City plans to pause fee paid by downtown Olympia businesses for improvements. Here’s why
Olympia officials are considering doing away with the fee downtown business owners have to pay to help the city keep its core streets and businesses clean, safe and thriving — at least for the year 2025.
The resolution the City Council passed on Nov. 19 establishes the city’s intention to explore changing the Parking and Business Improvement Area (PBIA) tax assessment. It involves conducting extensive public outreach and a future public hearing.
The PBIA currently consists of three zones encompassing downtown Olympia from the west side bridges to the port, east past Plum Street and south to Union Avenue. Yearly tax assessments currently range from $150 to $750.
Economic Development director Mike Reid said the PBIA Advisory Board recommended 2025 be a program evaluation year, so ratepayers wouldn’t be charged next year.
He said the PBIA has a fund balance of $85,000. The PBIA will spend $30,000 on professional services to evaluate the program facilitate public conversation, and another $30,000 on beautification projects. Reid said the board plans to keep a remaining fund balance of $25,000.
Reid said the city first created the PBIA in 2005. There was a sunset clause in the original ordinance that said the council had to come back every 5 years to renew the program.
“They came back in 2010 and at that time, the council said you don’t need to come back anymore,” he said. “And so we just removed the sunset clause from the parking business improvement area program. From a best practice standpoint, most business improvement areas have some sort of a re-certification or a sunset or even a renewal built or baked into them. We don’t have that in our current ordinance.”
He said with the program turning 20 years old in 2025, it felt like a good time to talk about how the program could be funded differently. Reid said ratepayers will be asked to participate in the process of reimagining the PBIA.
Reid said the main question will be: Is the PBIA in its current form still the most effective tool to meet the needs of those downtown ratepayers?
Answering that question will involve the public learning more about the role of the PBIA advisory board and how it compares to other tax district boards, what the makeup of ratepayers is, and how rates are set.
“We haven’t changed the rates since 2005 so the rates have actually remained the same while inflation has continued to expand upon that point,” Reid said.
Reid said the program now has business owners paying the assessments, but the downtown improvement district was originally launched with the idea that it would be property owners, not business owners, paying fees. The consultant will involve both parties in conversations.
“The PBIA board did not want to charge rate payers while going through this, they thought that it actually may add a layer of complexity to some of the conversations,” Reid said. “Some people are going, ‘I don’t want to pay this current bill, so I’m going to dunk the whole program.’ So let’s just turn the volume down on that sort of pressure.”
He said the board also unanimously agreed not to pay for flower baskets next year. He said it’s a staple of what the board has done, but it’s a $7,000 expenditure. Plus the city hires someone to water and maintain them for six months. He said it can end up costing $40,000 to maintain flower baskets.
Reid said according to Olympia Municipal Code, the city sets the rates, and the council can change them. But it has to have a public hearing to do so.
The Nov. 19 meeting was notification of a potential rate change and the setting of a public hearing to discuss that. The public hearing will take place Dec. 10. After that, the council can change the rate to zero.
Reid said the downtown improvement district was originally launched with the idea that it would be property owners, not business owners, paying fees. Going into 2025, a consultant will be involving both parties in conversations.
Council member Lisa Parshley suggested the consultant involve the Olympia Downtown Alliance, a nonprofit focused on downtown revitalization and preservation, to help with communicating with businesses. She also suggested a partnership with the nonprofit’s downtown guides for flower basket watering.
Council member Robert Vanderpool said he is concerned about hearing back from property owners if the fee were to be transferred to them.
“I get concerned about, okay, a developer wants to build downtown, and while they’re building it, they’re being charged,” he said. “I know it’s not a lot, but it is a narrative consideration. And then the other part of it is vacant buildings; property owners that own a building or two and aren’t really around and weren’t aware that there was this change coming down. And so those are just two factors I think about in the back of my mind as we’re looking at this.”
Reid said city staff have put together an email distribution list of downtown rate payers. He said they’ll be sending out a notice of the upcoming public hearing, as well as spreading the word through advisory boards.
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