Sioux Falls City Council to vote on downtown tax change in October

Sioux Falls City Council will weigh a change to the downtown business improvement district's tax exemptions for industrial and multi-family residential properties. 

The council officially passed a resolution of intent to remove the special assessment exemptions on Aug. 18. They will be considered at the council's meeting on Oct. 14.

Sioux Falls Mayor Christine Erickson proposed the resolution. At a Aug. 19 One Sioux Falls press conference she said the changes are meant to "level the playing field" between different types of properties in downtown Sioux Falls.  

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Erickson said the business improvement district funds a lot of services provided by the Downtown Sioux Falls organization and she wants to ensure that funding for those services is secure as the area grows and develops. Sioux Falls business development manager Dustin Powers said the changes are estimated to bring in an additional $20,000 in tax revenue to the business improvement district's $562,000 budget.

Currently, there are 21 buildings which would be affected by the change, 14 industrial properties and seven multi-family residential properties.

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Industrial properties are exempt from the downtown business improvement district's special assessments, an annual tax based on valuation of property and land improvements, while multi-family residential buildings pay a 50% reduced special assessment rate.

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Apartment buildings outside mixed-used zoning areas, residential buildings with two of fewer units and buildings otherwise exempt from taxation under South Dakota law, like churches, are also exempt from paying the special assessment.

Powers said the proposed changes will only affect apartments in the city's downtown mixed-use zoning district, leaving some apartments further away from the heart of downtown near unaffected. He said those apartments buildings in residential zoning districts do not receive or benefit from Downtown Sioux Falls services, so their exempt status was left out of the proposed cuts.

The downtown business improvement district stretches from Falls Park Drive at its northernmost boundary to 14thStreet. at its southernmost boundary. Minnesota Avenue marks its westernmost boundary and Franklin Avenue. marks its easternmost boundary.

This article originally appeared on Sioux Falls Argus Leader: Sioux Falls City Council to vote on downtown tax change in October