Boutique owner ruled ineligible for reappointment to downtown board

Since the appointment of its newest member in December 2022, things have been less than harmonious on the Downtown Improvement District Board of Directors. 

But retail business owner Harmoni Krusing will remain on the board, otherwise made up of downtown commercial property owners, at least until Dec. 31, 2025. 

The rub is that unlike the rest of the five-member board, Krusing is a tenant. She serves on the board as a representative of Bob Morris, who owns the building in which her store — Lotus Boutique — is located. Morris also owns other downtown commercial properties. 

Although her appointment is opposed by the rest of the board, City Attorney Robert Fournier said she was eligible based on a provision in the ordinance, quoting, “if the owner of non-residential real property within the district is a corporation, partnership or any other non-natural person, one individual with executive authority within said entity may become a member of the board of directors.”

Krusing has such executive authority from Morris, the definition of which was deemed murky at best.

Other board members told commissioners that a retailer serving on the board will not necessarily hold the same interests as the property owners who pay additional property taxes into the district for an enhanced level of services. 

During public comments, Morris argued that Krusing does in effect pay all property taxes via triple net lease — a lease in which the tenant agrees to pay real estate taxes, building insurance and maintenance costs. 

To make the other board members' case, though, Morris admitted he and Krusing don't always agree on DID policies.

The DID board first brought its objections to commissioners in March, when it asked for clarification of the eligibility criteria. 

At that meeting, Fournier proposed an ordinance that eliminated the reference to the term "executive authority within said ownership entity." Commissioners did not act on that, but rather instructed him to prepare an ordinance to be considered at a later date.

Commissioner Jen Ahearn-Koch argued that permitting a tenant to be on the board of directors opens board involvement to property owners who live elsewhere. 

Commissioner Debbie Trice joined Ahearn-Koch on the losing side of a 3-2 vote on Vice Mayor Liz Alpert’s motion, which struck a balance between exclusive owner board membership and maintaining the status quo, at least until the expiration of Krusing’s term.

The motion included that Krusing will not be eligible for reappointment, unlike property owners. That she was placed on the board under a previous provision, though, precludes her from being removed.

“I think that it should be the property owners and I also don't think that you should make any legislation for one person, so I don't think you put in there that (Krusing) can be reappointed,” Alpert said. “That’s really bad legislative policy.”