TO: Mayor Colvin and Members of City Council
THRU: Jeffrey Yates, ICMA-CM, Assistant City Manager
FROM: Chris Cauley, MPA, Economic and Community Development Director
DATE: October 12, 2026
RE:Title
Set Public Hearing on Parkview Owners Associations’ Requests for Removal from the Downtown Municipal Service DistrictTitle
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COUNCIL DISTRICT(S):
Council District(s)
District 2
b
Relationship To Strategic Plan:
This item supports the adopted Strategic Plan goals addressing economic vitality, quality of life and sound financial management. The hearing provides public input on district boundaries, enhanced downtown services and resources supporting downtown revitalization.
Executive Summary:
The City Council Policy Review Committee recommends scheduling a public hearing on October 26, 2026, regarding requests from the Parkview of Fayetteville Townhome Association and the Parkview of Fayetteville Condominium Association to remove the tracts or parcels identified in their petitions from the Downtown Municipal Service District (MSD). On September 23, 2026, the Committee voted unanimously, 4-0, to place the scheduling request on the October 12 Consent Agenda. Scheduling the hearing does not approve removal or change the district boundary or tax levy.
Background:
A municipal service district is a defined area where the City levies an additional property tax to fund authorized services or projects delivered at a higher level than elsewhere in the City. It is a City financing mechanism, not a separate government. Downtown revitalization is an authorized purpose. District tax proceeds are restricted to authorized district purposes; unspent proceeds may be reserved for future district expenditures but cannot be diverted to general City purposes.
The Downtown MSD was established in 1978 and expanded in 1983. Council most recently continued the district in June 2023 through Resolution R2023-024. Its additional property tax supports enhanced downtown services, including economic development, arts and design, marketing, events, and organizational support. The FY2026-27 MSD tax rate was $0.1489 per $100 of assessed valuation.
At the September 2, 2025, work session, Council directed staff to review Parkview’s inclusion in the MSD. The January 5, 2026, work session discussion addressed district history, legal requirements, and financial implications. Parkview was completed in 2013 on the former Days Inn site at 301 Bragg Boulevard through a public-private redevelopment agreement with H & H Holdings. It includes 49 townhomes and condominiums valued collectively at approximately $19 million. The development lies within the MSD boundary.
At the January 5, 2026, Work Session, City Council directed staff to hold a public hearing on February 9, 2026, regarding the reduction of the Downtown Municipal Service District (MSD) Boundary. The public hearing was prompted by a request from one owner to have its unit removed from the MSD. However, given the nature of the property, the entire parcel must be considered rather than individual units.
The Boards of Directors of the Parkview of Fayetteville Townhome Association and the Parkview of Fayetteville Condominium Association submitted requests on behalf of their respective owners’ associations to have the parcels removed from the MSD. These requests triggered the statutory public hearing.
At the September 23 Committee meeting, the City Attorney advised that staff had received legally sufficient petitions and that a public hearing was required. The Committee recommended holding the hearing at the October 26 regular City Council meeting. Council is not required to decide the removal requests at that hearing and may refer the matter to a subsequent work session.
Issues/Analysis:
Parkview is a residential community within the established Downtown Municipal Service District (MSD), and the property was included in the district before the development was built. The district supports downtown revitalization through economic development, marketing, events and other enhanced services. As downtown has evolved into a mixed-use environment, these activities can benefit residents, businesses and visitors. Parkview’s proximity to downtown amenities and programming is relevant to Council’s consideration; however, residential use or proximity alone does not determine whether the properties meet the statutory standard for removal.
The removal process is governed by N.C.G.S. § 160A-538.1(a1). A property owner’s written request must identify the tract or parcel and explain specifically why it does not need the district’s services, facilities or functions to a demonstrably greater extent than the remainder of the City. Upon receipt of a qualifying request, Council must hold a public hearing to receive information from the owners, other affected parties and the public. Holding the hearing does not require Council to approve removal or decide at that meeting.
Under subsection (a), the hearing notice must state the date, time, location and subject and be published at least once, not less than one week before the hearing. For the proposed October 26, 2026, hearing, publication must occur no later than October 19, 2026.
If Council finds that the identified properties do not need district services, facilities or functions to a demonstrably greater extent than the remainder of the City, it may approve removal by ordinance. Subsection (b1) requires the ordinance to pass at two Council meetings by a majority of the voting members present before final adoption. Under subsection (b), removal takes effect at the end of a fiscal year following passage of the ordinance, as determined by Council.
Budget Impact:
Scheduling the public hearing does not affect MSD revenue, the district tax rate, or the City’s adopted budget. The immediate cost is the required public notice and routine staff support. No budget amendment or transfer is requested with this item.
If Council subsequently approves removal, MSD property tax revenue would decrease beginning with the applicable fiscal year. Without a rate adjustment, the revenue loss would require either a proportional reduction in the MSD management contract or an increase in the General Fund transfer to offset the shortfall. Any tax rate, contract, or General Fund funding adjustment would require separate Council consideration and any necessary budget action.
Options:
1. Set the public hearing for October 26, 2026, as recommended by the City Council Policy Review Committee, and direct publication of the required notice.
2. Set the required public hearing for another date and direct publication of the required notice.
Recommended Action::Recommended Action
Set a public hearing for the October 26, 2026, City Council Regular Meeting regarding the Parkview owners associations’ requests to remove the tracts or parcels identified in their petitions from the Downtown Municipal Service District, and direct staff to publish the notice required by N.C.G.S. § 160A-538.1(a).
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Attachments:
Owners Associations’ Requests
Board of Directors’ Certifications