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Conflict grows over tax plan

Downtown landowners are upset with the city over tax plan to benefit businesses


by: POST PHOTO: JIM HART - George Hoyt, chairman of the Sandy Main Street Steering Committee, stands in the middle of Sandys commercial zone. Hoyts views on how to build the citys Main Street programs is not popular with some landowners.by: POST PHOTO: JIM HART - Dale Hult, a downtown Sandy service business owner and landowner, does not agree with the concept of landowners paying an assessment that is designed to benefit retail businesses. There is a growing conflict in Sandy that has the potential of destroying three years of work to build a Sandy Main Street program.

On one side of the divisive issue are proponents of the Main Street concept, who want commercial landowners to pay the salary of a Main Street director and all program costs.

On the other side are landowners who are upset they are being targeted for an expense and a program for which they receive no benefit.

Some landowners are saying businesses would benefit and they should pay the price, while others say the program should be conducted by the Chamber of Commerce.

Sandy Main Street, part of a national program, has the goals of building downtown business growth and prosperity, promoting local products and local vendors and encouraging specific types of missing businesses to relocate in Sandy and fill empty storefronts.

But Sandy Main Street soon will come to its moment of truth because its executive director has left town and the city’s general fund is no longer supporting the program.

Main Street proponents are concerned about gaining enough funding to hire a full-time executive director and pay for Main Street programs.

A volunteer steering committee, with George Hoyt as chairman, wants to assess landowners $58,000 to create a nonprofit Main Street — separate from the city in administration, although more than $30,000 additional could come from business license fees to fill the $90,000-plus budget.

Hoyt says Main Street programs can turn around Sandy’s poor economy.

“We need to get out of this 20-year stagnation of downtown,” he said, “where literally the only thing we’ve seen happen is that small businesses have come and gone and left vacancies. The thrust is to get out of that cycle.”

The steering committee is trying to create an economic improvement district (EID), allowed by state law, that would require anyone who owns commercial land in downtown Sandy to pay an assessment based on the number of square feet of land owned (5.5 cents per square foot per year).

On the other side of the controversy are those who do not want to pay those costs because they say the programs do not benefit them in any way.

These naysayers are not directly connected with the businesses that Sandy Main Street would support. Almost all of them are just owners of land zoned commercial.

Some are owners of vacant land, but, under state law, an EID would require an owner of vacant land to pay the same assessment as a landowner with the same size lot that has a viable business operating.

Landowners exempt from this law are fraternal organizations, residences, churches and nonprofit organizations.

Landowners would be required to pay, under threat of a lien on their property, even if they have no interest in a business — even if the landowner is a widow holding onto an investment for retirement income from rent or lease payments.

Bettie Tee, for example, says the proposed tax would hurt local businesses rather than help them. She says she also will feel the pinch because she’s a retired landowner and “also on a small margin, trying to make a living.”

“We have a lot of businesses in town that are just barely making it,” she said. “I have hit the streets and talked to a lot of (business owners) on this feud, on this tax, and got votes. I feel that it will do a lot of harm to small business owners, whose margin for profit is already small.”

Some landowners say this is not fair because those who must pay have no interest in the success or failure of the business on their land and they would receive no benefits from the success of Sandy Main Street.

Main Street fans say state law allows the city to impose this assessment and impose a lien on property if necessary.

Hoyt says landowners don’t have much to complain about because it’s deductible.

“Land owners can take (the EID cost) off their taxes as business expense,” he said. “In that way, they get it back.”

In addition, accusations are flying around town about the amount of pressure being applied to not vote against the EID. For example, a letter has been sent to all of the landowners who voted no to the EID, asking them to change their vote to yes.

Sharon Fosses and her husband, Nick, are retired and say they feel intimidated by the tactics of Main Street advocates. They own the land where Stephanie’s Café and Ria’s Bar are located.

“This is a really unfair tax, in my opinion,” said Sharon Fosses. “I mean, if someone was reaching their hand into your pocket (landowners) and saying this is what we want to do for someone else (business owners) and we want you to pay for it, I don’t think you’d like it.”

Fosses also is upset because she does not have the ability to increase rent on her buildings to cover the cost of the new assessment. Her tenant, she said, has a five-year lease at the current rent amount. Meanwhile, Fosses said, the assessment can automatically increase 3 percent each year.

A better option, in Fosses’ opinion, is to make supporting the Main Street program voluntary, not required.

But Dale Hult, who owns the land and business called All County Surveyors & Planners, says Main Street programs benefit retailers, not service businesses such as his.

Hult says there’s a lot of politics involved in this issue, and he is pretty confident that the eventual vote will show there are enough people voting against the EID to defeat it before the council has a chance to implement it.

“We’re holding our cards close to our chest,” Hult said. “We’re not going to play all our cards because we don’t trust city hall.”

Hult’s business is on Pleasant Street, which is a Tier 2 area — giving him the advantage of half-price assessments. So instead of $422, his proposed annual assessment would be $211.

Hult says he is in favor of Main Street being successful in all the towns and cities where it exists, including Sandy, but he opposes the proposed method of funding the local program.

“This should be funded by the tenants,” Hult said, “who are the people who will get the most bang for their buck and are the most willing to participate. Why not tax the tenant, rather than the property owner, so that person is involved in his own destiny?”

Some landowners have even more negative views.

“It’s just not fair for people to come in and say we have an idea on what we’d like to have done here,” Fosses said, “but we’d like you to pay for it. This is just nonsense.”

Hoyt says, “I’m trying to build the future of this city.”

If the proposal does not have 33 percent of the assessments voting no, the Sandy City Council will consider the ordinance on its second (and last) reading at its Oct. 15 meeting.

For more information, call Planning Director Tracy Brown at 503-668-4886.25