Wichita City Hall hampers anti-tax petition drive with inaccurate list, foes say
Business owners opposed to a new tax in the Douglas Design District say they’ve been getting the runaround from Wichita City Hall as they try to collect enough signatures on a petition to fend off the plan.
Opponents have until Monday — 45 days after the City Council approved the district — to gather enough signatures from business owners to shut the district down before it starts collecting taxes next year.
They think they’re close, but they’re operating off a list of affected business that they say — and city officials concede — is apparently inaccurate.
There’s also some dispute over what counts as a business and concern that signatures from some legitimate business owners could be ignored when city officials get around to counting the names on the petition.
“Don’t you think the city should have known how many businesses are included in this before they saddled us with a tax?” said Reuben Saunders, owner of an art gallery near Douglas and Hillside that bears his name. “If this was such a good idea, why didn’t they make Douglas Design have to get a petition to approve it?”
Controversial tax in district
The controversy revolves around the establishment of a “business improvement district” for a 2 1/2 mile stretch of Douglas running from Washington to a block east of Oliver.
Unless it’s overturned by a petition, the plan approved by the City Council will levy a tax of $100 to $550 a year on each business, with the amount depending on their square footage.
It’s a fairly common practice across the country where small businesses band together, create a special district, and tax themselves to pay for joint promotions and improvements for the benefit of all.
Much of the confusion over who’s in the East Douglas district can be attributed to the fact that the city has no comprehensive business licensing, and thus no master roster of businesses to know who should and shouldn’t be paying the tax.
The working list of businesses the city’s using to say who will have to pay the tax was submitted by Douglas Design District Inc., a nonprofit that currently acts as the promotional organization for the area, said Scott Knebel, interim director of the Metropolitan Area Plannning Department.
“I think there probably are inaccuracies on it,” he said.
Potential errors could include businesses that were missed when the list was compiled and/or businesses that are included, but have since moved or gone out of business.
The information was obtained from companies that assemble business mailing lists and checked by a door-to-door canvass conducted by Renee Duxler, a former East Douglas business owner who’s now the executive director of the nonprofit, Knebel said.
Tax opponent Monty Stuber, owner of the Monty Stuber Salon, said that’s not adequate.
“A list of the affected taxpayers has not been provided to the opposition so that it may collect the required signatures,” he wrote in an e-mail. “And the council keeps increasing the number of signatures required for opposition by changing the underlying undisclosed data against which opposition is measured.”
Majority rules on City Council?
City Council member Brandon Johnson, who represents the area, voted for the district’s formation at the Jan. 14 meeting, where it passed on a 4-2 vote.
He said he wants the majority to rule, but the city is bound to an odd process by state law.
The City Council is the only authority that can create the district, and it doesn’t have to gauge the support from the affected taxpayers.
If they don’t like it, opponents have 45 days to gather signatures from more than 50% of the business owners in the district. If they do, the district’s dissolved.
After that initial 45 days, only the City Council could dissolve the district, according to state law.
Saunders said he thinks the council’s assertion that their hands are tied by the state is a bit of a dodge.
Even though it’s not required by law, the city had the option to simply not approve the district if the proponents couldn’t provide a petition showing majority support, he said.
Guaranteed income from business tax
Douglas Design District Inc. is a heretofore voluntary-membership group formed in 2007 to promote businesses in the area.
It’s been operated on a more-or-less shoestring budget funded by donations.
The business tax would give the district guaranteed core funding of about $50,000 a year with a projected overall budget of $85,000, enough to pay for a full-time director to run things.
Duxler said whether or not the business tax survives the petition challenge, she’ll step down as director at the end of this year at the latest.
She won’t apply for the permanent position and will probably look for a job where she can use her master’s degree in social work, she said.
Unlike many business improvement districts that are focused on a solid core of retail, bar and restaurant uses, the Douglas Design District is an eclectic mix of business types.
It includes CBD stores and tattoo parlors, auto repair shops and industrial operations, upscale art galleries, furniture stores, warehouses and professional offices.
Duxler said even industrial and Web-based businesses that don’t sell anything on site will benefit, because being in a more desirable area will make it easier for them to attract and retain good employees.
A big gray area is how to count businesses in office parks, where entrepreneurs rent or share space on a come and go basis.
Discrepancies in the list of businesses prompted the district dissidents to demand a legal opinion on whether the City Council vote to establish the district was even valid.
Assistant City Attorney Jeff Van Zandt wrote that because the business parks were given legal notice that the tax was in the works, it was unnecessary to individually contact everyone in it.
“Since there are virtual office or tenants that can rent for only a month, or even share an office space, it would be almost impossible to obtain proper notice on each of the tenants,” his opinion said.
A sizable portion of business owners say they support the tax district as a way to improve the area and bring in more traffic at a low cost to each business.
“I do support it, absolutely,” said Melissa Salem, who bought the Donut Whole, an East Douglas institution, in October with her husband, Ramy.
She said the tax is “really quite minimal” and will help all the businesses by generally improving their surroundings in the district.
“I think we all need to take care of it,” she said. “We all benefit from it . . . no matter what your business is.”
This story was originally published March 6, 2020 at 4:51 AM.
