Taking care of BIDness

When the draft Downtown Master Plan lands on Asheville City Council members’ desks sometime this spring, it will include at least one controversial recommendation by consultants Goody Clancy: that the city form an independent management entity to oversee certain public services traditionally provided by city government. Both the management entity and the services rendered would be funded by a special tax on downtown property.

So-called “business improvement districts” are common nationwide, and though the draft master plan is still getting nipped and tucked before being sent to City Council, the BID idea has already sparked discussion among assorted downtown stakeholders.

The Downtown Commission’s Feb. 20 meeting was devoted to parsing the chapter concerning a proposed Asheville Development District—one reason the plan’s first appearance before Council was bumped from March to May. And Sasha Vrtunski, the city’s project manager, told the commission that a good portion of the public comments collected about the draft plan had directly referenced the BID proposal. With Goody Clancy staffer Ben Carlson on conference call, commission members asked the consultants to soften the language to make it clear that the community and City Council would be the ones to determine if, and how, to move forward with a BID.

“The plan is establishing that we’re going to have the conversation,” Downtown Commission Chair Pat Whalen explained. Another request was to change the unfortunate acronym (ADD) to the more generic-sounding CID (for “community improvement district”).

Meanwhile, groups representing downtown businesses and residents are hosting their own meetings and information sessions to assess whether a BID might help address their concerns about such festering downtown issues as panhandling and graffiti. And while some groups are already taking sides, others want more information before turning thumbs up or down.

Getting that information and educating the public could take a good while—one to three years, Whalen told the commission—meaning Asheville will probably be hearing a lot more about BIDs.

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Across the country, BIDs are a diverse lot. Each of the more than 40 states that allow them has its own enabling legislation and requirements (in North Carolina, the official term is “municipal service district”). And each city that puts one in place customizes the idea to meet its particular needs. Nationwide, BIDs handle everything from trash pickup to parking to marketing and even security.

The common thread is that city government doesn’t manage the services provided, and the funding comes exclusively from the district’s property owners. The tax, which the city collects on behalf of the BID, is typically based on either square footage or the amount of property taxes paid. The bottom line is typically 10 to 15 cents per square foot, or 5 to 6 percent of property taxes paid, according to BID expert Lawrence Houstoun. In Portland, Ore., the BID has a $4.5 million annual budget; in Washington, D.C., it’s $8 million.

The system is widely credited with cleaning up downtown areas in cities such as Philadelphia and Baltimore, making them more inviting both to visitors and to new or relocating businesses. Many BIDs also lobby city and state officials concerning downtown issues.

But downtown Asheville’s revitalization is more or less a fait accompli at this point (though it hasn’t rendered the area immune to the current economic slump): Drawing people to the city center isn’t typically a problem. Nonetheless, business owners and residents alike have ongoing complaints about things like graffiti and cigarette butts.

And since the draft master plan was first made public back in January, some stakeholders have zeroed in on the BID idea. For some, accurately representing the many faces of Asheville on the BID’s board will be crucial to its acceptance by the public; others are concerned that the funding source be equitable. Susan Griffin, president of Downtown Asheville Residential Neighbors, notes that much of downtown consists of tax-exempt, publicly owned property. That kind of thing, she believes, needs to be factored into the equation.

Red flags

Controversy surrounding BIDs is nothing new. In a 1996 summary for the Manhattan Institute for Policy Research, staffer Heather Mac Donald wrote that such districts have “been accused of everything from polarizing rich and poor to imposing unnecessary taxes.” And apparently not much has changed in the ensuing 13 years.

Rick Reinhard, deputy executive director of the Downtown D.C. BID in the nation’s capital, says that during his presentations, he uses a poster showing Michael Moore on one side and Rush Limbaugh on the other. “These two wouldn’t like BIDs” he asserts. “People from the far left say, ‘We didn’t elect you to the BID.’ And people from the far right say, ‘We don’t want to pay more taxes.’ But the middle 80 percent like them: Ideologues don’t like BIDs, but pragmatists do.”

So far, that breakdown seems to fit the situation here in Asheville, where government watchdogs have wondered how accountable the BID would be to the public. Nationwide, there’s a lot of variety in how business-improvement districts are structured; state law determines some of it, and the rest is left up to each individual community. In Asheville, of course, those specifics haven’t even been worked out yet, which appears to be fueling fears in some quarters.

But generally speaking, much of a BID’s power—and its ability to carry out projects over an extended period of time—stems from the fact that it’s somewhat insulated from the changing whims of politics. “Political cycles and business cycles don’t often coincide,” Reinhard points out. “Too often, government agencies get a change of direction. This is something the businesses can control.”

Often, BIDs have a board representing various segments of the community, as well as paid staff. But while City Council would most likely have a say in appointing such a board, business-improvement districts aren’t typically elected bodies—a particular concern when it comes to things like putting private security guards on the street. The BIDs contacted by Xpress for this story say their security guards can’t make arrests and simply radio police when they spot a problem, though Portland’s 17-member downtown security force is made up of retired police officers who do carry guns.

Meanwhile, at the Feb. 20 meeting, Brad Galbraith told his fellow Downtown Commission members, “I’ll be dadgum if I’m going to support something that is going to be a new tax.”

