Highland is moving forward with a plan that will consolidate two of the business districts the city created two years ago.
The move comes as a precaution, City Manager Mark Latham said last week. During their planning process, he said it was believed that sales tax revenue raised in the districts could be used throughout the three business districts Highland created.
However, in January it was made clear through the city’s bonding attorney that wasn’t the case. Latham said because of that two of the business districts must be consolidated to fund the city’s $7 million public safety building set to go out for bid this month.
“It was somewhat of a shock, although the consultant indicated that several cities move the money back and forth between the districts,” Latham said. “But we don’t want to take a chance.”
Latham said the change to the business districts will have no effect on citizens or businesses, as the half cent sales tax will remain the same. He said the only thing that is changing is the districts’ designations.
The business districts were created without voter approval in 2017 in order to fund the public safety building and other future major projects the city were planning. Latham said the funds from the districts will also help fund fixing a culvert that will reduce the city’s flood zone dramatically.
Other projects could include redevelopment of underutilized properties in the districts, future commercial sites and possibly conservation areas.
The districts added a half cent sales tax to the three districts:
▪ District A: Northtown and areas along Walnut Street and U.S. Highway 40.
▪ District B: Downtown district including areas along Broadway and Highland Road.
▪ District C: Centered along Frank Watson Parkway, much of which is still undeveloped
In order to form the districts, the city had Edwardsville-based consulting firm Moran Economic Development draft a “redevelopment plan” that created the districts based off declaring the areas “blighted.”
The firm’s study found 63 percent of 233 structures within the districts showed some sign of defects in structural components of the buildings and that 60 percent of parcels in the district exhibited deteriorated surface improvements.
In District B, 68 percent of 464 structures had visible signs of wear and 66 percent of the district’s parcels also had deteriorated surface improvements. The study also made note of deteriorating water and sewage piping, a project the city is currently undertaking.
District C fell into the blight definition because a major amount of acreage is without access to right-of-way infrastructure.” The study also is “economically under utilized,” the study said.
Without the redesignation, raising the funds would fall fully on the Business District A, which Latham said can’t raise the funds by itself. He said because the public safety and culvert projects will affect most of the city, more than one district should help fund them.
“If you’re going to build a public safety building that’s going to serve the whole community but that district doesn’t create enough bonding to fund it, then combining A and B makes sense,” Latham said.
The half cent bump from the districts raised Highland’s sales tax to 8.85 percent on certain retail goods. Items like cars, groceries and medical goods, both prescription and non-prescription, are not subject to the tax.
Highland’s city council will hold a hearing allowing citizens the chance to discuss the possible consolidation of the two business districts Monday, March 4.