Community Improvement Districts Defined
A Community Improvement District (CID) is a specific area of non-residential properties, whose owners choose to pay an additional tax or fee to help fund services and improvements within the district’s boundaries. Public safety, infrastructure, beautification, business retention, economic growth, and capital improvements are a few examples of what a CID might focus on. Different CIDs have different needs but most CIDs work in similar ways.
Types of CIDs
1. Large (multi-property) or Small (Single-owner) Political Subdivisions (Martin City is a large political subdivision)
2. Not-For-Profit CIDs
Organizing A CID
Unlike a Neighborhood Improvement District, a CID is a separate legal entity from the municipality that creates the district. To organize a CID, the CID is required to contact all property owners in the district, create district boundaries, identify a board of directors, generate a business plan, and determine a budget and a means of funding.
The language contained in the petition must specifically include a five-year plan describing the purpose of the proposed district, the services it will provide, the improvements it will make, an estimate of the costs of those services and improvements, and the maximum rates of property taxes and special assessments that may be imposed within the district. Once due diligence has been completed, a request petition signed by property owners must be submitted and approved by council members in the city where the CID is located.
Board of Directors
A CID’s board of directors should consist of at least 5 but not more than 30 members. Each director must be a registered voter and an owner or authorized representative of a business or property in the district.
How CIDs Are Financed
Not-for-profits are funded by property taxes and/or special assessments, fees, and rents for district property or services, grants, gifts, and/or donations.
Political subdivisions are funded by public money through sales tax assessments. Retailers remit sales taxes to the State of Missouri and the receipts are then distributed to the City. (The City does not administer the local component of the sales tax.) While many businesses support CIDs, some believe adding another tax may dissuade customers and would rather not be located in a CID.
The Martin City CID generates revenue from an annual property tax assessment on each parcel located within the CID boundaries and a 1/2 cent retail sales tax on CID businesses. Those businesses generate approximately $50M+ in sales tax revenue annually for the city of Kansas City, Missouri.
CIDs may also issue bonds, notes, and other obligations. Such obligations shall mature within 20 years of the date they are issued.
A Sample of Common CID Expenses
- Art, bike racks, fountains, kiosks, and murals
- Beautification of lawns, trees, parks, and other outdoor public spaces
- Demolition or rehabilitation of public buildings or structures
- Meeting rooms and/or public meeting facilities
- Public parking lots and/or garages, or the operation of parking facilities and/or shuttle bus services
- Security services
- Street sweeping and snow removal
- Trash collection and disposal services
CIDs can be a powerful public-private tool used to revitalize business districts and re-energize communities. The list below is a sample of eligible public improvement projects CID’s commonly manage.
- Sidewalks, streets, alleyways, bridges, ramps, tunnels
- Streetscapes, lighting, benches, marquees, awnings, canopies, trash receptacles, walls
- Traffic signs and signals
- Utilities, drainage works, water, storm and sewer systems
CIDs are often located in economically-distressed communities or areas where blight may be a problem. Depending on where the CID is set up, incentives may be available to encourage businesses to move in. The Martin City CID is located in an Opportunity Zone, a HubZone, an Enhanced Enterprise Zone, and an Urban Renewal Area.
We work with the Economic Development Corporation of Kansas City, Missouri, Jackson County, Kansas City, Missouri, and the Land Clearance Redevelopment Authority of Kansas City, Missouri to create and identify opportunities for growth and development in Martin City.
The Economic Development Corporation of Kansas City, Missouri can provide additional details about CID’s if you’d like more information.