About the Downtown Raleigh Municipal Service District

Did you receive a notice about the public hearing on April 16th and would like to know more? Read more below or send an email to request the recording of the most recent informational webinar from April 11th for more details.

How It Works

The Downtown Raleigh Municipal Service District (MSD) was created by the City of Raleigh to provide enhanced services for the Downtown Raleigh Area, such as additional cleaning and safety services, as well as economic development, activation, marketing and community engagement. The district is funded by an additional assessment on properties within the district.

At present, Downtown Raleigh Alliance is the service provider for four of the five services (economic development, marketing & events, safety, and community engagement), while the City of Raleigh provides enhanced cleaning services.

Exploring Boundary Expansion

The district’s boundaries have not been revised since they were established over 15 years ago, while Downtown Raleigh has continued to grow and evolve. As such, what is considered downtown, in terms of built environment and storefront businesses, has changed but the service district has not. So, there have been increasing challenges with providing services to rapidly growing areas on the periphery of the current MSD. For example, DRA Safety Ambassadors must keep their patrols within the MSD, according to state law, so they cannot provide safe walks or address safety issues in areas immediately bordering the present district. And more mixed use buildings with new storefronts have been built, but DRA staff cannot help recruit businesses to these nor provide as much marketing and financial support for new, small businesses as we can within the current MSD.

Given these challenges, DRA and the City of Raleigh are exploring expansion of the Downtown MSD to include some areas immediately adjacent to the current district. Criteria for considering an area for expansion included areas that are adjacent to the existing downtown boundary, contains current or under construction significant development consistent with downtown built environment, contains businesses and developments that have requested Downtown MSD services, and areas that already feel like a part of downtown.

Expansion Process and Community Engagement Opportunities

In early 2024, DRA hosted at least one community engagement meeting for each of the potential expansion areas, with three additional general information meetings to share information, gauge interest, and answer questions about the MSD services and the potential expansion. Meetings were a combination of hybrid, virtual, and in person.

Based on feedback received during the engagement process, DRA revised the boundaries of the expansion area to narrow the scope of the expansion. A formal proposal was then developed and submitted to the City of Raleigh for study.

On March 5, 2024, Raleigh City Council discussed the proposal and voted to hold a public hearing on April 16, 2024 to formally consider and vote on the MSD expansion proposal.

FAQ

What is a Municipal Service District?

A Municipal Service District (MSD) is a legally enacted special tax district (NC General Statutes 160A-Article 23) that allows a municipality to collect additional taxes within a defined geographic area for specific purposes, only to be used within that area.

These districts are often used in downtowns where you see higher level of need for additional services to address more litter on streets, safety issues, higher storefront activity, and need to generate activity through events and marketing. Many downtowns across North Carolina and the United States have these districts including Charlotte, Durham, Greensboro, Winston-Salem, Chapel Hill and others.

What services are funded by this district in downtown Raleigh?

Safe Environment: This service includes Safety Ambassador patrols on downtown streets to serve as eyes and ears to help the Raleigh Police Department. They are trained in de-escalation to handle challenging situations, provide safe walks for people throughout downtown and provide hospitality such as directions to places within downtown.
Economic Development: Includes storefront recruitment, policy advocacy, research, urban planning and transportation project management.
Targeted Marketing & Events: Storefront promotions and events to attract visitors to downtown such as Restaurant Week, First Friday, Live After 5, Jazz in the Square.
Conflict Resolution & Community Engagement: Includes general community meetings and then coordination meetings regarding specific topics or conflicts.

The City of Raleigh’s Department of Transportation uses MSD funds to provide:

Clean Environment: includes daily litter pickup and periodic power washing.

Why is this district potentially expanding?

The boundaries were last revised in 2008. Since then, downtown’s population has doubled and the areas considered downtown have changed. But the service district boundaries have not, which means these areas that are now a part of downtown do not receive the same services as those within downtown. And these areas have more and more issues that come with being dense, vibrant, mixed use districts or parts of downtown. Trash, safety, storefront support, more conflicts with competing uses or interests are all issues in these various expansion areas. So, Ambassadors are unable to provide safe walks to these areas and the City is unable to provide their enhanced cleaning services. Our Social Service Ambassadors are unable to help unhoused individuals in these areas. Our economic development team is not able to provide more services to the locally owned businesses who need support in these expansion areas. And we cannot hold events to bring people and fun experiences to expansion areas.

What benefits do I receive as a resident in a Municipal Service District?

Safety Ambassadors patrolling seven days a week to create a safer environment, provide safe walks as needed and de-escalate any concerning issues.
Social Service Ambassadors helping un-housed and those in mental health crisis on our streets find necessary services such as housing, shelter, job training, mental health support.
Enhanced cleaning service on sidewalks and streets including frequent litter pickup and periodic power washing.
More direct advocacy to the City and more coordination on issues such as parking, streetscape changes, placemaking and other policies that affect urban neighborhoods.
Small-scale activations in your area including small block parties, vendor markets, live music as desired by the community.
Recruitment of new businesses to make your part of downtown more walkable and livable such grocery, personal services, retail and food options.
Support for neighboring businesses that make your neighborhood fun and walkable to live in.
An accessible advocate to bring issues and problems to for resolution with City or neighboring properties.

What are the benefits if I own a business or commercial property in the MSD?

Inclusion in marketing promotions such as Restaurant Week, First Friday
Recruitment support to fill vacant storefronts
Advocacy for policy issues such as parking, transportation infrastructure, public realm maintenance and investment
Storefront Upfit Grant support for businesses
Enhanced cleaning service on sidewalks and streets including frequent litter pickup and periodic power washing
Safety Ambassadors patrolling seven days a week to create a safer environment, provide safe walks as needed and de-escalate any concerning issues.
Social Service Ambassadors helping un-housed and those in mental health crisis on our streets find necessary services such as housing, shelter, job training, mental health support.
Small-scale activations in your area including small block parties, vendor markets, live music as desired by the community.
An accessible advocate to bring issues and problems to for resolution with City or neighboring properties.
Research and data to support business decisions.

