by John Boyle, avlwatchdog.org
A decade ago, downtown business owners and workers had some serious — and familiar — concerns: Public safety was lacking. Aggressive panhandlers were out of hand. Streets and sidewalks were filthy, and graffiti covered many buildings. The city didn’t have enough police officers on patrol.
After three years of meetings and contentious debate, in 2012 downtown stakeholders agreed to push for a business improvement district, a designated area in the central business district in which property owners agreed to pay a special tax in return for enhanced services, like extra security and sanitation. In the 2012 agreement, the stakeholders agreed on an additional 7¢ per $100 of valuation added to their downtown property taxes.
The extra money — estimated at hundreds of thousands of dollars a year — would have paid for a range of services, including cleaning, weed pulling and snow removal, as well as the creation of a group of civilian downtown “ambassadors” who would patrol the district to do everything from reporting illegal behaviors to authorities to escorting people to their parking spaces, if needed.
Asheville City Council approved the BID in October 2012, a few months after a packed and sometimes heated council meeting in which the issues were discussed, according to a Mountain Xpress article from that year. It wasn’t exactly a groundbreaking event — North Carolina at that time already had at least 50 BIDs sprinkled across the state, a number that stands at 63 now — but it generated plenty of controversy.
As Mountain Xpress described it then, proponents included those “active on city boards and in downtown’s power structure,” who “asserted that services in downtown are insufficient.” Opponents included a “mix of business owners, downtown residents and activists” who said the tax would hurt small business and residents “while placing power over tax money in the hands of an undemocratic board.”
While the city council approved the BID, it never enacted the taxation power, meaning the special district never collected the taxes to make the program actually work. In short, it was a death blow.
“Six years of effort that was all pissed away” is how Asheville resident Joe Minicozzi, who worked heavily on the project and was president of the Asheville Coalition of Neighborhoods at the time, described it.
Asheville Mayor Esther Manheimer, first elected to the city council in 2009 and then as mayor in 2013, said recently the idea of the BID tax became too much for some property owners.
“It became too controversial, and it became a challenge when asking property owners to shoulder additional taxes, when they don’t have access to the room tax other communities do,” Manheimer said, referring to the Buncombe County Tourism Development Authority’s occupancy tax. That tax is strictly earmarked, with two-thirds going to marketing the area, the remaining third to a Tourism Product Development Fund.
An old idea has new life
Fast forward a decade, and the idea of a business improvement district downtown — and possibly two others, one in West Asheville and one in the River Arts District — is back.
In April, the Asheville Area Chamber of Commerce brought in Denver-based consulting firm PUMA, the Progressive Urban Management Association, to hold multiple meetings with property and business owners, stakeholders and chamber officials to discuss the idea of a new BID. The chamber, which is footing the $40,000 cost of the study, expects to get a report back at the beginning of June that lays out a plan on how to proceed.
Kit Cramer, president and chief executive officer of the Asheville Area Chamber of Commerce, came to Asheville in November 2010, leaving her previous job as CEO of the International Downtown Association in Washington, D.C., which comprises several business improvement districts.
“I don’t know how many inner city visits we’ve done in the 12 years that I’ve been here, but I know that we have shown off the concept of a business improvement district multiple times, in the hopes that it would take root,” Cramer said. “I’m tired of talking about this stuff, and I’m tired of waiting.”
The idea now is to talk about “what’s most feasible and most likely to succeed, and what it would need to look like,” Cramer said, adding that it will also involve a survey of stakeholders and other legwork. In all, if stakeholders want to move forward, the BID push could take a year or more before it makes it back to the city council, she said.
Cramer said they’ve been feeling business owners out regarding a new run at a BID for several months now, “And nobody has said, ‘Hell no,’ to me.”
“I’m sure there are people out there who might have that feeling, but the vast majority of people have said, ‘Things have changed. We’ve got to have a higher level of service,’” Cramer said.
‘Slowly killing the golden goose’
As Asheville Watchdog reported in its first installment of the series, “Down Town,” workers and business owners have said the downtown has become less safe over the past two years, with increased crime, aggressive panhandling and open drug use.
Several business owners told Asheville Watchdog that the city’s recently enacted 60-day initiative to provide more police patrols and cleanups, coupled with Buncombe County’s now-ended commitment to providing deputies downtown, has helped. But the underlying problems remain, they said.
“I feel like Asheville is slowly killing the golden goose,” said Rick Guthy, a co-founder of Wicked Weed Brewing downtown. “Because when tourists stop coming, and employees don’t feel safe coming downtown, you’re not going to have the thriving, wonderful, culinary, music and art center that Asheville has become.”
Wicked Weed opened on Biltmore Avenue in 2012, while its sister brewery, the Funkatorium, opened two years later on Coxe Avenue on the South Slope. Guthy still co-owns the two buildings.
If a business improvement district could help with cleanliness and safety, Guthy said he’d be “all for it.”
