St. Paul wants to expand privately funded Downtown Improvement District to include Lowertown

The nonprofit St. Paul Downtown Alliance wants to expand its privately funded Downtown Improvement District into the Lowertown neighborhood, a move that would double the group's budget needs for street cleaners, safety ambassadors and other services aimed at shoring up the capital city's hub.

The existing district, which launched in 2021, would stretch to cover all of downtown, from the Xcel Energy Center to CHS Field. Thanks to a law passed by the Legislature last year, residential property owners would also start getting assessed for the services.

But for that to happen, the Downtown Alliance needs to drum up support. If owners subject to 35% of the proposed service charges file objections, the proposal is vetoed.

"We really feel we can make some improvements down here," Joe Spencer, president of the Downtown Alliance, said to a crowd of about 30 downtown residents gathered at the Buttered Tin last month. "We really think we can deliver some good value."

By this point, Spencer's pitch was well-rehearsed. The existing district has seen a 40% drop in what St. Paul police call "quality of life" crimes and calls for service, he said, for issues like graffiti, vandalism, disorderly conduct and panhandling. Over the same period, Lowertown saw the same types of calls increase by 25%.

"Making half of downtown better isn't enough," Spencer said. "People don't know where these imaginary lines are."

The boundaries of the current district were drawn to bypass downtown St. Paul's largest property owner, Madison Equities, which refused to back the concept in 2021. After the company's longtime owner, Jim Crockarell, died earlier this year, his wife listed Madison Equities' entire downtown office portfolio for sale.

Representatives for Madison Equities did not respond to requests for comment. Spencer said the company makes up about 15% of the proposed new district, meaning it cannot single-handedly veto the expansion.

Property assessments would be calculated based on a building's square footage, street frontage and use. Residential properties would get rates discounted by 40% and combine to contribute close to a quarter of total assessments. Income-restricted housing is exempt under state law.

Government buildings are also exempt, but the city and county would voluntarily chip in a combined $678,000 next year, according to the Downtown Alliance's proposed $2.7 million budget for the expanded district.

If approved, the expansion would allow the district to add safety ambassadors with better training and equipment, Spencer said. The additional funds would also pay for a city attorney exclusively dedicated to pursuing chronic offenders and quality-of-life issues downtown.

The existing district, which is overseen by a board of property owners, contracts with the Downtown Alliance to manage operations like its safety communications center, where a dispatcher helps coordinate communications between private security teams, police and social service agencies. With a camera-sharing program and live communication channel, officials in the center are able to see and spread real-time safety information.

Olaf Minge, who bought a condo near Mears Park last fall, said he notices the impact of the street ambassadors weekly when he volunteers to pick up litter. Blocks within the current district will be spotless, he said, while others will have plenty to clean.

The average condo owner would pay $65.50 a year to the new district, which "doesn't hurt the pocketbook," he added.

Minge said he thinks most neighbors support the idea. Alicia Hinze, who's owned the Buttered Tin for 11 years, noticed similar sentiment among the group asking questions at her restaurant.

"I agree that it can't always be put on government to correct all the things," Hinze said. "The private sector and citizens have to do our part as well — not just pay taxes and assume everything is going to be taken care of."

Hinze said she leases her space, meaning she would not be directly assessed for the district. But she assumes the fees will eventually trickle down to most downtown tenants.

However, longtime Lowertown commercial property owner David Brooks said he's lost most of his office tenants in the wake of the pandemic. He already received a notice in the mail saying if the district is approved, he would owe about $3,000 in assessments for one of his four buildings.

"There are enough taxes without creating a special interest district," Brooks said. "We clean our own sidewalks. We take care of graffiti. We have guards."

He added that he thinks the proposed expansion will be vetoed by property owners. That's what happened along W. 7th Street last year, when the Downtown Alliance attempted to extend its services to the area.

City Council Member Rebecca Noecker, who represents downtown, said the purpose of an improvement district is to provide services "above and beyond what the city would do on its own."

"For better, for worse, we've had the chance to have sort of a controlled experiment," she said. "It's in some ways proving its value just by the very fact that we only have it in a portion of downtown right now."

Spencer said he expects the proposal to be introduced to the City Council in the coming weeks. If the council gives its approval, there will be a 45-day window for property owners to register objections. Property owners will also have future opportunities to file objections once a year during the city's budgeting process.

"This is a tough moment for downtown," Spencer said. "If we don't get the clean and safe piece right, the rest doesn't matter. If people don't feel safe, people won't come. If people won't come, the investors won't come, the developments won't come. This is kind of essential."