Petition is expected to kill a plan to tax businesses along major Wichita street
A plan to tax businesses along Wichita’s most important downtown street appears to be doomed after eight months of controversy and a chaotic petition process.
Opponents of a Business Improvement District for the Douglas Design District are within two validated signatures of overturning a City Council decision to levy a special tax on all businesses in the area to pay for promoting the commercial avenue from Washington to Oliver.
They’re expected to get confirmation of the signatures they need sometime before an Oct. 15 deadline, when the Planning Department plans to wrap up a process of verifying that the people who signed the protest petition against the tax district are either the business owners or the authorized representatives of owners.
Even proponents say it’s likely the opponents will succeed in upending the tax district.
“They’ve definitely put in a lot of work, time and energy gathering signatures from local businesses up and down Douglas and throughout the design district,” said Steve Suellentrop, president of the Douglas Design District, the group that proposed the special tax district.
“It sounds like the folks organizing that are right on the verge and I would anticipate unless someone that had originally signed it has changed their mind, I would speculate that they would probably get over that mark.”
Massive confusion
If it sounds confusing, well, it’s been that way from the start.
The process has been bogged down by a lack of sound data on what businesses are operating in the area — and who owns them. Further, state law says “business owners” can challenge a Business Improvement District, but doesn’t offer guidance on who can sign on behalf of shareholder-held corporations or absentee owners.
In some cases, signatures were flagged as inadequate because spouses or adult children of the listed owner had signed on behalf of the business. City planners and petition backers had to track down owners to make sure they agreed with whoever’s name was on the petition
Brent Allison of Extraordinaire Salon and Boutique, signed the petition on behalf of the business. While his wife Patti’s name’s on the paperwork, he said they both consider it a husband-and-wife venture.
“I run the place, basically,” he said. “My wife cuts hair and I do everything else.”
He said he didn’t even know the Douglas Design District was still under consideration, much less that his signature had been flagged.
“I thought this whole issue was dead in the water,” he said. “I didn’t even know it was still being considered with everything that’s going on. Of course, I certainly don’t want a mandatory fee imposed on me in this day and age. Our sales are drastically below where they should be this time of year in a normal environment” because of the COVID-19 pandemic.
He said he didn’t recall anyone from the Planning Department calling him to verify the signature, although it may have happened.
“I get phone calls all the time from various entities wanting to know the ownership of the building or the ownership of the business, how many employees I’ve got and yada, yada, yada,” he said. “I don’t recall anybody telling me that that was the gist of the phone call, that they were determining my ownership or non-ownership of the business for that DDD purpose.”
Allison said he hasn’t been active in Design District because he’s at the eastern edge of it near the intersection of Douglas and Oliver in College Hill. He said he always considered the district to be well to the west — between Washington and Grove — and while he’s complimentary of the improvements that have taken place there, it hasn’t ever had much to do with his business.
“I just don’t feel the DDD always had our best interest in mind because we really didn’t need it,” he said.
High aspirations
Twenty or so years ago, the stretch of Douglas east of Old Town was kind of a rough-and-tumble mix of industrial and aging commercial businesses.
In the past couple of decades, it’s moved toward higher aspirations of being sort of a hangout street for hipsters with art galleries, concept eateries, craft beer bars, salons and specialized shops.
Overseeing and encouraging the transformation has been the Douglas Design District, until now a nonprofit and voluntary alliance of business owners who banded together to fund public art and other improvement projects and to organize events to publicize the area.
On Jan. 14, at the request of the Douglas Design District group, the City Council voted to create a mandatory Business Improvement District, or BID, that would levy a tax on every business along the street to pay for promoting the area as a whole.
Most of the money would have gone to hiring a full-time employee to work at marketing and promoting the area.
Under state law, the council can create the BID, but business owners in the district can overturn it if they gather the signatures of more than 50 percent of the affected business owners within 45 days.
The protest petition started almost immediately after the City Council approved the Business Improvement District.
From the beginning, the process was chaos. The city doesn’t issue business licenses, so there’s no way to determine who’s even in the district.
A list was pieced together from a combination of private business registries and door-to-door surveys provided by the Douglas Design District group.
It identified 205 businesses, which would have made the threshold for the protest petition 103 names, according to city records.
But during the signature-gathering process, it became apparent that the number of businesses was actually considerably larger.
Petition gatherers found businesses that had escaped notice in the first surveys, which brought the total number of known businesses to 262 and the number of petition signatures needed to overturn the district to 132.
The BID opponents turned in petitions with 169 entries. “After removing duplicates, rescinded protests, and a few other issues, the protest list was determined to have 154 entries,” according to a city web site.
