Downtown St. Paul property owners OK expansion of privately funded safety services

St. Paul’s privately funded downtown improvement district will stretch into Lowertown next year, a move that will roughly double funding for special cleaning and safety services throughout the urban core.

Though the City Council voted in July to expand St. Paul’s existing downtown improvement district, property owners could have refused the assessment-funded services if enough of them opposed the plan. City officials tallied objections this week and said the proposal cleared its last hurdle.

“I think we’re going to be able to provide a level of improvement that downtown really needs right now,” Joe Spencer, president of the nonprofit St. Paul Downtown Alliance, said in an interview Tuesday. “I think people are going to love it when they see what can happen when we add this extra layer of safety, resources and extra amount of coordination.”

The Downtown Alliance oversees the existing improvement district, which is funded by commercial property owners, with fees based on buildings’ square footage and street frontage. Its boundaries were drawn to exclude buildings owned by downtown’s largest property owner, Madison Equities, which refused to back the concept in 2021.

A change in state law last year allowed the district to start assessing residential property owners, meaning Madison Equities’ objections no longer carried as much weight.

According to an analysis completed by the Downtown Alliance, over the last three years, the district has seen a 40% drop in what St. Paul police call “quality of life” crimes and calls for service — for issues like graffiti, vandalism, disorderly conduct and panhandling. Over the same period, Lowertown saw the same types of calls increase by 25%.

“I feel like we have done a really good job these last few years of testing a model and proving that it works,” Spencer said.

The new district, which will start next year with a $2.7 million budget, will allow the Downtown Alliance to hire more street cleaners and safety ambassadors. Spencer said the group is looking into new uniforms to distinguish between the safety and cleaning teams, and bikes to help staff more quickly traverse downtown. He’s also exploring whether it might be possible to help fund a city attorney dedicated to prosecuting downtown livability issues.

Perhaps most importantly, he said, the district will start broadly advertising ways for residents, workers and visitors to report problems directly to the Downtown Alliance’s safety communications center. Officials have refrained from doing so sooner because their reach is limited to district’s boundaries, which are not evident to the average passerby.

The expansion received support from a mix of small and large property owners, including Carl Kaeding, whose development group is behind downtown’s Courtyard by Marriott and the Arlow on Kellogg apartments. The company is also in the process of converting the former Ecolab University Center offices into housing.

“This is something,” Kaeding said. “I don’t know if it’s the be-all and end-all. But we’re excited to see if it works well, if it does something.”

Property owners responsible for about 20% of service charges objected to the district, Spencer said. That includes Madison Equities, which sent a letter in July urging the council not to increase costs for building owners already struggling with post-pandemic office vacancies and crime increases.

An attorney representing the owners of Town Square also sent an objection letter questioning the legality of the expansion. The building would owe up to $78,364 in assessments, the letter said.

In response, Spencer said he thinks there’s a well-established precedent for improvement districts in the state. Minneapolis’ Downtown Improvement District has operated similarly for years.