NEWS INFORMATION FROM

THE OFFICE OF MAYOR STEPHEN R. REED
City of Harrisburg
King City Government Center
Harrisburg, PA 17101-1678
Telephone: 255.3040

FOR IMMEDIATE USE
10 March 2003

SECOND DOWNTOWN IMPROVEMENT DISTRICT TERMINATED, VOLUNTARY IMPROVEMENT ASSOCIATION IN SMALLER DISTRICT FORMED

Harrisburg, PA — Mayor Stephen R. Reed today announced that the second Downtown Improvement District (DID II) is being terminated and that, in its place, an informal voluntary improvement group is being formed in a smaller portio of what was once the DID II area. All monies collected from DID II property owners last year will be returned to them with whatever interest had been earned from their investment.

The smaller improvement area will be from Walnut to the north side of Pine Street, from Front to Third Streets, where property owners and businesses will be invited to make voluntary contributions to DID I to cover the costs of business day sidewalk cleaning, litter pick-up, marketing, hanging baskets in warmer months, security patrols and promotional special events.

The first Downtown Improvement District (DID I), which has been in operation for 3½ years, is unaffected by the changes and remains fully intact and operating in the downtown area south of Walnut Street.

In the revised new voluntary improvement area, the former DID II board of directors, chaired by Rory Ritrievi, senior vice president of Commerce Bank, will be the advisory committee to make recommendations to DID I for the six square block area.

Reed said continued dissension and opposition to DID II made its ability to function untenable. The Mayor said the city did an independent review of DID II and the legal questions raised by opponents. The conclusions were:

1. DID II was legally formed under the provisions of state law, which required that two-thirds of the total number of properties representing at least two-thirds of the assessed value of all real estate approve the district’s creation; slightly more than two-thirds did approve;
2. The DID II board was legally and validly in place, as state law provisions did not require that all members also be city residents; state law only requires that board members represent different classes of property owners (each class based on value of real estate, assuring that small, medium and large property owners get representation to prevent one class from dominating the board);
3. State law stipulates that every separate property has a vote on determining if a district should be created; this allowed condominiumized parking spaces, which are separate properties, to each be counted as one vote; Reed said that while that is legal under state law, it undermines the credibility of the voting process and that state law should be amended to exclude individual parking spaces from having a vote;
4. Some had suggested that in lieu of forming a district where property owners would have a mandatory surcharge to be paid annually, that an entertainment tax be established by the city on restaurants and night clubs; state law does not permit such a tax;

Reed said the officers of both DID I and DID II met in the Mayor’s Office and are in complete accord with the changes being announced.

The DID I will continue utilizing the services of Donald Walker, Jr. as Acting Executive Director and will not fill the post until 2004.

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