The Urban County Council voted unanimously Tuesday to pull the plug on a new downtown taxing district, saying it needed more time and support.
The Downtown Lexington Management District would have imposed a slight tax on downtown properties that would have generated an estimated $270,000 to be used on downtown beautification efforts and other services.
For a $300,000 property, the tax would have been $300.
To establish a downtown taxing district, 33 percent of the property owners representing 51 percent of the property value in that district have to sign a petition agreeing to the increase.
At 2:30 p.m., less than 30 minutes before Tuesday's council work session, backers of the district got the last landowner needed to sign the petition to reach the threshold for approval.
But the council had to approve an ordinance creating the new taxing district before Jan. 1 for the district to begin collecting taxes in 2014. That meant that the council would have to hold a public hearing before the council could give final approval, according to city lawyers. The earliest the council could hold that public hearing would be Dec. 17, but council will be on winter break from Dec. 10 through early January.
The time schedule was too compressed, many council members said.
"I think the concept is a positive one," said Councilman Steve Kay. "But this is an idea that needs more robust support then it is getting."
Some council members also expressed concerns because many of the property owners who signed the petition were government or nonprofit organizations that do not pay taxes.
Councilman Kevin Stinnett said he was uncomfortable with having less than 25 percent of the actual taxpayers in downtown supporting the new district.
Renee Jackson, the executive director of the Downtown Lexington Corporation, which has spearheaded efforts to create the new district, said it is not uncommon for there to be limited support in the beginning of a new management district. But once the districts are started, they typically gain more support from landowners, she said.
Louisville and more than 1,200 cities across the country have downtown management taxing districts. The districts can help fund additional trash pick up, wayfinder signs and other improvements. A 15-member board would oversee the district's money but an economic development plan would have to be submitted to the council annually for its approval.
The Downtown Lexington Corporation started gathering signatures for the petition in September.
Councilman Ed Lane said he couldn't support the new district because he said he didn't like the idea of another tax. Lane said he has an office downtown. The tax his building would pay would be passed on to the tenants.
"You are raising taxes on every business in the downtown area," Lane said. "We need to promote a more vibrant economic environment, not raise taxes."
The council voted unanimously to remove the ordinance from its docket on Tuesday.
Joe Terry, president-elect of the Downtown Lexington Corporation, told the council that they would likely be back in 2014.
Jackson said that downtown business leaders have discussed creating a district for more than a dozen years. There were public meetings two years ago, but this is the first year that a petition drive was attempted.
Beth Musgrave: (859) 231-3205. Twitter: @HLCityhall.