The tax self-imposed by business, property owners fuels public art, events, other enhancements
Marissa Payne
There’s one city acronym that often mystifies people, even those who are part of it.
What’s a Self-Supported Municipal Improvement District, or SSMID? Many aren’t quite sure what it is, what it does or how they’re governed — or even how to pronounce the acronym. (Depending on who you ask, it’s either SSMID or SHMID.)
One person wrote to Curious Iowa — a Gazette series that answers readers’ questions — asking how SSMID plans and projects are approved and who provides financial oversight for the entities. We talked to the people closest to some of Eastern Iowa’s SSMIDs to find out.
What is a SSMID?
A SSMID is a district where taxpayers have authorized the city to levy an additional tax on property owners to raise revenue for specific purposes within the district’s boundaries. That often includes beautification projects, streetscaping, events and programming within the district.
Iowa calls them SSMIDs, but in other states they may be known as Business Improvement Districts or Downtown Development Authorities. There are approximately 30 in the state.
Some communities with SSMIDs may only have one, while others such as Cedar Rapids have multiple. Cedar Rapids’ SSMIDs are Downtown, MedQuarter and New Bohemia-Czech Village. In Iowa City, the Iowa City Downtown District and South of 6 District are SSMIDs. Uptown Marion property owners also are in talks with city officials about creating a SSMID there.
Under Iowa code, only commercial, industrial or historic district properties are eligible to form a SSMID. The district must consist of contiguous property within the city’s boundaries.
To form a SSMID, a city council must file a petition with the city clerk with signatures of at least 25 percent of the property owners within the proposed district. Those signatures also must represent at least 25 percent of the district’s assessed property value. If 40 percent or more of the district property owners representing at least 40 percent of the assessed property value file a petition to oppose the creation of the SSMID, the council must withdraw it from consideration.
Daniel Stalder, with the Iowa League of Cities, said SSMIDs can be used by local governments at the request of businesses to accomplish specific goals. These goals are outlined in city ordinances and resolutions when a SSMID is created.
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“Every SSMID that I'm aware of has an external board or commission that is composed of community leaders, property or business owners in the SSMID district, and occasionally even city leaders,” Stalder said. “This board, or commission, approves the actions of the SSMID staff (if they have any) and generally provides oversight of the tax dollars."
Cedar Rapids Community Development Director Jennifer Pratt, who serves as Cedar Rapids’ staff liaison to the city’s three SSMIDs, said they are a way to encourage involvement at a grassroots level — like neighborhood associations for businesses.
“Revitalizing neighborhoods and then spurring that business growth and reinvestment is huge,” Pratt said. “Why do we do all of the streetscape? It's great for making an interesting, pedestrian-friendly environment … but it's also encouraging other people to invest.”
How are SSMIDs governed?
Members of a SSMID’s governing panel are mostly made up of property owners or their representatives. They may have ex officio non-voting members from the city or other organizations, such as the University of Iowa for the Iowa City SSMIDs.
In Cedar Rapids, all SSMID commission members are appointed by the mayor with the council’s consent. The three SSMIDs contract for staff. MedQ and Downtown SSMIDs contract with the Cedar Rapids Metro Economic Alliance. The MedQuarter also is a 501(c)(6) nonprofit.
“Because they are in their district, they have a great insight on what's needed to bring about those enhancements,” Pratt said.
Monica Vernon, who serves as administrator of the NewBo-Czech Village SSMID, said she may offer ideas as an administrator, but the commission meets monthly and decides which projects to pursue.
The commission looks to underscore or enhance the charm of the district, Vernon said, which already offers gorgeous buildings, proximity to the Cedar River and the 16th Avenue Bridge as an attractive connector.
“We want to enhance it all and continue to make it a place where people want to bike to, walk to, park their car and get out and explore,” Vernon said.
In Iowa City, both SSMIDs operate as 501(c)(6) nonprofits like the MedQ. But Iowa City’s SSMIDs are both governed by independent boards of directors. Nominees are approved by a majority board vote.
Angie Jordan, executive director of South of 6, said it is unique because it “was spearheaded by the South District Neighborhood's work to revitalize the area through economic development alongside community development”
“Our SSMID brings together a lot of decision-makers to co-create change focused around a shared goal and a timeline along with an initial budget to make improvements that directly benefit everyone investing into it,” Jordan said.
Betsy Potter, executive director of the Iowa City Downtown District, said the organization works primarily to welcome people to the city, shape infrastructure and sense of place and trying to draw more people to the area.
“Without organizations like ours, business owners and property owners are kind of on their own,” Potter said. “ … We’re working on their behalf every day and they don’t have to think about it as much.”
What projects do SSMIDs pursue?
SSMIDs typically do some strategic planning that guide the projects they pursue and services they offer within the district, and they’re driven by the SSMID’s governing panel. It can include streetscaping, as the MedQ has done on 10th Street SE, holiday lights, events and programming or public art — anything that contributes to the district’s vibrancy.
The SSMID’s governing panel fuels the work, but Pratt said there’s ongoing coordination with the city. She said with the Downtown SSMID, its staff help provide maintenance on trails and in Greene Square so the city doesn’t have to deploy its staff. Work on SSMID action plans, such as in Czech Village and NewBo, can also guide other city efforts such as its current endeavor to refresh a vision to revitalize the greenway along the west side of the river.
Cedar Rapids’ Downtown SSMID takes in about $765,000 a year. Among the priorities the commission recently provided with staff to start off 2024 were purchasing 12 new self-watering planters, organizing an annual meeting to bring together downtown stakeholders, exploring how to offer more live music and how to create a trolley.
Tim Kindl — a co-owner of the Fun Not Fancy restaurant group that includes Cliff’s, Brick’s and Taco Gato, among other restaurants in the metro — said the SSMID commission feels open to good ideas that benefit downtown.
“People don’t realize that it’s not a government agency, it’s not ran by the city,” Kindl said. “It’s property owners, and they elected to do this. They’re doing it for the good of the city, of downtown. It’s a tax that they imposed on themselves.”
As the Downtown SSMID has looked to spur activity, Kindl said his group worked out an arrangement where the SSMID financially supports BLOCKtoberfest. The event shuts streets down for a night around Second Avenue and Third Street SE where Cliff’s is located to host a concert.
While last year’s event drew fewer people because of tornado warnings, Kindl said the first year in 2022 attracted about 3,500 people. It raised $15,000 for local charities, according to a 2022 SSMID report.
“The idea is to get people downtown and offer something different and something fun, and it just works,” Kindl said. “ … It’s people downtown and that’s what we need.”
Iowa City’s Downtown District includes a large marketing budget to drive messaging promoting downtown, such as its district gift card program, retail retention and recruitment and grant programs for businesses and properties within the district, Potter said.
In Czech Village, Vernon said the SSMID tries to leverage its own funding with private dollars to maximize impact, such as with the “Mucha Meets Iowa” mural by Ali Hval, which overlooks Novak Plaza. That space at the entrance of Czech Village is being transformed with art and other amenities such as benches using SSMID funding and support from Mary Kay McGrath, who wanted to dedicate the space to her parents who were from the west side.
“It’s much more about what investment will drive more investment in our district?” Vernon said. “What can we do that will drive that attendance and thrive and attract people and keep them? What can we do to make a difference?”
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