Is the Downtown Raleigh Alliance the same thing as the Downtown MSD?

No, the Downtown Raleigh Alliance is a non-profit that is one of the service providers for the MSD services, but is a separate entity and engages in additional activities beyond these services to support Downtown Raleigh.

Do MSDs have any oversight?

Yes, all service providers are required to submit extensive reports every 6 months to the City of Raleigh that detail all activities related to MSD services including the number of issues addressed by Ambassadors, businesses recruited to vacant storefronts, safe walks provided by Ambassadors and many other metrics. MSD service providers are also required by state law to provide a report to City Council annually, which takes place in November of each year. Additionally, Downtown Raleigh Alliance has a Board of Directors composed of a range of residents, property owners, small and large business owners, nonprofits and institutions, which oversee the work of DRA staff and provide additional oversight.

How are MSD services decided?

City Council periodically reviews MSD services and determines what they should be based off input from the community including surveys and public hearings.

How are MSDs funded?

MSDs are funded by property taxes on all qualifying properties within the boundaries of the district. A property owner receives an additional assessment on their standard property tax bill. MSDs do not receive any sales taxes nor require a business to levy or collect any additional tax. Property owners pay this additional assessment as part of their property tax bill annually.

How much does it cost?

The Downtown MSD is projected to have a tax rate of 6.8 cents per $100 assessed. The tax rate can change when property re-valuation takes place, as it did in early 2024. So, the rate will likely drop from its current 7.8 centers per $100 assessed to 6.8 cents per $100 assessed. Property owners can calculate their potential MSD assessment using that number. There is a possibility the final rate set in the upcoming City budget will be lower, but that is the current projected MSD rate from the City of Raleigh.

Can I ask not to be included in the expanded MSD?

Yes, you can submit a petition for exclusion to the City of Raleigh, which will be considered by City Council as they look at the final boundaries of this expansion if Council chooses to move forward.

What was the criteria for determining expansion areas?

Adjacent to existing downtown boundary: these are all areas immediately bordering the existing downtown boundary.
Contains or has under construction significant development consistent with downtown built environment: this includes large multi-family developments, office buildings or other commercial buildings that are built with the intention of being walkable and connected to downtown.
Already feel like a part of downtown: These are areas that based on the listed factors here, the existing and under development buildings, and proximity already feel like a part of downtown, but do not contribute to the district’s tax base nor receive all services
Contains businesses and developments that either indirectly receive or have requested Downtown MSD or DRA services including marketing promotions, website, social media, problem solving support or advocacy. Some of these areas also have requested Ambassador services, which are not allowed to cross MSD boundaries.

What outreach has taken place in these expansion areas regarding this expansion?

Staff has worked to engage property owners, residents, and businesses within each expansion area. We chose to do engagement on an expansion area-basis versus just only general meetings so that we could get more granular feedback to refine this feedback to Raleigh City Council. Among the outreach tactics:

Developed website with information on expansion and also hosted sign ups for the various community meetings held.
Included a feedback form on website for those who could not attend meetings but wanted to be able to either provide feedback or request a follow up meeting or recording of a meeting.
Invited property owners and tenants to meetings via direct mail according to Wake County property tax records.
Held 10 community meetings with at least one for each expansion area with 8 of those meetings held as hybrid meetings to allow for people to watch remotely.
Held 3 general meetings virtually, at varies times (evening, early morning and late morning), to provide overview of MSD expansion to stakeholders who missed any of the area-specific meetings.
Held 25+ additional follow-up meetings with stakeholders who were unable to make these meetings.
Reached out directly via email and phone to HOA boards, businesses, residents, and property owners to invite them to community meetings and share website info.
Held an additional direct mailing to properties in expansion area where we did not receive a very strong initial response for attendance to additional community meetings.

If City Council chooses to further explore expansion, there are opportunities in the state and City processes for public hearings and continued opportunities for public engagement. This portion outlined above was not part of any statutorily required process, but was initiated to better understand if there was interest in expansion and where, ahead of any additional consideration by Council. With all these efforts, we still anticipate property owners and stakeholders who will not have participated in any engagement wanting to do so through the process established for MSD expansion in state law or any other engagement that takes place in the future.

Were any changes made after the initial community outreach?

After these public engagement sessions, the proposed boundaries were adjusted to be responsive to feedback on where property owners did or did not want to be included. Among some of the changes based on community feedback:

Reducing the area included in this proposal from the Prince Hall District based on property owner and resident feedback.
Reducing area included in this proposal just east of current downtown boundary to reflect property owner and resident feedback.
Reducing area included in this proposal in western edge of downtown to exclude several properties that did not desire inclusion.
Reducing Person St expansion area to exclude several properties that did not desire inclusion.
Eliminated eastern side of Capital Boulevard after determined that area did not have sufficient need for services, as it is largely gas station, rail yard and self storage that have limited pedestrian access to the rest of downtown and is a challenging area to serve due to limited access nature of Capital Blvd and need to service via automobile, as well as the fixed nature of many of these land uses that are not a good fit for this service district.
Chose to defer on the Dix Park edge area, south of Western Boulevard, as the Dix Park funding needs and sources continue to be discussed and analyzed. This area could make sense for expansion of the Downtown MSD or be a part of a Dix Park MSD in the future.

What happens next?

Raleigh City Council will hold a public hearing on April 16^th. After that, they will review exclusion petitions and determine if they would like to continue to proceed with expansion and determine what the final boundaries will be.

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