The Downtown Improvement District
The Anchorage Downtown Improvement District (DID) covers 126 square blocks from 9th Avenue to 1st Avenue and from Gambell to L Street. Downtown property owners created the improvement district to help improve the cleanliness of downtown; to help decrease crime; to increase occupancy rates, investment values and lease income; and to generally stimulate economic development and improve the quality of life in downtown.
Simply put, property owners created the assessment district to transform downtown into a clean, safe and vibrant neighborhood.
Downtown property owners petitioned the Assembly to create the improvement district in 1997. The assessment funds collected by the city are put back into the improvement district for supplemental services as determined by the property owners and outlined in ordinance.
The Anchorage DID is the first in Alaska, though more than 1000 exist in the US and Canada alone. Others DIDs have served as models for creating the Anchorage downtown improvement district.
Within the improvement district, the Municipality collects an assessment of 1.5 mills of assessed value (or $1.50 per $1,000 assessed value) except on government property (city, state and federal), churches, non-profit religious, charitable or educational organizations exempt from property taxes and owner-occupied single-family residences.
The exemptions for federal, state and municipal properties reduce the total assessment by over 33%. Yet, they and their employees are receiving the same level of services. In essence, the exemptions afforded to government-owned property forces small businesses and private property owners to carry the burden of the assessment.
To address this inequity, both the federal government, the Municipality and the Alaska Railroad are contributing money to the DID in the form of a fee-in-lieu-of-assessment. This fee-in-lieu is a grant to the DID that approximately equals what the assessment amount would be if these government properties were taxed.
Currently, the state is the only government entity that is not paying into the assessment district.
Why create improvement districts?
Since DIDs provide services above and beyond what cities are required to provide – and often times beyond what city budgets allow government to provide – DIDs can succeed where city governments typically fail. Additionally, once set-up, DIDs are hard to replace because of their lasting value to a community. Scholarly research of existing DIDs have demonstrated the positive economic and social impacts of improvement districts within cities.