WHEATON – The Wheaton City Council is weighing whether to expand the boundaries of a special service area that helps fund the Downtown Wheaton Association or increase the area's tax rate.
City Council members discussed the issue during a planning session June 25, and they will continue the discussion at their council meeting July 2.
Members are looking at possibly establishing a replacement special service area for what is currently special service area 7. They could potentially expand the boundaries and increase revenues to cover other city expenses.
The Downtown Wheaton Association's Board of Directors is advocating for expanding the boundaries to include three apartment complexes – Wheaton Center, Wheaton 121 and the Courthouse Square Apartments.
"We feel that those commercial properties directly benefit from all the efforts of the Downtown Wheaton Association through its promotions, its marketing efforts and through the SSA funding that allows our organization to conduct those events to bring people into downtown Wheaton and keep it a vibrant downtown and make it a desirable space to live," Wheaton Downtown Association Executive Director Paula Barrington told City Council members during the June 25 meeting.
At the same time, the association doesn't want to see the tax rate increased from 45 cents to 52 cents as proposed. The Board of Directors sent the City Council a letter stating that "the originally proposed expansion of the boundaries to include the apartment complexes was intended to provide the city with additional SSA funds while potentially reducing the tax levy for all property owners within the new SSA boundaries."
"The board's consensus is that such an increase creates an even greater burden on the existing property owners within the current boundaries," the letter stated.
A tax of 52 cents placed against the existing boundaries would raise $220,000, the association's current funding request, Wheaton City Manager Mike Dzugan said in a memo to City Council members.
City Council member Suzanne Fitch said she would favor keeping the tax rate and boundaries as they are.
"I think the goal here is to make sure the DWA is fully funded," Fitch said. "That's the feedback that we got, to make sure they are fully funded. Now, how do we go about that? There are a couple of ways to do that. One is to increase the rate to the 52 [cent rate] so they are fully funded, but it's not my preference to increase the rate. But if the DWA doesn't want to come back each year and ask for that supplemental funding, I fear that that could be the only path forward."
Fitch said the other way to ensure it is fully funded would be for the association to come back every year and ask for that supplemental funding, which she would be in favor of providing.
"I think that most of us are in favor of fully funding the DWA," she said. "The question comes down to those residential properties and how they fit into all this."
However, City Council member Phil Suess said he thought the boundaries should be expanded to include the rental properties, while keeping the tax rate at 45 cents.
"I agree with funding the DWA, but I think it has to be fully funded," Suess said. "I want to move away from this being funded out of the general fund. If there is value in this, it should be borne by those generating the value. And I think we have to address this. I don't think the answer is that we'll just give them the $35,000 or $40,000 out of the general fund that we've been doing each year."
Suess also said he thought the proposed new special service area should pay for the maintenance, repair and replacement of the downtown parking decks.
"I think that is a legitimate expense that should be borne by the SSA," he said. "Granted, it's not going to cover the whole expense, but it's a contribution that isn't being made now that I think should be made going forward. And expanding the boundaries gives us the flexibility to do that."
Jim Mathieson, past board president of the Downtown Wheaton Association, told City Council members the association would like to see an expansion of the special service area in order to lower the tax rate for both existing property owners and those coming in.
"The key is that we all survive," Mathieson said.
Diane Moore, owner of MOORE Toys & Gadgets in downtown Wheaton and a Wheaton resident, told the City Council that it makes "perfect economic sense" to include the apartment complexes.
"They are commercial businesses and should be treated as commercial businesses," Moore said.
Downtown Wheaton Association board President Donna Hesik, who owns Suzette's Creperie in downtown Wheaton, told City Council members that she has seen more business activity in downtown Wheaton since opening Suzette's Creperie 18 years ago.
"Think about the business owner that you want," she said. "Think about the property owners you want in the downtown. Do you want the investors, or do you want the people that are going to really care about their property and the downtown area? It's all up to you."
City Council member John Rutledge took exception to the comment that real estate investors don't care about their properties.
"I would argue that investors care very, very much about their properties," he said. "If they're decent real estate investors, they care about maintaining it and generating revenues, meaning they want to lease to people that are going to be successful in their business."
Rutledge, who is in the real estate business, also refuted the association's contention that apartments should be considered a commercial use.
"Apartments are considered residential," he said. "Commercial consists of primarily retail and office."