Business

Report urges city to expand Seventh Avenue tax district

Seventh Avenue Advisory Board members Terry Ketcham, Carson Calton, the chair, and Jim Kastetter discuss development strategy in a meeting on June 9.

By Bill Moss, Published: June 13, 2014

Consultants studying ways to spark redevelopment of the Historic Seventh Avenue District recommended that the city expand the district, adding 36 properties and doubling the taxable value, from $7.8 million to $15.5 million.

The expansion would also double the revenue, from $9,871 to $19,507 a year. The 36 new properties would see their city property tax bill rise by $276 a year on average.

The consultants, Rory Dowling, of the Development Finance Initiative based at the UNC School of Government in Chapel Hill, and Will Lambe, director of Community Economic Development at the school, also recommended that the Hendersonville City Council designate Seventh Avenue as an urban redevelopment area. Its revitalization would be guided by a commission that would be more agile than the City Council. It could buy and sell property and put in place incentives and grants as economic development incentives.
Under the proposed expansion, the 36 additional would pay the municipal service district tax of 12 cents per $100 valuation. The district currently covers 86 properties valued at a total of $10.2 million. But three of the properties are government owned and two are church-owned, reducing the taxable value to $7.8 million. The 36 additional properties — none of which are tax-exempt — would add $7.65 million in taxable value. The recommended expansion would take in King Hardware across U.S. 64 from the main district and a hair salon and office building on Seventh Avenue between North King and North Grove streets. It would also take in the Henderson Oil Co. and Reaben Oil Co. property between Ashe and Maple streets and would extend down the north side of Locust Street to Ninth Avenue.
The consultants' report on the 76-acre Seventh Avenue District found that 49 percent of the properties are distressed. Among the problems the report noted was a lack of consolidated ownership, the lack of a gateway to the district, blighted housing south of Seventh Avenue and a perception that the area is unsafe. Little to no redevelopment is taking place, nor is any new construction or renovations likely without the creation of a focused urban development effort, the report said.
The expansion of the district boundaries would likely draw opposition.
"You're going to get questions from folks (added to the district) that if they paid into it, what are they going to get?" said Carson Calton, owner of City Tire on Seventh Avenue and chairman of the newly appointed Seventh Avenue Advisory Committee, which has replaced the old nonprofit Historic Seventh Avenue District Committee in guiding redevelopment. The committee met for the first time on Monday night.
City Manager John Connet said the property owners could see improvements like trash cans, hanging baskets and streetscape work. The old Historic Seventh Avenue District Committee has a cash balance of $34,443, and that could be used for façade grants and other improvements, Connet said. Although there had been discussion about dissolving the old committee, Connet said he and city staffers thought better of that.
"Our plan is to keep the nonprofit in existence," he said. "I'd like to keep a good bit of that money in the nonprofit's name. That way if we did do façade grants or help private property owners make improvements, it's going to be a lot easier to do it out of the nonprofit than through the city's coffers. There's not as many strings associated with the nonprofit."
Calton, a veteran of Seventh Avenue redevelopment efforts, said when expansion of the district has come up in the past, property owners have balked.
"They were very nervous about being included because they felt like it was going to be a huge hit for them and they'll ask what do I get out of this?" he said. "If we extend it, we've got to produce a vision of value to them."
If it created an urban redevelopment area, the City Council could appoint or function itself as a Redevelopment Commission to guide revitalization. Under the law, the commission could acquire and sell property to developers, grant development incentives, issue bonds to finance construction projects, encumber property with covenants to advance redevelopment goals and condemn and demolish blighted properties, the consultants said.
"I think it has some real possibilities on some very selective properties," Mayor Pro Tem Ron Stephens said of the urban redevelopment approach. "If we're going to move forward down there, some of that is going to have to be done I think. When you say condemning property everybody gets hyper, and I am not for condemning property. Those people should get market value for their property."
Stephens said the new advisory committee is an important part of the process.
"We're trying to really plug them into this," he said. "They have to be involved in this and they want to be."