‘Gentrification is real’: Raleigh considers special tax for area near Dix Park
People who own property near Dorothea Dix Park could pay a special tax to help pay for the development of the city park.
This is the first time Raleigh city leaders have discussed a special tax area, also called a municipal service district, in and near the 308-acre park near downtown.
The conversation is just beginning, but they’re considering a tax of 10 cents per $100 of valuation, or $400 a year for property with a tax value of $400,000.
The district tax, like those the city levies downtown and on Hillsborough Street, would be paid on top of existing city and county property taxes.
The park is currently funded by public money, donations and some rental uses, said Kate Pearce, senior planner for Dix Park.
“In order to start to move towards sustainability, we need to consider other types of funding agreements and funding tools,” Pearce said. “And one of these is a municipal service district.”
“The idea of the municipal service district is that the city and partners are investing a lot in both the park and the transportation infrastructure, and that the properties closest to the park will benefit from this increased level of service and amenity,” she said.
Potential boundaries
Three scenarios were presented Tuesday, but city staff members are recommending scenario 1 or 2.
Scenario 1: The 400 acres of Dix Park and parts of the Lake Wheeler Road Corridor. That would include 4,600 future residential units, 550 hotel rooms and 1.7 million square feet of commercial space. This would generate $1.8 million in MSD tax and a total of $20 million in city, county and MSD taxes. It currently generates $700,000 in property taxes.
Scenario 2: The 610 acres of Dix Park, parts of Lake Wheeler Road corridor and state-owned property along Centennial Parkway. That would include 9,000 future residential units, 965 hotel rooms, 3 million square feet of commercial space. This would generate $3.3 million in MSD tax and nearly $57 million in city, county and MSD taxes. It currently generates $700,000 in property taxes.
Scenario 3: (Not recommended) The 1,300 acres of Dix Park, the entire Lake Wheeler Road corridor, including parts of the Fuller Heights and Caraleigh neighbors, state-owned property along Centennial Parkway, Downtown South and parts of Boylan Heights along Western Boulevard. This would include 13,500 of residential units, 1,700 hotel rooms and 6.3 million square feet of commercial space. This would generate $5.7 million in MSD taxs and $63.3 million in city, county and MSD taxes.
“The intention of scenario 3 was to illustrate that the further away you get from the park, the less service is provided,” Pearce said. “And the less likely an MSD is feasible. So it’s almost to illustrate what not to do.”
Gentrification concerns
Some neighborhoods near Dix Park, in particular Fuller Heights and Caraleigh, are some of the last parts of the city left with naturally occurring affordable housing.
“I really want to put an exclamation mark on being really sensitive to the single-family homes in the MSD area,” said Council member Megan Patton. “We have studied that area. We know it’s a soft target for gentrification, and I don’t want us to do anything that will amplify that.”
City leaders would need to see if single-family homes could be excluded from the potential special district.
“I just want to emphasize the need for significant community engagement on that,” Council member Jane Harrison said. “I appreciate the idea of avoiding single family homes. I also want to make sure that we are truly considering low-income residents that could be impacted, as well as our partners around (Dix Park) like NC State (and) state partners.”
Pearce acknowledged the concerns.
“Gentrification is real,” she said. “And public investment potentially can result in property values rising and people moving in, because you’re investing in those areas. And so I think one of our responsibilities as a city is to look at what are some of those anti-displacement measures, in addition to building a park that welcomes the whole community.”
The City Council will discuss this again Nov. 21, when members will get a possible timeline of when the special tax district could be implemented.
This story was originally published October 17, 2023 at 1:25 PM.
