DID board accuses city of unauthorized transfer of $400,000 for capital project

In August 2021, Sarasota’s Downtown Improvement District Board of Directors approved $400,000 in capital expenditures toward a future Main Street “complete street” project — when and if that should occur.

What DID board members didn’t expect was to find $8,000 in their bank account, the $400,000 having been moved into a fund to pay for the project, which, at this time, has no other city, state or federal money — the latter two which are being pursued — in the project funding pipeline.

During the City Commission meeting Aug. 15, DID Chair Eileen Hampshire said the appropriation was inappropriate, and her board wants that money returned to its account.

After dissolving into a debate between Hampshire and commissioners about the losing street side parking in favor of aesthetics and a parking structure — and even further into whether the Bay Runner trolley the DID helps fund is actually beneficial to the business owners who pay into the special tax district — City Manager Marlon Brown explained that it comes down to optics.

The $400,000, Brown said, remains available to the DID for its maintenance and budgeted projects, including planning for an arts festival. In the meantime, while the city is attempting to secure state grants for the Main Street project, it must show it has “skin” in the game — in this case in the form of the DID’s capital commitment.

A request for state funding for Main Street improvements was rejected during the most recent legislative session, and any possible future success, Brown said, will require a demonstration of significant municipal buy-in.

“I would caution the commission to not touch that money because what legislators like to see is government having skin in the game,” Brown said. “By removing that money, it shows that it no longer becomes a priority of this commission and the city. … When we make that request again in the upcoming year, it shows the state that money is still available to be used.”

Whether that amount of skin is necessary at this time, observed Mayor Erik Arroyo, is subject to debate, as is whether a hold on however much that will be must be pulled from the DID at this time.

“Ultimately, this is about the fact that we have a hold on the money that we're not really using because we're applying for state grants, and we don't know when this project is going to happen,” Arroyo said. “We don't know when the state is going to match it. How much buy-in does the state need to see from us? … There is no number, they just need to see some buy-in and we can place that hold in many other places.”

Concluding the matter won't be resolved in a single meeting, by a 4-1 vote, with Commissioner Hagen Brody dissenting, the commission approved a future session with the DID board to hash out the dispute.

DID downtown benefit?

Before reaching that collegial conclusion, Hampshire and Brody debated whether what’s good for the whole of downtown is directly beneficial to the DID, which in addition to funding aesthetic enhancements and special events contributes $50,000 annually to the Bay Runner trolley that circulates between downtown and South Lido Beach.

Hampshire conceded the Bay Runner is far more successful than she believed it would be, but whether the DID truly benefits is questionable, which is why the board resisted the city’s request for its financial support of the three-year pilot project.

"On Aug. 31 2021, City Manager Marlon Brown attended our meeting to ask the DID board for $150,000 in funds toward the operation of the Bay Runner,” she said. “He emphasized it was an ask, not a demand, and anything would be appreciated. He received lukewarm support. The city subsequently confiscated $150,000 of DID funds for the trolley.”

In September, the City Commission voted to return the $150,000 to the DID, which in turn approved a contribution of $50,000 to the trolley “as a show of good faith,” Hampshire said. Still the precedent was set, Hampshire charged, for the city to reallocate DID funds “at will.”

Brody charged the DID sits on the sidelines of projects that benefit its membership rather than supporting them financially.

"I feel that sometimes the DID isn't contributing to some of these big-ticket items in hopes that the city is just going to pick up the slack and get it done without the DID’s involvement,” Brody said. “That's frustrating because I know that the DID is going to benefit from it, just like the trolley. So it's nice to hear you’re in agreement that the trolley has benefited the district.”

Hampshire clarified her remark about the Bay Runner.

“I didn't say that,” she said. “I said I thought the trolley was a good idea. I think it's been good for Sarasota. I'm not entirely sure that it benefits the district.”

"We can reroute it around the district and see if anybody objects to that,” Brody responded. “I can tell you we've had 70,000 riders on the trolley since its inception in February. It's been an unprecedented success. And just the reluctance to acknowledge that is frustrating.”

Brody applied similar sentiment to the planned Main Street improvement project, saying what’s good for downtown bolsters the city as a whole, and by extension the DID. Hampshire argued downtown improvements don’t necessarily benefit businesses within the district. Removing street parking near businesses in favor of aesthetics and moving those spaces into a parking deck, she cited as an example, discourages customers.

Brody bristled at that notion, saying gone are the days when customers expect to park in front of businesses they visit.

"We can argue all day that you should be able to walk two blocks to a store, but the fact is people don’t, so I can't change the perception that people have,” Hampshire said.  “I can't tell you how many times people told me, ‘I was going to come in but there was no parking, so I went to the other store down the street.' … We can't tell people what to think, and they do think if they can't park at the door they'll go somewhere else."

With no consensus on the matter that started the meandering discussion in sight, Commissioner Jen Ahearn-Koch brokered the agreement in the form of a motion to hold a special meeting between the City Commission and the DID board, characterizing the dispute over the funds as a communications gap.

“The conflict really is that that was our bank account,” Hampshire said. “And if this (Main Street project) goes through, we will have $8,000, so there won't be a DID. There's not any use in five people meeting 12 times a year.”