A plan to hike rates in the central business district to fund some Te Awamutu Business Chamber activities better have business support or it has wasted a lot of time, Waipā deputy mayor Liz Stolwyk has warned.
The council’s Finance and Corporate committee on Tuesday approved the Business Improvement District proposal – with only Roger Gordon voting against it – going out to landlords for approval.
It needs a 30 per cent response from them and 60 per cent support from within that cohort.
But sources The News spoke to said now was not the right time to introduce the targeted rate.
“Ratepayers are already looking at bigger increases than anyone ever anticipated two years ago,” one said.
And buying a battle with ratepayers when the most recent residents’ satisfaction survey had the council at an all-time low seemed an odd thing to do, another source said.
Gordon said as much in the debate, also suggesting if it was introduced, so too should a district-wide business rate.
He was concerned the presentation by chamber chief executive Shane Walsh and deputy chief executive Ken Morris inferred council supported the project.
“I don’t think that’s right,” he said.
Stolwyk told Walsh she hoped he and the chamber had done the background work because staff spent time investigating the proposal.
Earlier Morris said other towns and cities had introduced the rate, which in Te Awamutu seeks to raise $50,000 in its first year.
It is not the first time councillors have talked about a targeted business rate. It was on the agenda for a public excluded workshop and briefing day for councillors in August.
In a recent newsletter to members, Walsh said businesses were masters of their own destiny.
Benefits of a targeted business rate for landlords and the establishment of a business improvement district included increased competition and rental income potential along with enhanced aesthetics which would increase property values.
Tenants would see increased foot traffic and revenue, town development and collaborative initiatives, he said.
In his paper to the committee, Morris said council would collect the targeted rate on an agency type basis.
“In this respect the arrangement is similar to what we already have in place for rural halls, where rates are collected from rural communities and passed on to the relevant hall entity.”
The council would then pass the proceeds on to the chamber to fund the initiatives it was proposing – to help CBD businesses.
Other towns and cities had introduced business improvement rates, so it was a proven model, he said.
Palmerston North, Warkworth, Gisborne, Taupō, Napier, Whanganui, Rotorua and Kaitaia had all introduced differing forms of the rate.
Cambridge tried to introduce a similar rate several years ago, but it was unsuccessful as it needed 75 per cent support from CBD retailers.
In response, staff lowered the threshold for the Te Awamutu rate to a 60 per cent support from 30 per cent of the ratepayers.
If the chamber secured support at the revised threshold level, the rate would go into the draft Long Term Plan for discussion next year.
Walsh said the money from rates would be supplemented by other private and public funding for initiatives such as events and promotions.
Te Awamutu and Kihikihi Community Board also supported the rate, he said.
“Business improvement districts have yielded remarkable success in other New Zealand towns and cities, revitalising communities, boosting local economies, and enhancing the quality of life for residents and visitors alike.
“At their core (they) pool resources, collaborate with local organisations, coordinate efforts, and strategically invest in common goals,” Walsh said in the newsletter.