By Emily Ford
eford@salisburypost.com
SALISBURY — As Downtown Salisbury Inc. continues to redefine itself, the organization has asked Salisbury City Council to kick in an additional $35,000 next year.
DSI will focus solely on economic development and shed other responsibilities. The tourism authority will take over promotion and marketing of downtown events, including bringing on a DSI employee.
On Tuesday, DSI asked the city to resume management of the Plaza, a seven-story city building that rents retail and residential units.
“We had gotten so overloaded as an organization,” Mark Lewis, DSI vice president, told City Council.
The city has given DSI $98,500 annually since 2008. Lewis asked for a bump to $133,500 for the coming fiscal year, which begins July 1, to cover mortgage payments for the Empire Hotel, DSI’s most important economic development project.
DSI will have only one full-time employee next year, down from three. Executive Director Randy Hemann has proven development skills and helped boost the downtown tax base to $84.7 million last year, as well as recruiting the future Rowan-Salisbury Schools central office to South Main Street, Lewis said.
Hemann will turn his full attention to growing investment and jobs in the downtown and possibly beyond, Lewis said.
The city’s money is well spent on DSI, which in the past 30 years has generated $117 million in investment and more than 1,000 jobs, Lewis said.
“I would suggest to you, one of the better investments our city has made in any sort of organization for economic development,” he said.
The Rowan County Economic Development Commission also has asked the city for more money next year and offered to handle marketing and development of the area between the downtown and city limits, which City Council refers to as “the doughnut.”
Lewis said DSI is also considering a proposal to City Council where Hemann would expand his job responsibilities into the doughnut.
DSI took over management of the Plaza when the organization had three full-time employees. The city pays DSI about $30,000 a year to manage the property.
The city keeps the rent money from Plaza tenants, and DSI has increased Plaza income by $32,000 since 2008.
“We would like to give back Plaza management to the city, where it started,” Lewis said.
With fewer employees, DSI’s general operating fund actually will decrease from $292,000 to $178,000 next year.
But DSI needs more money from the city to meet its continuing challenge, the Empire Hotel, a vacant landmark in the 200 block of South Main Street the downtown group plans to sell to a developer.
Mortgage payments on the hotel are $77,000 annually. Since 2007, DSI has raised $286,000 from private donors to help defray the cost of the building, “but we can’t do that forever,” Hemann told the Post.
The city needs to pitch in more, he said.
The Robertson Family Foundation will award DSI a $47,500 challenge grant to pay for roof repairs if DSI can match the grant, Lewis said.
DSI proposes the city and downtown tax district each contributing half of the organization’s budget. DSI does not plan to ask for an increase to the downtown tax rate.
Ultimately, DSI wants to cover its property fund, which now includes only the Empire Hotel, with tax district revenue while covering general operating expenses with the city’s allocation.
But until someone buys the Empire Hotel, “the budget will be out of whack,” Hemann said.
DSI had a developer for the hotel, which fell through when the recession hit. The group is getting ready to put the property back on the market, Lewis said.
On Tuesday, City Council agreed to sell land behind First United Methodist Church for $1 that gives DSI direct access from West Fisher Street to the Empire Hotel parking lot.
Lewis acknowledged DSI is asking for a large budget increase to $133,500.
“I know that’s a pretty big jump in the middle of a recessionary time,” he said.
By comparison, he said, Goldsboro spends $317,290 on its downtown, Morganton $244,287 and Lincolnton $200,500.
With a 169 percent increase in Salisbury’s downtown tax base since 1989, “the numbers speak for themselves,” Lewis said. “The city’s investment has produced results.”
Contact reporter Emily Ford at 704-797-4264.