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City Council gives $25K for community improvement district startup

COVINGTON — A group of business owners along the U.S. Highway 278 corridor in Covington are gaining support for a self-imposed tax to create a “community improvement district,” including approval from the Covington City Council.

Mayor Ronnie Johnston asked the council to take a “gamble” and give the group $25,000 as “seed money” in order to gain nonprofit status and receive help from a consultant. In order to form a CID, at least 51 percent of the business owners controlling 75 percent of the tax digest must agree to be taxed at a higher rate. City Manager Leigh Anne Knight said the group is considering a 3- to 5-percent increase in their millage rate.

If approved, the CID would begin at Interstate 20 Exit 90 and continue to Martin’s Crossing where the old Walmart was located. Once the group receives nonprofit status, the city and state Legislature would need to approve the tax increase that would then go in effect for those business owners. The extra tax dollars collected would go back into that district for projects to improve streetscapes, sidewalks, signage, landscapes and more.

Johnston said he attended a meeting held by a few business owners and heard commitments from about 10 people willing to help fund this organization.

“If the city approves and supports this, then I think more businesses will come along and these projects will be funded quicker than any government entity can,” Johnston said. “We’ll start seeing the changes quickly.”

Once the group formalizes its nonprofit status, they could begin applying for grants to fund the projects members agree upon.

Knight said the organization can apply for grants that the city can’t. If the projects the group selects involve the city’s streets or the state Department of Transportation, they will work together to have those projects completed, but the group would be responsible for funding.

“The importance of supporting this group shows them that the city is engaged in the community and wants to see this area improve,” Knight said.

Councilman Keith Dalton noted that in order for anything to move forward at least 51 percent of business owners must agree to the increased taxation.

“This is not a sure thing and we’re taking a gamble by giving them $25,000, but their goal is not to just get 51 percent, but at least 80 percent. These business owners are willing to be taxed higher because they know it’ll benefit this area,” Johnston said. “The economic impact will be noticeable. More businesses will be attracted to that area because of the improvements. We have a community wanting to get involved and tax themselves more, because they want to have the decision power in making those improvements.”

The City Council approved 5-0 to give $25,000 from the general fund to the group of business owners. Councilman Chris Smith was absent. Johnston said the money will help pay for the consulting and start-up fees to formalize the group. There are seven other CID programs throughout the state including Buckhead, Cumberland, Gwinnett Village and North Fulton.