Downtown Enhancement and Improvement Districts--What Are They All About?

With "downtown aesthetics" garnering a lot of attention on our recent 2024 Legislative Priorities survey and Indianapolis' recent proposal for an Economic Enhancement District, we thought it might be helpful to break down some of the core ideas of these enhancement and improvement districts.

Similar districts to the one proposed in Indianapolis have been implemented in a number of metropolitan areas like Denver, San Diego, and Columbus, Ohio. While the finer details may vary, these districts are often funded through specialized tax or other assessed revenue streams paid by property owners in the district. In Indianapolis' plan, as highlighted by the IndyStar, homeowners pay a fixed fee of $250/year while the fee for all other property owners is just under 17% of the property's gross assessed value. Indy hopes to collect an annual $5.5 million to put towards public safety, homelessness outreach, cleaning services/maintenance, a low barrier housing shelter, and more. These districts, and their funds, are usually managed by a board represented by various property owners within the district.

These districts are not without their share of controversy, however, and considerations should be made when deciding whether or not to implement them. Some critics argue that local government entities should be the ones responsible for maintenance of public areas and that they should foot the bill, not downtown property owners. Critiques also revolve around perceptions of special treatment for downtown property owners who receive these services while other property owners may not. Finally, some concerns exist about the potential for inequitable representation on district boards and who will have a voice (and a place) in these districts.

Indianpolis' new Economic Enhancement District will be an interesting case study for how the process works in Central Indiana and may offer some templates for Bloomington should they also want to consider a specialized downtown district in the future.

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