Column for April 28, 2011

For a long time, I have heard of Selma wanting to come up with some sort of method of business district enhancement. I thought it a worthy matter, so I joined the Selma Development Partnership several years ago. I gave it a couple of years of investment of my time and effort and quite frankly found the organization to be lackluster and ineffective. There was a lot of myopia on the part of the leadership at the time, I believe, and that caused the organization to flounder and dwindle. Since then, the leadership has changed and I hope that the organization goes in a different direction. From what I could see by the common sense changes made to the recent antiques and car show efforts, the group may be correcting its course.

In Smithfield, there is an effective organization, the Downtown Smithfield Development Corporation. The DSDC markets available properties and works to develop the downtown business district. They also put on such successful events as the upcoming Ham & Yam Festival. The corporation is funded by a special tax district that levies additional property taxes on local business properties. For some time, I have heard rumblings from Selma merchants that they would like the town to do more to promote downtown business. Is the implementation of a special tax district and the formation of a development corporation for the town the proper method? Quite honestly, I am not sure either way. Though it works in Smithfield, I am not sure it will work here or not.

There are several differences between the two towns. Smithfield has a much more diverse downtown than does Selma. For years, I have disagreed with the focus on antique shops in Selma as a way to “re-invent itself”. I have always maintained that diversity is the key to a better business climate for the town. We've had several restaurants fail, primarily because of poor management or implementation. I do patronize the local antique shops when I am searching for something in particular. Other than that, I only go to downtown to pay my electricity bill, pick up a prescription, mail a package, or dine at one of the only restaurants left in downtown.

Basic economics dictates that business patrons will ultimately be the ones who pay the tax, regardless of in which form it is levied. A property tax will jack up the taxation of the retail properties, which will end up in increased prices to consumers. Even if a business leases the property, the property owner will pass along the increased cost to the tenant, who will in turn increase prices to compensate for the increased cost of doing business. For that reason, perhaps a special district consumption tax would be more appropriate, but I suspect that there are state government approvals that are necessary for that to happen.

I will say this, though. I have been told that the business district is taxed at a lower rate than my residential property. I don't know that validity of that claim, but if it is true, I have no problem with evening up the two rates and putting the revenue from the rate differential into a development fund.

I am not sure how the town would administrate the funding nor the personnel. I do know that the news articles I have read indicate that Selma or a non-profit corporation would hire a part-time person for the development efforts. That seems appropriate considering the size of the town. However, I still wonder about the concept of whether or not someone could devote sufficient time and energy to be effective in a part-time position. If not, then the extra taxation would be in vain.

I can only hope that Selma will arise to the occasion should the town's leadership and the merchants agree to move forward with this concept. Since we have a successful example for guidance in the next town over, perhaps if the idea moves forward, it may work out. Personally, I am rarely supportive of increased taxation, but I also see the need of better downtown development and planning in Selma, so I am torn on this issue. Selma has a lot to overcome in terms of its image and in location with respect to the rest of the area's business districts. I would have to learn more in order to be persuaded either way, but I do tend to lean towards the cynical side when it comes to governmental efforts.