SANDPOINT — City officials will be asking dozens of business owners for some holiday giving in the form of unpaid Business Improvement District fees this December.
According to Sandpoint treasurer Shannon Syth, the city will be issuing its third and final letter of warning to the 93 businesses not in compliance with the BID tax. Those who refuse to comply can expect to see their unpaid fees go to a collection agency in January.
“I do understand the economic times and financial difficulties many people are experiencing,” Syth said. “But we’re just doing our job for the city.”
A tax on businesses operating within the boundaries of Sandpoint designated “downtown,” the monthly BID charge ranges from $10 to $65 based on the square footage of the business. The tax has come under fire from a group of business owners that can’t see any benefits for their money. Rich Curtis, owner of Exit Realty, is a leading figure in the initiative to dissolve the BID tax.
“We’re all victims of the current economic wind,” he said. “The BID is cutting off the branch that bears the fruit.”
Exit Realty is one of the 93 businesses that aren’t current on their BID fees. Curtis said his nonpayment derives from both current financial difficulty and a protest against the mandatory nature of the tax.
“With the direction real estate has gone in the few past years, I just can’t afford the extra financial burden,” he said.
Curtis said that he is not opposed to the Downtown Sandpoint Business Association, the organization funded through the BID that orchestrates downtown improvement projects. However, he thinks that their initiatives and events aren’t worth the current cost to Sandpoint businesses, citing inefficiency as his primary concern.
“They make the cost of doing business very high,” he said.
One of his primary complaints revolves around new or moved businesses that now operate within the BID’s boundaries not being charged. Kathleen Hyde, manager of the DSBA, said that she keeps up with identifying eligible business twice a year as specified by her job.
“Responsible business owners should be notifying the city when they change locations,” she said.
She also pointed out that the city — not the DSBA — enforces the BID tax. Syth confirmed that the two primary methods of identifying businesses to charge are through the DSBA and business registrations.
“If people know about businesses that aren’t being fairly charged, then they should let us know,” she said.
The lack of benefits for all business within the BID also concerns Curtis. “The flowers and beautification projects downtown might be nice,” he said, “but what good does that do businesses nowhere near those areas?”
In response, Hyde pointed out that since a economic initiatives for downtown business would provide money to spread throughout the entire community, even business outside of beautified areas would enjoy benefits.
Curtis has been fostering public support through petitions and information-hunting to challenge the BID. He said the tax wasn’t put together legally in the first place because of errors in paperwork, but the statute of limitations to challenge it has expired. In addition, he said the city is hampering his information access with what he considers exorbitant copying fees. City officials informed him that his request for 950 pages of business registration applications would carry a $526 labor surcharge beyond the 10 cents per copied page.
According to Curtis, a better way to finance a business association would be to remove the downtown boundaries and increase Sandpoint’s bed tax. According to him, a three or four-percent increase to the current five-percent tax could fund the DSBA without hurting local businesses.
Hyde said that such a change would require city and voter approval.
“A change like that would have to be voted in,” Hyde said. “And I think the people who would have the biggest say would be the lodging community.”
According to Hyde, the DSBA isn’t opposed to dissolving the BID. Instead, they’re open to a fleshed-out plan that would allow for a seamless transition into a new financing system.