Special tax for downtown?

January 29, 1992

Ever since successful suburban shopping malls began strangling downtown retail districts, urban merchandising gurus have been itching for revenge. But although intriguing strategies have been developed, most have fallen flat on their face. Take pedestrian malls, for example. Two decades ago, they were touted as the prescription that would bring well-heeled customers back to downtown shopping areas throughout the nation. In most places, that never happened.

The pedestrian mall concept was essentially an attempt to hide a larger problem with a Band Aid patch. It seldom worked because the overall problems of downtown -- its perceived crime and grime -- were not addressed.

To attack these root causes, more than 1,000 cities across the United States have established special benefit districts to finance the improved competitiveness of their downtown business areas. For an extra fee contributed by merchants, security and sanitation have been boosted, promotion and decorations coordinated. In short, cities have borrowed pages from the the management success stories of suburban malls.

For the past decade, this approach has been tried out in a limited way in Baltimore, too. The Downtown Partnership, a private booster and management group, has spearheaded efforts to make the city's commercial core more appealing.

A proposal has now been made to replace this voluntary action with a special tax district that could levy a 5 percent surcharge on commercial real estate taxes on 1,000 private properties in a 90-block area. "With the decline of federal dollars, state cutbacks and the need to devote large portions of its limited resources to education and other essential services, our city can ill afford to be the sole keeper of downtown," explained H. Grant Hathaway, chairman of Maryland National Bank and one of the idea's supporters.

Special tax districts have a good track record in many cities. An example:

Only a year ago, financially strapped Philadelphia's downtown was so seedy it was known as Filthydelphia. But after a privately run municipal authority, Center City District, was inaugurated in March, improved sanitation, security and promotion created a new image for the business core. "Could it be," asked the local City Paper, "that something in this city is actually going to work?"

Although the special tax district for Baltimore has the backing of Gov. William Donald Schaefer and Mayor Kurt L. Schmoke, the proposal faces difficult legislative maneuvering both in the General Assembly and City Council. Yet it is an idea that has enough merit to deserve a fair hearing.

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