Understanding Economic Development Tools – What is a CID?

Last week the Cape Girardeau City Council held a public hearing for the creation of River City Centre Community Improvement District (CID). If approved, this would be the sixth CID created in Cape Girardeau to support development activity and growth. Understanding how and why to use various financing and incentive tools is a key to community competitiveness.

The Community Improvement District Act was established in 1998 and allows for the formation of community improvement districts (CIDs) under Sections 67.1401 to 67.1571, RSMo. CIDs are separate legal entities, which are established to pay for either public improvements and or private projects of public use. The projects are usually financed by these districts through a sales and use tax, special assessment, or real property tax.

Missouri is not unique, according to a report for the Federal Highway Administration “all 50 states, along with Canada and the Caribbean, have CID legislation.” While each state or counties rules may vary slightly the intent of the tool is to help support growth and reinvestment for the betterment of the community.

While the use of incentives should certainly be reviewed carefully, one important fact to consider is that there are well more than five hundred Community Improvement Districts currently established throughout Missouri. These tools can be as much about creating the quality of life needed to grow and attract people to the region, as they are about incentivizing development.