High Point council reviews municipal service district plan for downtown; no ordinance introduced

Stephen Howarluk, the city’s budget performance director, presented an overview of municipal service districts (MSDs) to the High Point City Council at a special meeting, describing how a locally created MSD could levy an additional property tax on taxable real and personal property inside defined boundaries to fund “enhanced” downtown services.

Howarluk said municipal service districts “are a defined area within a city where the elected body levies an additional property tax and that revenues from that property tax fund enhanced ... services.” He explained that statute-language allows downtown revitalization as an authorized MSD purpose and stressed that MSD revenue may not be used to supplant services the city already provides.

The presentation outlined statutory and procedural requirements for creating an MSD: a preliminary report that includes a property map and a statement of need; public availability of that report for at least four weeks; mailed notice to property owners four weeks before the required public hearing; a published notice at least one week before the hearing; adoption of an ordinance (statute changed this from “resolution” in 2016); and an effective date at the start of the next fiscal year (July 1). Howarluk also described options for service delivery (city staff or a contracted organization), noting contracts must generally be procured via competitive bidding, cannot exceed five years and require another public hearing before award. He said an awarded organization would be required to solicit owner/resident input at least annually, deliver an annual written and in-person report to council and provide accounting of expenses to a designated city official.

Howarluk gave illustrations of downtown activity and need that would support a statement of need: 869 new jobs since 2019, roughly 3,000,000 visitors to downtown High Point in 2024 (a 15% increase), a hotel opening in the coming weeks, about 30 new downtown housing units already and roughly 293 additional units planned by 2028, and six new commercial or restaurant openings planned around the stadium by 2026.

The staff presentation included a draft boundary roughly bounded by State Street on the north, Main Street through the core, Hamilton and Wren to the east, a railroad corridor and Lindsay on the south-east edge, and noted the map was a proposal and could be revised prior to any formal adoption. Howarluk also provided a taxable valuation used for revenue scenarios: $217,115,152. Using that base and a 99% collection assumption, staff modeled revenue for sample levies (staff noted each penny of levy yields about $22,000); council members cited a roughly $193,000 annual-revenue estimate when discussing a likely near-term levy.

Council members pressed staff on several operational questions. One asked whether the city currently has staff capacity to administer an MSD’s required ongoing work; Howarluk replied staffing needs depend on the services chosen and whether the services are provided in-house or contracted. Council members also questioned timing: several said they wanted comparisons to other North Carolina cities (Charlotte, Raleigh, Greensboro, Winston‑Salem were cited) and case studies showing when other downtowns implemented MSDs relative to their redevelopment timelines. Howarluk said staff would research peer examples and provide more comparative information.

Council members and residents raised concerns specific to High Point’s showroom and market districts. Howarluk said city staff had held initial conversations with the Market Authority and that showrooms within any approved boundary would be subject to the levy. He cautioned that attempting to draw boundaries that exclude showrooms could make an MSD “very difficult … to enforce,” and that the city planned parallel outreach to affected showroom owners.

On how MSD revenues would be used before taxes are collected, Howarluk explained that the city would budget anticipated MSD revenues in the fiscal year prior to collection; the tax would formally take effect July 1 but planned contracts and budgets could be set in advance, consistent with normal municipal budgeting practice.

Councilman Andrews pressed the question of grant programs, saying, “with only a $193,000 of revenue, [I’m] curious on what these grants are going to be for interior and exterior renovations because you can eat up a lot of money on a renovation.” Howarluk and others said service and grant priorities would be set by council (or by a contract scope), and RFPs or contract terms could limit how much of a program budget could be devoted to building-upfit grants.

Several council members said they wanted more analysis before staff prepares the formal preliminary MSD report. Staff described the next formal steps: staff prepares the preliminary report and map, makes it available for the required public inspection period, schedules the statutorily required public hearing and—if council votes to proceed—adopts an ordinance and sets the levy as part of the annual budget process.

No ordinance or vote on creating a municipal service district occurred during the meeting; the item was presented for council discussion and follow-up direction.

Looking ahead, staff said they would return with comparative case studies of other municipalities’ MSDs, refine outreach plans with Downtown High Point and the Market Authority, and provide additional detail about projected revenues and a draft preliminary report if council wishes to proceed.