Proposed Route 3/I-255 Business District

In Illinois, municipalities establishing business districts may impose a business district sales tax (BDST) in quarter percent increments with a maximum rate of 1.00%.  Revenues collected through this sales tax are then reinvested solely in the business district for qualifying expenses.

The tax is NOT imposed on:

• Items that are titled or registered with an Illinois state agency
• Qualifying food, drugs, and medical appliances

Businesses that will NOT charge the BDST:

• Businesses participating in special events
• Dealerships selling vehicles, trailers, RVs, mobile homes, aircraft, or watercraft, etc.
• Service businesses that do not sell or transfer merchandise

Very little of the total area is in the 100-year or 500-year floodplain, although these areas are developable subject to certain design requirements. The primary areas targeted for new development are located not in any of these small areas.

A Business District does not obligate the City to make any advance commitment to build infrastructure. Any public improvements that may be required to support a private development project is subject to a development agreement with the developer.  A development/redevelopment agreement can only be enacted after formal approval by the City Council in an open meeting.  These agreements normally only commit Business District sales taxes projected to be generated by the project to the specific project. The City may commit certain other of its revenues that the project may generate under the provision of the law but that is not common. There is no wording contained in the proposed Plan to this effect.

Actually, there are two such developments referenced in the proposed Plan.  The first is the new St. Louis Steamers facility, located at the intersection of DD and Bluff Roads.  The second is the facility proposed to be constructed near/in the Columbia Quarry.  At least one new hotel, and one new restaurant to be located within the proposed Business District are in various stages of planning.  The development of additional hotel and restaurant venues within the proposed District would certainly be accelerated by the development/expansion of either facility.  It is important to note, neither area is encompassed by the proposed District boundary.

There are many examples across the Metro East.   From O’Fallon (virtually everything in the Central Park area along I-64), Shiloh (Dierberg’s/Target development), Collinsville (Collinsville Crossing), Edwardsville (Dierberg’s development). 

All of these involve development components with many retail sales tax generators, and all were stymied by extraordinary infrastructure costs, improvement & infrastructure demolition, and/or foundation costs associated with undermined site.

Specific to the City of Columbia, in addition to the benefit of incentivizing development along the Route 3/Interstate 255 corridor, implementation of a Business District is one mechanism the City can utilize to mitigate any impacts of increased traffic on Old State Route 3 resulting from the planned Interstate 255/Davis Street Ferry/Imbs Station Road interchange.  Revenues derived solely from the impacted area may be used to constructed required improvements.  This approach ensures any such expenses are not unduly borne solely by City taxpayers.

The exploration of implementing a business district within the City was first discussed at the September 5, 2023 Regular City Council Meeting.  At the September 18, 2023 Council Meeting, the City Council approved the Contract for Professional Services with PGAV Planners, LLC.  This agreement was intended to determine if properties within the City, identified as having the highest likelihood of developing in the next 3-5 years, met certain criteria established by Illinois State Statutes for inclusion in a business district.  This component of the agreement was approved, with a cost of $10,000.00.  If qualifying criteria for the identified area was satisfied, the agreement approved $8,500.00 for the drafting of a business district plan to address impediments to development.  The total amount approved for the study/plan was $18,500.00.

All costs incurred by the City through the research, development, and adoption of the proposed business district plan are eligible for reimbursement from Business District revenues. Additionally, any City-expenses resulting from reviews/guidance related to agreements under a business district may be recovered from district revenues.  The City will recover its actual costs related to the business district prior to releasing any funds to developers.

Absolutely.  In fact, if adopted, the Route 3/I-255 Business District would be the second Business District designated within the City of Columbia (the first was established on the Main Street Abbey development, located in the former location of Immaculate Conception Church).  

