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. Authorized activities can include (but are not limited to) advertising and promotional activities, security patrols, trash and recycling services, construction, maintenance and/or repair of public improvements, planning studies, events, and administrative costs.
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
Creating A CID
Unlike a Neighborhood Improvement District, a CID is a separate legal entity from the municipality that creates the district. To create a CID, a majority of property owners must submit an official petition to the city clerk, and the City Council holds a public hearing to adopt an ordinance establishing the CID. 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.
Board of Directors & Meeting Minutes
A CID’s board of directors must 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
Community improvement districts exercise significant powers. Depending on their structure and the activities authorized in their petition, they may impose a tax, levy a special assessment, and/or issue bonds.
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.
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. CID’s commonly work with the City to raise funds for and manage the following types of improvements:
- 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
Development Opportunities and Tax Credits
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 to identify opportunities that spur growth in Martin City. View Martin City business incentives>>
CID’s are required to submit a proposed annual budget to the City Council 90 to 180 days prior to the end of the fiscal year. They are also required to submit an annual report to the city clerk and the Missouri Department of Economic Development within 120 days after the fiscal year outlining the services provided, revenues collected, and expenditures made during the year.