What Is A Community Improvement District (CID) And What Does It Do?

In Incentives and Loans, KC News, Small Business by EDCKC Staff

Odds are, you’ve seen a few mentions of Community Improvement Districts (CIDs) in and around the Kansas City Metro Area. You may be asking yourself, “Just what is a Community Improvement District, and how is it helping to improve conditions for businesses and communities in Kansas City?”

Made possible by legislation at the state level, the first CID in the Kansas City area was the Three Trails Village CID founded in 2002. They were the first CID in Missouri to employ sales tax funding.  Since then, more than 36 CIDs have been formed around the region and the number is still growing.  Some CIDs in the metro include Martin City, Brookside, Independence Ave, KCI Airport, Downtown, 39th Street, Troost Avenue, Waldo, Main Street, River Market, Zona Rosa and the Crossroads Art District.

Community Improvement Districts are designed to help improve the community by bettering conditions for existing businesses, and attracting new growth. Community safety, beautification, business retention, economic growth, and capital improvements are all domains in which CIDs can help improve business-minded communities. Different CIDs have different focuses, depending on the needs of the community they’re serving. The Downtown and River Market CIDs, for example, employ Maintenance or Safety Ambassadors that patrol the areas offering directions, information, help with bus routes, or even an escort to your car. The Ambassadors also focus on beautification through graffiti abatement, sidewalk cleaning, and trash pickup.

The Crossroads CID will be placing a major focus on public safety and beautification, while other CIDs, such as the Ward Parkway CID are focused on collecting funding to help reinvigorate the local retail climate. The successful Martin City CID was initially created—in part—to help improve 135th Street and grow business in the area and now has an active board of business owners heavily involved in the all improvements.

While many believe CIDs are great, there are some businesses that feel it’s adding another tax that can dissuade customers. Regardless of their particular goals, most CIDs work in similar ways. The legislation allowing for their creation requires that a potential CID contacts all property owners that may be involved, creates a district boundary, identifies a Board of Directors, generates a business plan, and determines a budget and a means of funding.  Here are some specifics:

There are two main types of CIDs in Missouri:

1. Political subdivisions (which are funded by public money via sales tax assessments)

2. Not-for-profits (which are funded by property tax or special assessments)

Organizing A CID

By request petition, signed by property owners owning at least 50% of the assessed value of the real property, and more than 50% per capita of all owners of real property within the proposed CID, presented for authorizing ordnance to the governing body of the local municipality in which the proposed CID would be located.  Language contained in the petition narrative must include a five year plan, describing the purposes of the proposed district, the services it will provide, the improvements it will make and an estimate of the costs of those services and improvements, and the maximum rates of property taxes and special assessments that may be imposed within the proposed district.  Other information must state how the CID would be organized and governed, and whether the governing board would be elected or appointed.  There are specific rules that provide the required elements of a CID petition, and the procedures for publication, public hearings, etc.  The Economic Development Corporation of Kansas City (EDCKC) will be happy to provide details of these rules upon request.

Supporting Organizations

Unlike a Neighborhood Improvement District, a CID is a separate legal entity, and is distinct and apart from the municipality that creates the district. A CID is, however, created by ordinance of the governing body of the municipality in which the CID is located, and may have other direct organizational or operational ties to the local government, depending upon the charter of the CID.

Typical Budget Items And Responsibilities

A CID may finance new facilities or improvements to existing facilities that are for the use of the public.  Such public-use facilities include:

-Public convention centers, arenas or meeting facilities
-Public paintings, murals, fountains or kiosks
-Parks, lawns, gardens, trees or other landscapes
-Streetscapes, lighting, benches, marquees, awnings, canopies, trash receptacles, walls
-Sidewalks, streets, alleyways, bridges, ramps, tunnels, traffic signs and signals utilities, drainage works, water, storm and sewer systems and other site improvements
-Public parking lots and/or garages
-Public child care facilities and any other useful, necessary or desired improvement

A CID may also provide a variety of public services, some of which may be:

-Operating or contracting for the operation of parking facilities, shuttle bus services
-Leasing space for sidewalk café tables and chairs
-Providing trash collection and disposal services
-Within a designated “blighted area”, contract with any private property owner to demolish, or rehabilitate any building or structure owned by such property owner
-Providing or contracting for security personnel, equipment or facilities

 
Financial Resources

Funding of CID projects and services must be set forth in the requesting petition that is presented to the local governing body of the municipality in which the CID is located.  Funding may be accomplished by district-wide special assessment, rents, fees, and charges for the use of CID property or services, grants, gifts or donations. If the CID is organized as a political subdivision, property and sales taxes may also be imposed within the boundaries of the CID.

The ability of Kansas City’s communities to establish CIDs for the purpose of improving their public use facilities for the enjoyment, convenience, safety and common good of all citizens is an outstanding example of local economic development excellence. The Economic Development Corporation of Kansas City has additional information available and strongly recommends retaining qualified professional consultation or assistance of counsel in the formation of a special district.

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Reference Links:

The Downtown Council of Kansas City

3 Trails Village CID

Brookside CID

Martin City CID

Missouri Department of Economic Development

City of Kansas City, MO