation, the town of Middlebury, the improvement district commission, and Middlebury College contribute $25,000, $10,000 and $5,000, respectively.

As marketing director, Duguay works 30 hours a week, helping to coordinate community events and initiatives, such as the annual downtown Chili Festival and hanging wreaths during the holiday season. The Chili Fest is the BMP’s only revenue-generating event, everything else it coordinates is free.

“The purpose of events are to make them accessible to everybody. We want to increase the vitality of Middlebury by making all of these things free to enjoy,” Duguay said.

BMP also serves as the town’s representative for Vermont’s Designated Downtown program, an initiative designed to maintain and bolster downtown centers across the state. The organization works with town planning and zoning staff to submit information to the state regarding the area’s yearly change in number of businesses and employees. In her role as marketing director, Duguay attends mandatory conferences and trainings that make the town eligible for specific grants, and certain downtown businesses eligible for tax credits. According to Duguay, Middlebury is one of the only communities in the program that also focuses on business outside of the downtown designation. She said other downtown promotion groups have begun to look at Middlebury as a model.

“I firmly believe that to have a vibrant and strong downtown, it is really beneficial to be supporting businesses and other activities that are outside of the downtown. And likewise, that (those businesses) help create a stronger downtown as well,” she said. “We’re all in the town. We’re all supporting each other. Without those areas (outside the downtown), is the downtown as vibrant? I think we all need each other.”

In addition to maintaining past projects and events, the downtown commission and BMP are focused on looking for new ways to allocate the tax dollars collected.

“It’s an ‘improvement’ district commission, so we want to make sure that we’re continually trying to improve the downtowns,” said Amey Ryan, a member of the commission and the incoming president of the BMP’s board of directors. “That is what  the cross-pollination with the BMP is, you’ve got the (Downtown Improvement District), which is focused on the downtown in a very delineated way, and then you have the BMP, which is also more broad-reaching for the town.”

Ryan, who owns IPJ Real Estate in the heart of downtown Middlebury, emphasized the need to renew the ordinance in order to continue the work of improving the area.

“As businesses owners, we all get tapped on a regular basis for different things, but I do think this is one of those things that comes around in circles. You pay a relatively small portion, and I realize there are some property owners who pay a lot more because of their assessed valued, but in the grand scheme of things it can be a relatively small investment in the town,” she said. “This is one mechanism that seems to have worked well over the last few years and I hope that people would reconsider or consider supporting it.”

TAX BURDEN

One property owner who has not yet signed the petition is Dan Swift, who owns four improvement district properties, including the Swift House Inn located at 25 Stewart Lane. Swift said he believes in funding the BMP and maintaining the downtown area, but that he has not yet signed the petition due to the already high cost of property taxes.

“(The improvement district tax) adds another $1,200 to my tax bill,” he said. “I am a small businessman struggling in a state that costs a fortune to run a business.”

Though he has made his concerns with the rising property taxes clear, he says he believes the money has been spent well, and he does plan to sign the petition.

“I think it’s time to make a statement,” he said. “I am compassionate about what we have to do, but I sign it wanting to be vocal about these things.”

Another improvement district property owner, Daniel McIntosh of Forth ‘N Goal and The Middlebury Shop located at 68 Main St., has already signed the petition in support of the ordinance.

“I think the money has been used well in the past. It’s a reasonable amount of money to accomplish something positive in town. I think it’s a good investment,” he said. “Our town looks great, aside from the construction, and, in general, things are in nice condition and we have to keep maintaining all that stuff.”

Property owners who have not yet signed the petition have until June 16 to do so, and should contact Ramsay if they require another copy. Should the petition receive the required number of signatures, it will be presented to the selectboard at its June 27 meeting.


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