Downtown Spokane (4)

The Case to Increase DSP’s Budget by $4 Million Per Year

The Downtown Spokane Partnership (DSP) is a private, non-profit agency that manages a roughly $1.5 million annual budget. The bulk of their annual budget is generated from a special Parking and Business Improvement Area tax (otherwise known as a “business improvement district”).[i]

Trouble is our City’s Parking and Business Improvement Area isn’t even in the parking business, but it ought to be. Annual revenue from the City of Spokane’s public parking meters is about $4 million per year (and growing).

By transitioning DSP into the public parking business, the City and downtown will have a real, market driven tool to finance public improvements – general streetscaping, beautification, street and sidewalk repair, public/private partnerships – whatever the priority is in any given year. Public improvements, however, can only take place within areas of town that have parking meters – downtown, the U-District, and around the Courthouse. The more desirable these areas become as a result of improvements, the more people will come to enjoy the area, which generates more meter revenue for improvements, and hence creating the magic circle of best practices, market driven economic development.

Here’s a four-step plan that explains how and why we should transition the Downtown Spokane Partnership into a self-sustaining economic development organization:

 

Step 1: Create a Public Development Authority

  • How? PDAs are adopted by City Council ordinance.
  • Why? It all starts with having an appropriate legal entity that all the money, employees, and responsibilities will transition into. PDAs can hire and fire employees, take out debt, enter into contracts, sue and be sued, and can do just about anything that a city can do, but for a few big exceptions: they can’t raise taxes, they can’t condemn property, and their board is appointed by City Council. All meetings are open to the public, agendas and minutes are published, and contracts, budgets, emails, and all documents produced by the organization are public documents – just as it should be when you’re conducting the public’s business.

Step 2: Appoint Board Members to the PDA

  • How? PDA board members are appointed by majority vote of City Council; but don’t seat too many, seven is enough to strike a balance between efficient decision making and adequate downtown representation.
  • Why? This establishes a system of checks and balances against the PDA (and all the money they are about to manage). If there are any old-Spokane shenanigans, City Council can simply cleanse the board and replace it with folks more in-tune with 21st century thinking and, at the least, industry standard economic development.

Step 3: Pledge All Parking Meter and Business Improvement District Revenue to the PDA

  • How? Pursuant to state code, City Council is the governing body for Spokane’s business improvement district. Therefore, by executing a simple contract, they can delegate both the parking meter and the business improvement district revenue to whomever they like, including a PDA.
  • Why? Between parking meter revenue (about $4m annually) and business improvement district revenue (about $1m annually) instead of treading water and wasting time with fundraising and generally asking other people for money, with $5 million per year in revenue, this PDA has two sustainable, market driven revenue streams to get create results (as opposed to just taking credit for decisions other people have made).

Step 4: PDA Hires All DSP Employees and All City of Spokane Meter Maids

  • How? By filling out a whole lot of W4s.
  • Why? As you can see, the Downtown Spokane Partnership just transitioned into the Downtown Spokane Public Development Authority (and you hardly have to change the acronym!). Now, City Council appoints the board, the budget just increased by $4 million annually, it’s a public agency whereby sunshine laws apply, and pay-to-play fundraising is no longer an obstacle that detracts from improving downtown. But wait, there’s more: the City’s budget decreases because all the labor and expenses associated with managing public parking is now DSPDA’s responsibility, including River Park Square debt service. To boot, the City saves an additional $100k per year because they are no longer paying the old non-profit DSP to manage their business improvement district revenue.

Effective economic development is a process of creating market driven tools that the public can leverage to improve the community. But when you’re a hammer, everything looks like a nail, and when you’re in the fundraising business, there’s no problem a little more charity can’t solve. For Spokane to evolve into a 21st-century city, detaching fundraising from economic development is a great place to begin.

 

This blog is written by Mike Tedesco, officially a candidate for Mayor of Spokane, 2019. Check out his other totally awesome website at votetedesco.com.

 

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[i] Technically, the public revenue DSP manages is “assessment” revenue but, because it looks, smells, and feels like a tax, most folks just call it a tax. What’s the difference between an assessment and a tax? It’s illegal to skip paying your taxes. There are no legal consequences for not paying your assessments.