Morgan Hill Aims to Tax Downtown Property Owners

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Tax could raise $75,000 annually to beautify downtown
Morgan Hill – A year after they failed to convince downtown property owners to raise taxes to beautify downtown, leaders of the Morgan Hill Downtown Business Association will try, try again.

“We’ve gone back and listened to what some of their complaints were,” said downtown association President Gary Walton. “Rather than having just the property owners pick up the tab, we want the property owners, the merchants and the city to be the three legs of the stool. It takes everybody. If you take one leg away, the stool won’t stand.”

If it passes, the typical downtown property owner would pay about $500 a year, though some could pay as much as $2,000. The money, a total of $75,000, would be used to add some sparkle to downtown, with projects such as improving lighting, installing benches and landscaping and cleaning streets and sidewalks.

“Part of the value is the money, and part of the value is that it starts us down the path where we can do some things to create a more dynamic downtown,” Councilman Greg Sellers said. “It provides a level of resource stability and it’s going to go toward things they really want to get done.”

To conduct the vote, a simple majority of downtown property owners must first sign a petition of support for the district, and the city council must vote to hold the election. It will pass if a simple majority of owners, based on the total assessed value of downtown property, give their approval. The votes of owners with larger holdings carry more weight.

Last year, the assessment district received about 46 percent of the vote and failed. To make it more attractive, the downtown association has reduced the tax increase by about a third and tailored the district boundaries to cover a smaller area.

The district would be bordered by Main Street, Butterfield Boulevard, and Del Monte and Dunne avenues, a smaller area than the downtown defined by the city’s growth control ordinance.

The changes appear to be working. Rocke Garcia, who owns the former Sunsweet plant site at the corner of Third and Depot streets, voted against the district last year, but will support it this time around.

“I think it’s more viable this year,” Garcia said. “It’s a much more positive expenditure of moneys. Hard dollars actually cleaning things and brightening things up, not advertising dollars.”

The downtown association hopes to enlist merchants and the city to pay for consultants and marketing. The association will also consider creating a business improvement district, which would require additional fees of downtown business owners.

Walton said the fee, which would be assessed on business licenses, is a way to generate more revenue for downtown and ensure that all merchants support improvements that benefit the area. Less than 25 percent of 180 downtown merchants belong to the downtown association.

“We don’t have a big enough downtown,” said Walton, who owns buildings in downtown Morgan Hill. “Property owners just can’t carry the entire burden.”

Michael Castelan, a downtown association member who runs Poppy’s Fish and Poultry, said he would support paying a higher license fee if he could be certain to see its benefits.

“If it’s for a real good reason, I don’t mind paying the extra money,” he said. “I would have to see where they’re going with it and what they’re trying to do.”

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