As Bossier City prepares for a wave of new development along the Red River, city leaders are considering a new strategy for connecting the Louisiana Boardwalk, East Bank District, casinos, restaurants, hotels and other entertainment destinations into a larger tourism district.

The proposal, known as “The Row” and “The Row II,” would establish two economic development districts along the riverfront. While the Bossier City Council has advanced the districts, the action taken so far does not impose a new tax.

A future proposal, however, could impose an additional sales tax of up to 2% within the districts, potentially generating an estimated $1.5 million to $1.8 million annually, according to information presented to the council. The additional sales tax could make the districts among the highest in the state.

The proposal has generated questions about how the districts were drawn, who ultimately would pay the tax and how the money could be used.

Under Louisiana law, an economic development district can levy up to 2% in additional sales taxes, along with certain property and hotel occupancy taxes, subject to statutory requirements. The law also permits revenues to be used for economic development projects, including public works and infrastructure, commercial and retail development, entertainment and tourism-related projects.

The Bossier City proposal divides the riverfront into two districts. The Row would encompass retail and commercial properties, including the East Bank District, Louisiana Boardwalk, restaurants, hotels and entertainment businesses. The Row II district would encompass the area’s casinos.

City officials and supporters say the separation is necessary in part because casinos operate under different tax structures.

Supporters envision the districts as a way to create a more connected destination along the riverfront, potentially funding improvements such as lighting, security, transportation, infrastructure and pedestrian connectivity. The idea is that visitors who come to one attraction could be encouraged to visit other nearby businesses and entertainment venues.

“These places are the strong individual experiences, but they are not yet presented to visitors as one connected destination,” Councilman Chris Smith said during the Sept. 1 council meeting, according to public statements reported after the vote.

Smith said the concept is intended to create a cycle in which increased visitation benefits businesses throughout the area.

The council’s Sept. 1 vote established the proposed boundaries and legal framework for the districts but did not authorize the 2% sales tax. The ordinances are expected to return to the council for final consideration, and any tax would require separate action.

That distinction is important because Louisiana law gives economic development districts significant taxing authority.

State law allows an economic development district to levy up to 2% in additional sales taxes, above taxes already imposed within the district. Before such a tax can be levied, the district’s governing authority must adopt a resolution giving notice of its intent and provide for a public meeting at which objections can be heard.

The question of whether voters would directly approve the tax is more complicated.

Louisiana’s economic development district statutes contain different requirements depending on the circumstances of the district. The law governing the authority cited for these districts provides for additional sales taxes of up to 2%, while the statutory process focuses on notice and a public hearing before the levy.

That differs from other types of Louisiana special districts, where state law expressly requires voter approval before an additional sales tax can be imposed. For example, the state’s general sales tax district statute requires approval by a majority of qualified electors voting in an election.

According to many local business owners within the districts, they were unaware of the proposed additional sales tax.

The proposed Bossier districts also raise questions about who would have a voice in how the money is spent.

The proposed structure calls for a nine-member board with representation from East Bank merchants, Boardwalk merchants and the casino industry, along with the Bossier Chamber of Commerce president and representatives appointed by the mayor and City Council. The proposal also calls for separate trust funds for the districts.

Supporters argue that structure would give businesses inside the districts a direct role in determining how revenue is spent and provide greater accountability than placing the money into the city’s general budget.

Economic development attorney Mike Busada, who has worked on similar districts in Louisiana, has said the districts would be subject to annual audits by the Louisiana Legislative Auditor, allowing the public to track revenue and expenditures.

But the structure also raises an obvious question: Who ultimately bears the cost?

A 2% sales tax would apply to taxable purchases and services within the district. That means the additional charge would generally appear on the customer’s receipt, although the businesses located within the district would be responsible for collecting and remitting the tax.

For a business competing with establishments outside the district, the difference could become a factor in where customers choose to shop, dine or spend money.

The concept also is unique to Bossier City though.

Louisiana communities have used economic development districts and sales tax increment financing to fund development projects.

The difference in Bossier City is the location and the businesses involved.

The proposed districts would sit at the center of one of the region’s most visible entertainment corridors at a time when significant private investment is already underway.

The Louisiana Boardwalk is entering another phase of redevelopment. Projects such as the Louisiana Grandstand are planned for the riverfront. The East Bank District continues to operate as a dining and entertainment destination, and the city’s casinos remain major tourism and hospitality anchors.

The proposed district therefore raises a larger question about how Bossier City wants to pay for and manage the next phase of riverfront development.

Should the city rely primarily on existing tax revenue and private investment to fund improvements? Should businesses inside the district contribute an additional tax because they stand to benefit from increased tourism and infrastructure? And if an additional tax is approved, how much of that money will directly benefit small businesses compared with larger properties and destination projects?

Those questions have not yet been fully answered.

What is clear is that the proposal currently before Bossier City leaders is more than a boundary-setting exercise. It creates the framework for a potential new taxing mechanism covering a highly concentrated collection of businesses and attractions.

The proposed districts do not currently impose the 2% tax. That would require another step by the city.

As the proposal moves toward its next vote, businesses and residents will have an opportunity to examine not only the promise of a more connected riverfront, but also the details of how the districts would operate, who would control the money and who would ultimately pay for the vision.

For Bossier City, the question is no longer simply whether the riverfront should grow.

It is how that growth should be funded, who should benefit from it and how much the businesses and customers within the proposed districts should be asked to contribute.