City Hall agrees to special tax for new Medical District

A property tax levy of $3.75 per $1,000 is intended for the area

An illustration of the Cedar Rapids Medical District plans
An illustration of the Cedar Rapids Medical District plans

CEDAR RAPIDS — The City Council on Tuesday agreed to make the city’s new Medical District a special taxing district similar to the special taxing district of long standing in downtown Cedar Rapids.

The taxing districts allow property owners in the districts to assess an additional tax against themselves for use in the district.

The general boundary of the Medical District includes an area of property generally from Interstate 380 to Ninth Avenue SE, including and between St. Luke’s Hospital and Mercy Medical Center, and from 12th Street SE to Sixth Street SE with some additional blocks of property also included.

City officials on Tuesday reported that 57 percent of the property owners in the district approved of the creation of the Cedar Rapids Medical Self-Supported Municipal Improvement District, which is a group of owners that represent 89 percent of the property value in the district. State law requires that 25 percent of owners and the owners of 25 percent of the property value agree to the taxing district before it can be created.

Residential property owners and entities exempt from property tax do not pay the special additional tax, which can be up to $3.75 per $1,000 of property value.

However, both hospitals, though property-tax exempt, have agreed to pay the special assessment, Christine Butterfield, the city’s community development director, reported to the council on Tuesday.

The revenue from the tax will be used to maintain capital improvements in the Medical District, attract and retain jobs, enhance the district’s reputation and provide security.

City Council member Kris Gulick noted that the City Council has supported the creation of the Medical District since 2006.

Butterfield reported that the latest boundaries of the district have changed a little to allow Stamats Communications, 615 Sixth St. SE, and Benz Beverage Depot, 501 Seventh Ave. SE, to become part of the downtown SSMID rather than the Medical SSMID.

Robin Tucker, vice president of Tucker Manufacturing, 613 Second Ave. SE, asked the City Council on Tuesday, as he has previously, to move his property into the downtown SSMID and out of the new Medical SSMID. So far, he’s not been successful.

Currently, the downtown SSMID assesses property at $2.75 per $1,000 valuation, and Ted Townsend, president/CEO of St. Luke’s Hospital, noted on Tuesday that the Medical SSMID intends to levy a tax of $3.75 per $1,000, at least initially when it begins to collect the additional tax on July 1, 2012.

The Medical SSMID will have a 12-member board, approved by the City Council, to oversee the SSMID and set the annual taxing rate.

City Council member Chuck Wieneke encouraged the Medical SSMID to include a couple of district property owners on its board who did not support the creation of the SSMID.

City Council member Don Karr noted that 43 percent of property owners did not sign off on the creation of the Medical SSMID, and for that reason he was the lone council member to vote against the plan.

The council must vote a second and third time on the taxing district before it can take effect

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