But that doesn’t mean the idea has no legs here. Although outright endorsements have been scarce so far, a few downtown groups are already floating the BID balloon.

“We are definitely looking at it,” Asheville Downtown Association President Byron Greiner reports. “And we do think we’d be able to take a leadership role [in its formation].” Last November, the association hosted a presentation by BID staffers from Charlotte, Greensboro and Chapel Hill to drive home the point that such districts already exist in North Carolina in cities of varying size.

But Greiner says there’s still a lot of public buy-in to be achieved here in Asheville, and convincing the community that the benefits justify the cost will take effort. “If you get all the elements together, gosh, this makes sense,” he maintains. “But if you don’t, it’s just another tax.”

Downtown déjà vu?

Considering Asheville’s recent history, it makes sense that the Downtown Association would be in on the ground floor of the local BID debate. The nonprofit group, whose Web site describes it as “committed to the preservation and improvement of the central business district,” is the closest thing the city now has to the kind of downtown advocate a BID would be.

From around the mid-1980s to the mid-‘90s, the city’s Office of Downtown Development helped focus attention and energy on an area that was struggling to emerge from a decades-long slumber. Forging partnerships with nonprofits, downtown merchants and other organizations, the city office formed the Downtown Association as part of its overall revitalization strategy.

“It was pretty forward-thinking and entrepreneurial for that time,” says Leslie Anderson, who was the city’s downtown development director for a number of years. In fact, her office actually pitched a BIDlike structure to City Council at one point but was rebuffed in the face of resistance from some downtown property owners, who couldn’t get past the idea of “just another tax.”

“So Council did not agree to it,” Anderson recalls. “We thought we had a lot of support going into the meeting, but it didn’t go the way we thought it would.”

Similarly, any form of BID created now would still be subject to the will of City Council, which under state law not only designates the district but spells out what services the BID will provide and how much tax to levy against the affected properties. The law also says a public hearing must be held, but for the general public, a bigger role could come up front—such as downtown stakeholders petitioning Council to form such a district.

“From my experience, you really need champions from within the downtown community,” notes David Dixon of Goody Clancy, a specialist in planning and urban design who is the draft plan’s public face. But while Dixon says he’s seen BIDs work in both liberal Portland and conservative Texas, he cautions that Asheville’s diversity and contentious political environment may make for a tough process here.

“Asheville is a place where people have differing world views,” Dixon observes. “I’m not pessimistic about Asheville forming a BID, but it may happen easier where people think alike.”

A good fit for Asheville?

For Asheville, the question may be less “Can we do it?” than “Do we need to?” A first step in figuring that out, says Whalen, is establishing a base line for existing city services. That involves three factors: What does the city provide now? What does the downtown community want? And what percentage of the taxes collected from downtown are actually used to fund downtown services? If there’s too big a gap, several Downtown Commission members say, it could turn out to be a question of revisiting how funds are allocated rather than turning to a new fiscal model.

Reinhard, meanwhile, notes that BIDs are typically formed in response to a big event or even an emergency. “In Buffalo, they needed to shovel snow; in Atlanta, the Olympics were coming.” And in D.C., he says, a new performance center made keeping the surrounding area clean and safe a priority. Some districts have even been formed in the wake of a high-profile, violent crime.

“Often a BID comes out of an opportunity or threat,” says Reinhard. “When it does, the BID is often more easily adopted.”

Another common catalyst is an abandoned, economically crippled downtown—a hurdle that Asheville has already cleared.

“Just because it works in other cities doesn’t mean it’s right for Asheville,” argues Downtown Master Plan Advisory Committee member Jen Bowen. An artist who recently hosted her own informal forum on the draft Downtown Master Plan, Bowen asserts, “We don’t need to turn around Asheville; we just need to state where we want to be as a city.”

While in D.C. for Barack Obama’s inauguration, she reports, she saw people wearing Downtown D.C. BID T-shirts working to keep up with the mountain of trash produced during the event, and she asked a few of them about the BID. “They liked the fact that it created more service-industry jobs,” Bowen recalls.

And indeed, in some communities, those kinds of jobs have served a dual purpose, providing work for homeless people while helping address downtown business owners’ concerns about panhandling.

But most BIDs, says Bowen, are also designed to invite growth, development and even chain stores into the downtown area—things many Asheville residents think the master plan ought to help prevent.

Meanwhile, Asheville already has several private membership groups that put up money for downtown enhancements or petition city government for things like performances in Pritchard Park. Last Christmas, for example, the Downtown Association distributed fliers to try to recruit more buskers to be on the streets during the holidays, and the Grove Park Inn donated $40,000 to the city to fund fireworks displays meant to lure shoppers and diners downtown during slow, cold, December weekends.

And if Asheville does adopt a BID, don’t assume that it’ll all be smooth sailing from there, Reinhard warns. They sometimes step on toes, he notes—which is probably inevitable when an independent management entity makes decisions concerning a downtown that belongs to everyone, not just the property owners funding the BID.

“Some people praise us; some give us the finger,” he reports.

 

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One thought on “Taking care of BIDness

  1. bobdurivage

    When you say independent management entity, don’t you mean privatizing services? Privatization has a history of working well at first but after a time, the benefits no longer exeed the cost. What BIDs have been around the longest and are they still worth the cost?

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