After months of discussion and public input, the Princeton City Council officially approved its business development district following a public hearing on Monday night.

The district will now allow Princeton to impose an additional sales tax, up to 1%, with the revenue dedicated to economic development efforts.

The council voted 4-1 in favor of the district, with Councilman Jerry Neuman the only one to vote against it.

A BDD serves a role similar to a tax increment financing district by providing funding for business and redevelopment projects. Still, it relies on sales tax revenue rather than property taxes.

“The point of this business development district is to address some of the signs we’ve seen lately as far as economics go,” Planning & Zoning Administrator Michael Zearing said. “We have empty storefronts, historic buildings at risk and areas that need investment.”

The council, which previously voted 3-2 in favor of the district at its last meeting, was generally in agreement that the city isn’t necessarily headed in the right direction in attracting new businesses while retaining its existing businesses and that the district could help turn things around.

While the council felt good about moving forward, most of the public hearing involved locals who questioned whether the district was really helping or whether the public needed to be better informed.

Princeton resident Geraldine Woodlief said she took steps to gather feedback from local business owners ahead of the meeting.

“I took two days and got signatures from our dear friends here at Princeton, business owners, and guess what? Everybody said forget it,” Woodlief said.

She also questioned how widely information about the proposal had reached the public, noting the relatively small turnout at the hearing.

Other residents raised concerns about transparency on how the district’s funds would be used and the potential negative impact of additional sales taxes on consumers and small businesses. Many emphasized the need for clear communication and accountability as the district moves forward.

Princeton resident Lynn Holtz supported the district, arguing it’s a necessary tool as the city adapts to an evolving economy.

“This is one component of economic development, not the end-all, but a crucial piece,” Holtz said. “We cannot continue to do business the way we always have because it’s simply not working.”

Holtz also noted that a large chunk of sales at many local businesses comes from visitors to Princeton, and the BDD would help capture more of that.

“This is not just about supporting businesses in Princeton. It’s also about capturing spending from visitors and keeping those dollars in our community to help local businesses,” Holtz said.

Mayor Ray Mabry shared examples from other Illinois mayors who have used business development districts, emphasizing how the tool helped their cities achieve economic development goals.

The district covers most of Princeton’s primary commercial areas, extending from the I-80 corridor through the city’s north business district and into the downtown area.

As for next steps, now that the district is approved, Zearing said the city will align priorities and establish a budget before developing a strategic action plan. However, he said most of the priorities were already set based on feedback from the city’s public meeting in January.