Will new taxes be business magnet for Eden?

By Heather Smith

Published: June 24, 2008

Beginning Tuesday, businesses in parts of Old Leaksville and Draper Village officially become part of two municipal service districts to collect revenue that fund improvements to attract more business downtown.

An MSD establishes a special property tax in a business-intensive area. State average for tax rate is about 16 cents for every $100 of property value.

Revenue is dedicated exclusively to the cost of anything the district’s board of directors believes will improve business. Those expenditures often buy improvements merchants want, but they may take the city government years before room is made in the budget.

The Eden City Council last week unanimously approved MSDs to include about 100 Leaksville and 54 Draper businesses. Both districts are in the early stages of choosing its board, which will decide tax rate and how revenue is spent.

Linda Wyatt is president of the Draper Village Merchants Association and encouraged business owners to support MSDs. Wyatt became an advocate when she observed what other small towns like Salisbury, Reidsville and Concord accomplish with the funds.

“I went to Salisbury to look at what they’ve done, and they’re really doing great things,” she said.

Wyatt and other Draper merchants see the tax as more of a fund. Each contributes their share and the balance is spent on events, fixtures, awnings, decorations or anything else that will set the shopping district apart from its competition, such as national chain stores that look the same in every town.

Wyatt believes business owners should take up where city government support leaves off. Merchant effort, she believes, will be a positive supplement to improvements bought with public funds.

“If city is putting forth the effort to make Eden look nicer, business owners can take it one step further by looking at ways they can attract more customers,” Wyatt said.

Once enough support was found, letters were sent to all affected property owners, informing them of the proposal and an estimate of their yearly charge. The letter included an invitation to informational meetings for owners in both areas to ask questions and voice concerns. Wyatt and Mike Dougherty, Eden business development director, said both meetings saw only a handful of attendees.

Other small towns have successfully used MSDs to breathe new life into their historic downtown areas. Betty Ann Collins, president of the Greater Mount Airy Chamber of Commerce, said downtown improvements made possible by revenue snagged Mayberry tourists, turning streets once prone to empty storefronts into bustling retail areas.

“It has been extremely beneficial to businesses in the (MSD) and to the people who frequent them,” Collins said. “Not only does this money go to pay for improvements like facades and awnings, but it renovates parking lots and adds services to the visitors center.”

Collins credits good management of MSD revenue with part of downtown Mount Airy’s success. Advertising, beautification, activities and other small touches drew 58,000 people through the Mount Airy visitor’s center last year.

But there are some who feel they will have little to gain from a required tax. Blooming flower boxes and antiques festivals may entice people into gift shops on weekends, but fewer will stop by a computer repair or an auto maintenance business on a whim. State statute requires that MSDs are either all or nothing – businesses in its boundaries participate if the measure passes and none may opt out. That hitch irked some business owners, who feel their customers will be attracted by good prices and quality services, not an attractive street.

Billy Vestal owns two buildings on Washington Street. He believes another expense, no matter how small or innocuous, is harmful when the economy is poor.

“Well, as I told Mr. Dougherty, this is a bad time to begin this sort of thing,” Vestal said. “Our property taxes just went up, the price of gas is going up, food is getting more expensive. Right now, we need to save.”

Vestal said in his 25 years of business experience he remembers few Washington Street events that resulted in more customers.

“Even if you have a parade, 30 minutes after it’s over the people are all gone,” Vestal said.

Nonetheless, with the city’s adoption of MSDs, Vestal said he must comply. Still, he feels the few merchants who pushed for the tax will receive most, if not all, the benefit.

“There are 60 plus properties down there. Most of them didn’t even know what they were planning. Eleven people spoke in favor of the tax,” Vestal said. “ Eleven people spoke for 68. I don’t think that’s a very democratic process.”

• Staff writer Heather J. Smith can be reached at or 623-2155, ext. 15.