The City of Washington's push to revive the Washington Plaza shopping center is likely getting a monetary shot in the arm.
The Washington City Council on Tuesday gave its initial approval to establish the city's first Business Development District [BDD], which is expected to generate about $700,000 annually through a 0.25% sales tax on purchases of most items within the proposed district.
Food, drugs and titled items like automobiles would not subject to the BDD sales tax, the same restrictions as the city's home rule sales tax.
Washington Plaza, located in the city's west end, is within the proposed district's boundaries.
The boundaries stretch east along Washington Road and Peoria Street to just past Wilmor Road. Freedom Parkway and North Cummings Lane are included in the proposed district.
"The proposed district encompasses a significant portion of the community's primary commercial areas," said City Administrator Jeff Fiegenschuh.
Revenue from the BDD sales tax, which would increase the total sales tax to 9.25% within the district, can be used only for eligible economic development and infrastructure projects in the district, not items like salaries or pension payments.
"This isn't a property tax-based economic development program. It's a sales tax-based program," Fiegenschuh said. "Our ultimate goal, and when I gave you my list of goals when I was hired, I said ultimately what I'd love to do is see the city eliminate its property tax levy."
If the council approves the BDD at its next meeting Sept. 15 — the proposed district would go into effect Jan. 1 — Washington would join several other area communities that already have a BDD in place.
The communities include East Peoria, Pekin, Morton, Tremont, Creve Coeur, Peoria, Peoria Heights, Bartonville and Hanna City. Many have a higher BDD sales tax than what Washington is proposing.
Pekin, Tremont, Creve Coeur, Peoria Heights, Bartonville and Hanna City each has a 1% BDD sales tax. The Farm Creek and Target districts in East Peoria each imposes a 1% BDD sales tax, and the Costco district in East Peoria has a 0.5% BDD sales tax.
Fiegenschuh listed 10 benefits of Washington's proposed BDD:
- • Dedicated economic development funding.
- • Infrastructure investment.
- • Washington/Sunnyland Plaza redevelopment.
- • Business recruitment.
- • Support for exiting businesses.
- • Redevelopment of vacant and underutilized properties.
- • Strengthening the city's tax base.
- • Local reinvestment.
- • Limited impact on essential purchases.
- • Long-term economic development.
Council member Jamie Smith said she'd like to see the district eventually extend into the east end of the city.
Several council members expressed concerns about the city's current business improvement grant program.
With the establishment of the BDD, they said, they'd like to see the program eliminated, reduced from the current $250,000 annually available in the general fund, or substantially changed.
A required public hearing on the BDD was held before the council meeting. Nobody from the public spoke.
A new park and infrastructure work are among the planned improvements in Washington Plaza in a combined effort of the city and property owner.
