The future of Sault Ste. Marie's Downtown Association could be decided at next week's city council meeting.
Three options will be presented to councillors at their next meeting on Monday.
Two of the options involve dissolving the 49-year-old business group and bringing all downtown-related services under the city's umbrella.
Mayor Matthew Shoemaker will be pushing to deep-six the Downtown Association.
"I believe the time has come to transition downtown development services from the Sault Downtown Association to the city," Shoemaker said in a statement to SooToday.
“The City of Sault Ste. Marie has invested significantly in our downtown over the past several years, and it’s clear that while progress has been made, more is needed – and we can do better.
"This model has worked well in several other municipalities, including Oshawa, where it has led to improved service delivery and greater financial efficiency.
"Council asked staff to examine what other communities are doing to revitalize their downtowns, and the evidence is clear: bringing these services in-house is the most effective path forward.
"We’ve already seen the benefits of this approach in Sault Ste. Marie through our successful integration of economic development and tourism services into the city’s operations. That transition streamlined processes while maintaining strong industry oversight through a dedicated advisory board. I’m confident we can replicate that success and deliver better outcomes for our downtown and our community as a whole,” Shoemaker added.
Founded in 1976, Sault Ste. Marie's Downtown Association has about 400 members including 150 building owners and about 250 tenants.
It officially covers a stretch of Queen Street more than one kilometre long, but in recent years has started to champion a bigger swath of the downtown ranging from Station Mall to the south, the Gateway site to the west and the old hospital to the east.
This broader area is often described at the Downtown Association offices as "river to rail."
It was founded as a business neighbourhood that taxes itself to deliver beneficial programs to our city core.
The city collects about $219,000 a year from downtown businesses and property owners, of which $147,000 pays the salaries needed to deliver events and services.
Here are the three options that Brent Lamming, deputy chief administrative officer for community development and enterprise services, will present to city council:
- maintain the current Business Improvement Area (BIA) and Downtown Association (DTA) funded by BIA businesses
- dissolve the current DTA and bring all services under the city umbrella
- dissolve the current DTA and reallocate activities under the city umbrella with a supporting business advisory committee and some incremental staffing. This approach would be similar to what is in place for Tourism and Economic Development. An advisory board with downtown business owners would be selected for participation based on a selection process similar to the current committee process
"BIAs are the traditional method of activating and promoting downtown business cores for Ontario municipalities, but there have been a number that have been dissolved in recent years, bringing the responsibility under city umbrellas utilizing city resources to activate and promote downtown areas," Lamming said in a report prepared for the mayor and councillors.
"Reasons for the dissolution of BIAs include rising operational costs, reduced volunteer involvement, and alternative funding needs. This has driven some municipalities or business groups to re-evaluate the traditional BIA model."
If the city scuttles the Downtown Association, it won't be able to access the $219,000 a year that it collects from downtown properties.
"The downtown levy is an additional levy added to the properties within the BIA boundaries," Lamming said.
"If the Downtown Association is dissolved, the additional levy for the BIA would be eliminated, resulting in a reduction of the annual property taxes for the members.
"Assessments would not change from DTA elimination. If the city takes on the responsibilities of the BIA, the city will no longer have that additional levy and expenses for downtown activation and programming will be placed on the entire tax base."
Here are the pros and cons to each of the three options, as laid out by Lamming:
Option 1 – Maintain the current delivery model using the DTA to support the BIA
Pros:
- maintains the current business levy of approximately $219,000 for annual program delivery
- opportunity to improve communication by implementing quarterly meetings between DTA and city staff
- maintains opportunity for grant funding that the city would not be eligible for (approximately $5,000 annually)
- avoids risk of moving away from an established, traditional delivery model
Cons:
- the DTA could be challenged to maintain talent long-term based on historical turnover in positions
- limited staff resources for delivery with a smaller team
- reliant on city staff for support where activities are now being completed by city forces, including downtown foot patrols, banner installation and removal, flowerbed maintenance and Christmas lights and decorations
Option 2 – Dissolve the current DTA and bring all services under the city umbrella
Pros:
- maintain a full-time employee and part-time hours for dedicated downtown program delivery reporting to the Downtown Plaza supervisor, thus saving local businesses to fund the current positions
- improved efficiency using city support service areas such as accounting, finance, legal and information technology
- opportunity to improve events with additional city resources
- save on operating expenses by using city facilities to house staffing (e.g., rent paid by DTA)
- service the entire downtown core beyond current BIA boundaries
- key performance indicators and metrics can be implemented for tracking, consistent with other city departments
- an annual report can still be provided to council to highlight success and challenges
- downtown businesses currently paying the assessment will no longer have to pay, allowing them to use the funds within their respective businesses
Cons:
- the current pool of BIA-assessed funds, which is collected from members in the amount of approximately $219,000, would be forgone. Any remaining levy would be transferred for program activation in the final year
- perception of the downtown business members losing their voice
- some services could be impacted, such as snow removal for business entrances
- future councils could cut city budgets, leaving downtown businesses at risk of no formal downtown support activities
Option 3 – Dissolve the current DTA and reallocate under the city umbrella with a supporting business advisory committee
Pros:
- the same as Option 2 but also allows for an ongoing voice from business owners with active participation on the advisory committee
Cons:
- the same as Option 2 and requires additional resources to organize, coordinate, and administer the business advisory committee
One alternative idea that Lamming offers would be a hybrid solution in which the city would cover part of the BIA budget, therefore reducing the special levy on the downtown businesses.
The City of Thunder Bay has taken this route, paying half the requirements for two BIAs.
Next week's city council meeting will be livestreamed on SooToday starting at 5 p.m. on Monday.