But that wasn’t the end of it. Signatures had to be verified — a lengthy process interrupted when Gov. Laura Kelly’s COVID stay-at-home order shuttered many businesses and city offices.
To verify signatures, planners combed Secretary of State business filings and called businesses where the names on the petition didn’t match the ones listed in state records.
Michelle Fisher of Fisher’s Transmissions said she was surprised when she found out her signature had been flagged as invalid.
“My father owns the business, he’s 85 years old and me and my brother have been actively running it for over 30 years,” she said.
As company controller, she routinely signs checks, orders and other documents for the company.
“My dad is still here, and my dad would be more than happy to sign because he knows what I was signing for,” she said. “We are very opposed to what they’re trying to do.”
She said after finding out her signature was disallowed, she’s tried unsuccessfully to get through to the planner working on the count.
“I’m going to make sure that my signature does count,” Fisher said.
Known for its quirky and distinctive upside-down signage, Fisher’s was founded in 1955 and has been a fixture on Douglas for 40 years at two different locations. It’s currently situated in a building that once housed customer motorcycle manufacturer Big Dog.
Fisher said a big part of the company’s concern with the BID plan is that the amount of the tax is based on the businesses’ square footage.
The smallest businesses, less than 500 square feet, would pay $100 a year, while businesses over 20,000 square feet would be assessed $550, according to the district plan.
At 13,000 square feet, Fisher’s falls in the second-highest bracket and would pay $475. “Obviously we work on cars, so we use a lot more square footage than most businesses down here because we have to fit cars in it,” Fisher said.
She said she attended meetings opposing the district because rather than improving business conditions, it would hurt the transmission shop.
She concedes that the street looks better than it once did but she vehemently opposes plans to skinny down Douglas from four to two traffic lanes to facilitate bike lanes.
“We have semis that bring us transmissions, we have UPS that stops every day,” she said. “To make this like Delano, with the amount of traffic that we have here, is ridiculous because people are just going to avoid the area.”
License or not?
Suellentrop said the Douglas Design District group studied BIDs around Kansas and neighboring states before proposing one.
“They (the other BIDS) had seen some success in taking everything to the next step and a little bit further,” than voluntary organizations, he said.
“Douglas Design District’s been around for a dozen or so years,” Suellentrop said. “All the efforts up until this point have been on a volunteer basis. It’s been a tremendous effort. I think there’s been a lot of benefit to shine light to not necessarily transform the district, but kind of showcase it and make sure businesses in the area had a little bit of a combined voice.”
He said another thing Douglas Design District learned from other BIDs is that they don’t always make it on the first try.
“I think the efforts that we’ve gone through to this point have been good, but it’s not necessarily a surprise to not be across the finish line,” he said.
Win or lose, the back and forth has shown that there’s a lot of passion on both sides for improving the business climate in the East Douglas corridor, he said.
“I think that there’s opportunity to — even if they were opposed to the BID — to maybe get back in front of them on what is the future of the (Douglas Design District) and come up with an organized plan,” Suellentrop said.
Mayor Brandon Whipple said what happened with the signature verification process was not a good look — especially after City Hall had just sued and blocked another petition that gathered 17,000 signatures to save the Century II Performing Arts Center from demolition and redevelopment.
“If they (BID opponents) truly did not get enough signatures, if they got the signature of the clerk or something at the front desk instead of the business owner, fine,” he said. “Make them go back and get the real signature, I’m fine with that.
“But still, if you’re just rejecting petitions left and right, that also looks pretty bad,” he said.
Whipple said most or all of the confusion surrounding the Business Improvement District plan could have been avoided if the city had a comprehensive registry of all the businesses in the city, like most large cities do.
The city would have been able to determine quickly how many businesses are operating in the East Douglas corridor, how many signatures would be needed on a protest petition contesting the formation of a BID, and who has the authority to sign on behalf of a business, he said.
Beyond the Douglas Design District, the lack of a business registry is hampering Wichita’s economic recovery from the COVID pandemic, Whipple said.
If the city registered businesses, it would have contact information for reaching out to the owners to inform them of government aid programs that can help them weather the pandemic, he said.
He said he learned on a conference call Friday with the Kansas Commerce Department that of the tens of thousands of businesses in the city, only about 1,000 applied for state SPARK grants.
“We probably have a lot more businesses in Wichita that could benefit from that,” he said. “But do they all know about it?”
Whipple last month proposed to the council a business licensing and registration process with a $20-per-year registration charge.
The rest of the council disagreed and Whipple’s motion died without being seconded.
This story was originally published September 21, 2020 at 5:01 AM.
