A downtown business owner is asking the Ford County Commission to ease some of the pain for business owners renovating in the historical district. Dodge City is looking to expand a program, but broad incremental tax measures would take state action.
The husband of a Dodge City Commission candidate asked the Ford County Commission to consider granting incremental tax increases to business owners who significantly improve their buildings.
While the commissioners are in favor of that kind of tax relief, mirroring the state's economic incentive tax abatement programs, their hands may be tied by state law, city and county staff members said.
Michael and Lily Zuniga invested nearly $175,000 into renovating their 114 year old brick row store downtown, almost quadrupling its value within a year, and with it their property tax bill.
The couple went from paying $3,036 in 2012 to $11,211 in 2013 for their shop at 601 N. Second Ave.
This creates a disincentive for business owners to improve their shops, Michael Zuniga said to the County Commission, and may alter the calculus of the couples' decision to expand their entrepreneurship next door.
Rather than getting hit with the larger tax bill at once, Zuniga asked if the county had the power to raise property owner taxes incrementally over several years after major improvements.
"There are people who have really nice buildings down there and then you get a sore eye because there is one that is not taken care of," Zuniga said. "Maybe we can push people to take a little more action in doing something on their building."
Lily Zuniga has made it a central issue of her campaign for City Commissioner, though both Zunigas have expressed that they understand it would be unlikely they would receive that kind of tax relief on their current building.
The County Commissioners told Zuniga they would look into options.
"It's people like you who we've asked for to come to downtown Dodge to revitalize it," Commissioner Danny Gillum said. "I'd hope we can find an avenue of relief somehow."
"If we truly want downtown Dodge to be revitalized we need to take initiative to make this happen," he added.
The Zunigas are members of the Dodge City Main Street program, which provides access to certain grants and loans inside the downtown business district. Michael Zuniga said the program is great, and has provided input to the city in expanding the program.
Since starting in 2010, the Dodge City Main Street program has awarded 14 grants to downtown business owners who have completed exterior renovations totaling about $55,000 from "Why Not Dodge" Tourism Task Force allocations.
The grants pay for half of a project up to $10,000. Additionally, the business owners have invested an $182,000 in projects that received grants.
Starting this year, the program can also provide 50/50, zero percent interest loans for permanent interior improvements such as floors, ceilings, plumbing and electrical wiring. Main Street will also help businesses, homes and non-profits seek out other state and federal grants.
The city is also working on an expansion of the Neighborhood Revitalization Program to include commercial projects in the Heritage District downtown, City Manager Cherise Tieben said. Now, that program only works with residential structure rehabilitation.
That program would pay owners a tax rebate on improvements done to buildings in the historical district, Tieben said, which she hopes will help ease some of the burden and extra cost of fixing century-old buildings.
Otherwise, state laws provide few options for counties and municipalities, Tieben and Ford County Administrator Ed Elam said. There are tax abatements for certain industrial and tourism businesses written into the Kansas Constitution, but they exclude the kind of storefronts downtown.
"You can't approve independent properties, state law won't let us," Elam said. Likely, the issue would have to be addressed in the Kansas Legislature.
There are also Industrial Revenue Bonds, but those generally only make sense on "fairly large projects," Tieben said.
"On the surface, I don't see any way the county could arbitrarily do a five to 10 year tax abatement or incremental taxing," Elam said. "State law is pretty clear you can't arbitrarily do that."
Still, Elam said he and the county attorney are continuing to research the issue, and city staff members are hoping to make a proposal to increase the tax rebate program soon.
More information on Dodge City Main Street can be found at mainstreetdodgecity.org.