The Vermillion City Council gave unanimous approval Monday to an ordinance that, if given final approval at its second reading later this month, will establish Business Improvement District (BID) #2 in the city.

BID #2, in turn, will pave the way for an estimated $2.45 million of improvements to the city’s downtown area. The city will pay 82 percent of the total cost of a downtown streetscape project, with property owners in areas of downtown that will see improvements picking up the remaining 18 percent of the project’s cost through tax assessments.

Assistant City Manager James Purdy told city aldermen Monday that the city council and the BID #2 Board of Directors have been discussing the downtown streetscape project for approximately two years. The BID #2 Board is made up of four downtown business owners and one downtown resident.

“The project would improve infrastructure in the central business district and would include things like sidewalks, landscaping, curb and gutter improvements and also improved pedestrian-level lighting,” Purdy said. “Throughout this project, I think it’s also important to note that we would have an opportunity to also improve ADA (Americans with Disabilities Act) accessibility in our community.”

He noted that some members of the public have raised concerns about the project.

“We’ve heard a lot of concerns about parking. Parking is always a concern here in Vermillion. We, and when I say we I mean the board and Jose (Dominguez, the city engineer) and I, who are the staff liaisons to the board, do not anticipate losing any parking spots to this project,” Purdy said. “There actually should be a net gain in parking, including additional handicapped spots.”

The BID #2 Board and city staff, he added, don’t intend for there to be any street closures once the work gets underway.

“A street may have to be closed temporarily to move equipment around or something like that during construction and there will be public meetings throughout to discuss these types of events before they happen,” Purdy said.

Some citizens believe the streetscape project will narrow downtown’s streets. He assured the council and the audience that it won’t. He noted that some intersections may be expanded with the use of bump outs to make them safer for pedestrians.

“The city engineer has run simulations of every turn along the designated truck routes for large interstate semis and even with the intersections, he notes that all of the turns can be made,” Purdy said.

The BID #2 Board and local proponents of the streetscape project know that it will disrupt business in the downtown area.

“We expect consultants and contractors to find creative ways to work with businesses to minimize their disruptions,” Purdy said. “We realize there are particular properties that might pose some significant challenges, but again, we will challenge the bidders on the project to make this happen.

“It is something that the board is very cognizant of as they themselves are downtown business owners that will see their businesses impacted by this project,” he said.

Purdy said the tax assessments of properties benefitting from the streetscape project will not be imposed until the project is completed and the flow of business is back to normal. Non-taxable property owners, such as non-profits, churches and other organizations, are not included in the special assessments, nor are residential properties downtown.

Streetscape improvements are planned for a business improvement district, or BID, that includes both sides of Main Street from the west side of Ratingen Platz to the east side of the intersection with Dakota Street, both sides of Market Street from West Main to Kidder Street, both sides of Court Street from West Main to Kidder Street, the east side of Elm Street from East Main Street to the first east-west alley north of East Main Street, both sides of Center Street from Main Street to the first east-west alley north of Main Street, and the east side of Prospect Street from West Main Street to the first east-west alley north of West Main Street.

The district is made up of two areas: Area A, which includes properties on both sides of Main Street from the intersection of Main and High Streets east to the intersection of Dakota and Main Streets, and Area B, which is made up of four areas of property surrounding Area A.

He noted that the members of the BID #2 Board, who have put in many hours of work on the planning of the project over the last couple years, are owners of downtown property that will be part of the improvements and will be assessed to help pay for them.

“Through working with them through the last year or so, I know that they are on the board and are present tonight because they believe that this project will be beneficial for their businesses, for downtown and for the community,” Purdy said, “and will help create a sense of space in downtown Vermillion.”

A resolution establishing the boundaries of BID #2 was passed by the city council on April 16, 2018. Last June and July, two public meetings were held that gave downtown business owners a chance to see proposed plans and ask questions of BID #2 board members and city staff.

“There were also a lot of private conversations, a lot of phone calls,” he said. “On Oct. 7, 2019, the board presented a plan to the city council which the city council accepted. Lastly, on Oct. 21, the city council passed a resolution of intent to have this meeting that we’re here for tonight.”

More than thirty days prior to Monday’s meeting, the city mailed notices to owners of taxable property to notify them of this meeting, Purdy said.

Payment Plan

Purdy said the total public improvement that will take place in the area of downtown described above known as the business improvement district is estimated to have a total cost of $2.45 million.

“The costs of the project will be split between the city and the owners of taxable property in the central business district and the business improvement district at a ratio of 82 percent paid by the city and 18 percent paid by owners of taxable property,” he said. “The property owners’ portion of project costs, to be paid in the form of a special assessment, will be based on actual project costs after the project is finished minus any grants or donations that might be received.

The special assessment will be paid in 10 equal and zero interest funds.”

Purdy noted that at the July 29 public meeting, downtown property owners in attendance were presented with several options in which to give input on what they thought was the best formula for the assessment.

