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Council amends Landmark CID to exclude residential units, moves to notify state
Summary
Hutchinson City Council approved an amendment excluding residential addresses at 501 N. Main from a 2% Community Improvement District (CID) sales tax, a change staff says the state Department of Revenue has agreed will separate commercial and residential addresses for tax purposes.
The Hutchinson City Council voted to amend a Community Improvement District ordinance so that the 2% CID sales tax would apply only to commercial storefronts at the Landmark property at 501 North Main and not to the residential addresses above them.
Angela Richard, the city’s director of finance, told the council the amendment was designed to separate Main Street commercial addresses from the West 5th residential addresses so the state could identify which purchases were subject to the CID. "We found that out after we had passed it," Richard said, describing how staff and the Department of Revenue reviewed the property and agreed the split would work.
The public hearing on the amendment drew questions from residents about whether the CID applied beyond the Landmark building and whether customers would pay the extra 2% at restaurants. Richard said the CID in this case applies only to businesses located on the building’s lower floor. Resident Duke Duvall asked whether other businesses in the district were also taxed; Richard replied the CID covers only the commercial space at 501 N. Main.
Council member Stacy voted against the amendment, saying she worried the additional tax would be a burden to small businesses in the building. The ordinance amendment otherwise passed and the council authorized the mayor to sign the development-agreement amendment and notify the state as required. The council took no additional action affecting other CIDs at this meeting.
Council minutes show the city will notify the Department of Revenue if the council had declined to approve the amendment; because the amendment passed, staff will proceed with the revised CID boundary and associated paperwork.
