TO: Mayor and Members of City Council
THRU: Kelly Strickland, Assistant City Manager
Jeffery Yates Assistant City Manager
FROM: Chris Cauley, MPA, Economic and Community Development Director
Derrick McArthur, Economic Development Manager
DATE: February 9, 2026
RE:Title
Public Hearing on Owner’s Request for Removal from Downtown Municipal Service District
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COUNCIL DISTRICT(S):
Council District(s)
District 2
b
Relationship To Strategic Plan:
Goal 2: Responsive City Government Supporting a Diverse and Viable Economy
2.1: To ensure a diverse City tax base
2.2: To invest in community places to ensure revitalization and increase quality of life
Goal 4: Desirable Place to Live, Work and Recreate
4.4: To provide a clean and beautiful community with increased green spaces
4.5: To ensure a place for people to live in great neighborhoods
Goal 5: Financially sound city providing exemplary city services
5.1: To ensure strong financial management with fiduciary accountability and plan for future resource sustainability by aligning resources with City
Executive Summary:
Council is asked to hold the public hearing required by North Carolina General Statute §160A-538.1(a1) and provide direction to City staff.
Background:
At the January 09, 2026, Work Session, City Council directed staff to hold a public hearing regarding the reduction of the Downtown Municipal Service District (MSD) Boundary.
The City established the Downtown MSD in 1978 under Article 23 of N.C.G.S.§160A, authorizing an additional ad valorem tax fund to fund enhanced downtown services. The district expanded in 1983 and has been renewed every five years since, most recently in June 2023 Resolution R2023-024. The current rate for Fiscal Year 2026 is $0.1489 per $100 of assessed valuation.
The MSD supports activities such as: Economic Vitality and Development, Art and Design Enhancements, Promotion and Marketing, Special Events and Programming, and Partnership, Organizational Support, and Conflict Resolution that are beyond the scope of the City’s general fund.
The Park View Townhouses and Condominiums developments at 301 Bragg Boulevard were completed in 2013 on the former Days Inn property through public-private redevelopment agreement with H & H Holdings. The project delivered 49 townhomes and condominiums valued collectively at approximately $19 million and is managed by Park View Townhome Association and the Park View Condominium Association. County Geographical Information System confirms these parcels entirely within the current MSD boundary. There are also other exclusively residential properties within the MSD boundary.
Issues/Analysis:
While Park View is a fully residential community, it lies within the established Downtown Municipal Service District. The MSD was initially designed to promote downtown revitalization through business development, events and placemaking efforts. Overtime, however, downtown has evolved into a mixed-use environment where residents, businesses and visitors share in the benefits of enhanced maintenance, security, marketing, and cultural programming.
Residents of Parkview directly benefit from the proximity to downtown amenities and events such as the Dogwood Festival, the International Folk Festival and seasonal programming that enhance quality of life and property values. The continued investment and activation of the downtown through the MSD have helped sustain higher demand and market appreciation for residential properties near the urban core, including Parkview.
If Council wishes to alter the Downtown MSD boundary, the process is governed by N.C.G.S.§160A-538.1 In the case, subsection (a1) applies. Under subsection (a1), a property owner may submit a written request to the City Council to remove the owner’s tract or parcel of land from a service district. The owner shall specify the tract or parcel, state with particularity the reason why the tract or parcel is not in need of the services, facilities or functions of the proposed district to a demonstrably greater extent than the remainder if the City and provide any other additional information the owner deems relevant.
Upon receipt of the request, the City Council shall hold a public hearing as required by N.C.G.S.§160A-538.1. If the City Council finds that the tract or parcel is not in need of the services, facilities or functions of the district to a demonstrably greater extent than the remainder of the City, the City Council may, by ordinance, redefine the service district by removing therefrom the tract or parcel.
Mr. Joseph Jackson submitted a request to Council on February 10, 2025, for removal of his parcel from the Downtown Municipal Service District.
The removal of any tract or parcel of land from any service district shall take effect at the end of a fiscal year following the ordinance, as determined by the City Council, according to N.C.G.S.§160A-538.1(b).
Budget Impact:
Should Council amend the boundary to remove the tract or parcel located at 220 Hugh Shelton Loop 203, Fayetteville, NC, the Municipal Service District (MSD) Fund would lose $700.28. Without a rate adjustment, reduction in revenue would require either a proportional decrease in the MSD management contract or an increase in the General Fund transfer to offset the shortfall.
Options:
1. Hold the Public Hearing and take no further action today.
2. Hold the Public Hearing and direct staff to remove the parcel from the Downtown Municipal Service District because the City Council finds that the tract or parcel is not in need of the services, facilities or functions of the district to a demonstrably greater extent than the remainder of the City.
3. Hold the Public Hearing and direct staff as to some other option.
Recommended Action::Recommended Action
As this determination is at the discretion of City Council, staff does not have a recommended action.
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Attachments:
Notice of Public Hearing
Mr. Jackson’s Request