Virtually every City cited in the above examples have more than one business district. To reiterate the significance of an earlier response, a business district is not an “if you build it they will come” economic development tool.  Best practices dictate significant interest should be evident there are development projects in the pipeline.  As Illinois Statutes impose a definite lifespan on Business Districts (23 years), and, unlike a Tax Increment Financing (TIF) District, the term of a Business District cannot be extended, boundaries should be as compact as possible relative to the location of those projects.  As interest in the areas identified in this question expands, the City would certainly explore the applicability of a business district to facilitate development, as appropriate.

The proposed boundaries were crafted to reflect where there is reasonable assurance that new development either has been, or will be proposed and adjacent areas representing realistic expansion of such developments. The overall size of the area is a result of “connection” requirements in found in Illinois Statute regarding boundaries. This necessitated including a large area owned by the Illinois Department of Transportation (the Route 3/I-255 interchange, representing approximately 25% of the total district area)

If adopted, the proposed Business District does not change the zoning of any included properties.  In adherence to state law, amendments to the City's Comprehensive Plan and/or Title 17 of the Columbia Municipal Code (Zoning Code) may only be changed after a duly noticed public hearing is held by the City's Plan Commission. After hearing all persons for/against any proposed amendment, the Plan Commission then makes a recommendation to the City Council for consideration.  An amendment may only be made if the enabling ordinance is passed by the City Council and approved by the Mayor in a meeting held in compliance with the Open Meetings Act.

In summary, even if the Business District is adopted:

• Residential properties will remain residential
• Commercial properties will remain commercial
• Agricultural properties will remain agricultural

Residential properties comprise 7 acres, more or less, of the total proposed district area.  These 14 residences were included in the district due to the immediate proximity to Old State Route 3.  Incorporation in the business district is intended to ultimately provide greater value to these residents, as it creates a financial incentive for potential developers to acquire these properties.  Essentially, these property owners will be positioned to command a premium for their homes IF THEY CHOOSE TO SELL, as a developer will be able to recover a portion of the purchase (property assembly costs) from business district revenues.  

These properties are currently situated in a R-5 Single Family Residence Zoning District.  The Business District DOES NOT rezone ANY property included in the proposed boundary.  Zoning changes may only be done through a standalone process, requiring multiple open, public meetings.

It is important to note the Business District Plan does not impose any requirements on owners of any property proposed for inclusion; nor, does the City have ANY intention (or desire) to exercise its statutory authority to take property through eminent domain.  The reference to eminent domain was taken directly from Section 74.3-3 of Article 11 of the Illinois Municipal Code (65 ILCS 5/11-74.3-3).

Theoretically, said property owners will no longer be in a position to demand a premium for their property, as a developer will no longer have the opportunity to receive any sort of reimbursement for property assembly/development costs in that particular area.  This means costs of development (property acquisition, site preparation, construction/repair of public streets/utilities, renovation/demolition of existing buildings, financing, and even relocation costs- all eligible Business District Project Costs under the Business District Development and Redevelopment Act), will solely be the burden of the developer.  Therefore, the attractiveness of Bridgeview for any commercial development would presumably be drastically lower than adjacent property included in the proposed Business District.

Unless there is a zoning change from residential to commercial, requiring a separate, public process, the assessed valuation (and resulting property tax bill) should not be impacted merely through a property's inclusion in a business district.   

A majority of properties adjacent to Bridgeview Drive are zoned C-3 Commercial, and the Bridgeview Drive area is zoned R-5 Single-Family Residential.  As noted elsewhere, a business district does not change land use policies or zoning applicable to included properties.  Given where these parcels on Bridgeview Drive are located, their inherent value for commercial development is to be expected.  When the new Interstate 255 interchange opens, and resulting traffic on Old Route 3 increases, these properties are anticipated to become even more attractive for commercial redevelopment. 

Essentially, the overlay of the Business District does not necessarily increase values any more than the factors noted above (outside of the City's control) and other assessment tools utilized by Monroe/St. Clair Counties (comparable sales figures of comparable properties, etc).

Finally, it should be noted sale value only goes up if a developer is willing to tackle the assembly of properties and incur the costs of demolition wherein, said developer can utilize business district funds to cover those costs and the property owner is willing to sell.