“The formula that is proposed was the overwhelming choice of the downtown property owners that night,” he said.

The ordinance approved by the city council Monday will become effective 20 days after the date of publication following its expected approval on its second reading later this month.

“Once the ordinance goes into effect, the BID #2 board and city staff will begin the process to select and recommend a consultant to the city council,” Purdy said. “That’s when will we get better cost estimates as well as dive into the finer details of the project.”

Construction is estimated to begin in the spring of 2021 after being placed out for bid. The goal will be to have all of the work completed by the fall of 2021.

“Again, the city and the board plan to hold public meetings with the general contractor throughout the construction process to help keep the public and affected business owners informed of the progress of the project,” he said.

The city will utilize funds from several different areas to support and fund its 82 percent of the project and will pay all of the upfront costs of the construction.

“After the project is completed, then you would have the city implementing the assessments based on the total cost of the project,” Purdy said.

Ten percent, or $250,000 of the city’s estimated total funding of just over $2 million for the project will come from the city’s Light and Power Fund, and $75,000, or 3 percent of the city’s share coming from the city’s Storm Sewer Fund. The dollars from these two funds will be utilized for new street lights and storm sewer work in the business improvement district.

The remainder of the city’s share -- estimated at $1.678 million -- will come from the city’s Second Penny Fund.

The remaining 18 percent of the project’s costs -- estimated to be $447,000 -- will be paid by the assessed properties in the business improvement district. Of that amount, 90 percent, or $402,000, will be paid by property owners in Area A. The remaining 10 percent, which is estimated to total $45,000, will come from property assessments in Area B.

It is estimated that the annual payments that will be made by property owners in Area A will be $583 annually for 10 years. During that same 10-year timeframe, property owners in Area B will pay $194.50 annually.

“A lot of creativity and a lot of hard work have gone into us getting to this point,” Purdy said. “While at the end of the day this is a downtown project, we view this as a community project. Downtown Vermillion is, in many ways, the front door to the community and the goal of this project is to give our downtown the infrastructure that I think the people want and that the community will benefit from.”

Not all of the comments heard by the city council about the proposed project were positive. Mark Siecke, who doesn’t reside in Vermillion but owns property at 3 West Main, said he personally doesn’t “think the juice is worth the squeeze on this project. It looks to me like it’s pushing a chain uphill. It looks like it’s going to go forward.”

He asked if any grants or donations received to offset the project’s costs would go to property owners or would instead go the city to help with its 82 percent share of the cost.

“State statute for this type of district dictates how grant funding is used,” Purdy said. “Essentially, any grants or donations received for the project would be deducted from the total cost of construction, which would then, in effect, reduce the amounts paid by property owners in Area A and Area B. That’s how state statutes dictate how grants and donations are handled.”

“So, if there’s nothing in writing on that, whatever the board at that time decides to do, if they would decide not to give relief to the property owners, that could happen,” Siecke said.

“No, it is in writing --” Purdy said before he was interrupted.

“It’s not specific,” Siecke said. “It says it comes off the total project. It sounds to me like it is the discretion of the board who gets relief from it. That’s what I hear. It’s pretty vague.”

“If it comes off the total, it seems to me that it would be the same proportion -- 82 (percent) and 18 (percent),” Alderman Julia Hellwege said, adding that those same proportions of the city’s share and the property owners’ share of the cost will remain in place.

“The proportion would stay the same and the reduction would be proportionate to that 82-18 proportion,” she said.

Siecke said the project would increase his taxes by approximately $600 per year for 10 years.

“I sure can’t pass that on to my renters,” he said.

Paul Hasse of Vermillion was also critical of the plan.

“The proposal calls for replacing all of the sidewalks and curb in the central business district,” he said and noted that he was directing his remarks for mainly the stretch of Main Street downtown included in Area A. “Sidewalks do not need to be replaced. Have any council members toured and inspected all of sidewalks covered in District A and B? They don’t need to be replaced.”

Haase also expressed concern that the construction would cause some downtown businesses to close for two weeks or a month. He added that the downtown buildings, which are approximately 100 years old, may be affected by the sidewalk replacement work.

He said that trees, as presented in a preliminary streetscape plan, would block motorists’ vision and claimed that parking would be affected, adding that the planned addition of bump outs would make it impossible for semi-trucks to make turns at some Main Street intersections.

“Right now, Vermillion is known as the second worst city East River for semis to maneuver,” Hasse said. “If you notice all of the semis leaving Vermillion, they go east on Main Street – the mail trucks, the beverage trucks, the food trucks – they don’t use Cherry Street because you can’t turn out there at Dakota and Cherry. That intersection is undersized.”

He was also critical of the possible impact that the work would have on sewer and water lines and the current lighting in downtown, which is scheduled to be replaced in the streetscape plan.

“I think this project is awfully wild, expensive, not needed, it should be refined,” Hasse said, adding it would hurt business by negatively impacting parking.

“I think this proposed ordinance should die for the lack of a second,” he said.

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