A new way to invest in downtown

Published 7:00 am Wednesday, January 17, 2007

A donation to ‘Main Street’ brings a state tax credit.

In 2006, it meant more music, livelier celebration and the continued hanging of banners.

Though the specific benefits in 2007 from the Main Street Tax Credit program remain to be seen, Bainbridge Downtown Association Director Cris Beattie said there is nothing uncertain about its value to business in Winslow.

“It’s just such a wonderful program,” Beattie said. “Instead of your tax money going to build some sidewalk who knows where, it stays right here in our own community.”

Through the program, eligible businesses can make a tax-deductible donation to the downtown association in exchange for a 75 percent business and occupation tax credit on that amount at any time during the following year.

Launched last year, the program’s goal is to infuse downtowns with local money that would otherwise end up elsewhere.

Last year, four donors contributed $20,000 to the Bainbridge Downtown’s general fund, to boost business in Winslow. Last year’s money enabled the BIDA to “beef up” the July 3 celebration and pay for its insurance coverage on the banners and holiday lights that hang above Winslow Way.

Architect Will Langemack was among those who took advantage of the program. In addition to being a good business move, Langemack said he participated for the sake of downtown.

“For me, keeping local business dollars local is the great thing about this tax credit,” he said. “It’s a contribution, a deduction and a tax credit all rolled into one, and that makes pretty good business sense.”

Judging by participation in other Washington state cities, many other businesspeople agree. So far more than $130,000 in tax credits have been claimed statewide.

In all, the state Department of Revenue sets aside $1.5 million for 17 downtown associations across the state; Bainbridge is eligible to receive $100,000 of that money. Last year only 10 cities were eligible.

Beattie said some cities have seen single donors account for the entire share of its available funding. Banks, in particular, seem to have caught on.

“These cities are racing because it’s a win-win situation,” she said. “A lot of people give in December and use the credit in January.”

As an example, a business that donates $10,000 to the association can receive a credit of $7,500 on its 2008 B&O tax liability.

BIDA this year hopes to receive the $100,000 maximum, to help cover administrative costs and a downtown streetscape gardener, as well as programs and events. Other goals for 2007 include historical preservation, developing an interactive kiosk and promoting a more pedestrian-friendly downtown.

“As much as people don’t like the B&O tax, we like what this does for our community,” Beattie said.

Bainbridge businesses pay a tenth of a percent B&O tax, though the first $250,000 is exempt. The tax brings in just over $300,000 each year, said city Finance Director Elray Konkel.

To be eligible for the Main Street Tax Credit Program, donors must first register online with the state Department of Revenue at http://dor.wa.gov.

Langemack said it won’t take long for businesses on Bainbridge to realize the benefits of the program.

“I think people are starting to pay attention to it,” he said. “There’s only $1.5 million out there, and I was making sure I applied for it early.”