“I’d be willing to pay whatever I needed to pay as a property owner downtown to make that happen,” Guthy said.
Cramer said the idea now is to talk with business owners like Guthy about “what’s most feasible and most likely to succeed, and what it would need to look like.” Discussions also will have to include what business owners are willing to pay for, and what that structure would look like.
Cramer said the intention of a BID is not to supplant what the city is already doing for taxpayers, but rather to augment it.
Business owners say they want full answers first
That would be a key for some business owners downtown.
Eva-Michelle Spicer, co-owner of Spicer Greene Jewelers downtown, said she is “excited for the possibility of a solution,” and she’s been relieved to see more of a police presence downtown in recent weeks.
She said she is intrigued by the BID idea but said, “I think we still have a lot more to learn about it.”
“And as a taxpayer, it’s disappointing that [property tax] isn’t enough, but clearly it’s not,” Spicer said. “And I think that our city has a lot to lose if we don’t maintain the vibrant economic and cultural center that downtown Asheville is. So I’m excited about the possibility of it, [but] disappointed that we had to get there.”
In its previous incarnation, the BID board recommended a 7-cent rate, with a goal of raising $500,000 annually. The 2012 proposal included a “Clean Team” responsible for issues ranging from weed abatement to painting light posts, but it also proposed civilian “downtown ambassadors” who would patrol downtown and report graffiti and illegal behaviors to the police, as well as providing information to visitors and even emergency first aid.
Spicer said she likes that idea, but is not in favor of any kind of new tax going to pay for increased police coverage or private security. The city should be providing that already, she said.
“I don’t think that we need extra tax dollars,” Spicer said. “I think reallocating the ones that we already pay is probably a better solution to that, because we do pay quite a lot of taxes.”
She said she would be in favor of local stakeholders having control of where extra allocations were spent, Spicer added.
William Dissen, owner of the Marketplace Restaurant on Wall Street for the past 14 years, said he was pleased to see agreements between the city and Buncombe County for more policing downtown, because the central business district “has been at the epicenter of the issues and needs support, but support is needed across our community to help protect our people and our future.
“We are also hoping that the city will consider a BID program to help swiftly consider programming and steps to maintain the cleanliness and safety in our neighborhoods across the city,” Dissen added.
Nur Edwards, owner of Asheville Discount Pharmacy downtown, is also on the Downtown Commission and the board of the Downtown Association. She’s also seen firsthand some of the safety and cleanliness issues downtown, and she too welcomed the addition of more policing announced by the city in April.
But as far as a potential new BID, Edwards said, “I don’t feel like I know enough about it right now,” adding that she needs more information on the potential tax rate, how that might break down among business owners, and who would make decisions on where the funds go.
“So I think it could be a really great thing, but it’s also something where we have to see some of the basic services offered through the municipality being met by our taxes,” Nur said, noting that basic sanitation should come with existing property taxes. She also stressed she was speaking only for herself, not the downtown organizations.
A report prepared for the city in 2012 found downtown had about 2,000 business and property owners, and not all would be affected by the tax rate.
All real property owners would have had to pay the tax, and it was estimated to generate $467,038 from real estate taxes and another $32,900 from business property.
The entire Central Business District at the time had a total real estate value of $667.2 million, and business property another $47 million, for a total of $714.2 million.
Downtown resident Kim MacQueen, who formerly owned the Gold Hill coffee shop on Haywood Street, spent three years working on the BID proposal. The main sticking point then, she said, was one that could arise again.
“When it came down to it, a BID is basically trusting in the BID board and allowing them to distribute those funds,” MacQueen said. “[The city and county] didn’t want to pass [the money] through with somebody else deciding where the money got spent.”
The idea of “ambassadors” also became controversial, MacQueen said, which she found odd. MacQueen said one council member told them the word “ambassador” was “fraught with controversy.”
“They just really saw ambassadors as people with wooden clubs that were going to beat up homeless people,” MacQueen said.
Victoria “Vic” Isley, president and CEO of the Buncombe County Tourism Development Authority, said downtown property values and taxes undoubtedly have increased over the past decade. Yet downtown residents, businesses and workers still have fewer public resources from the city than they did in 2015.
Information from the Buncombe County Tax Assessor’s Office shows downtown had a total of 1,359 parcels in 2013, with a total taxable value of $609.7 million. In 2023, the parcels totaled 1,566 and the total taxable value was $1.36 billion.
Isley came to Asheville in 2019, and said she has “seen and been in communities where business improvement districts make a huge difference in the ability for those services to be to be realized for the entire community.”
The idea of “ambassadors” could work, too, Isley said, noting that she saw it work in downtown Washington, D.C., where she lived and worked for 13 years. They were called “community connectors,” though, not ambassadors.
Having a feasibility study done for a BID makes sense, Isley said, although it would have to answer questions about more than just downtown, including the scope and size and whether it would make sense to have BIDs for other areas.
Although Gold Hill closed years ago, MacQueen still owns two buildings on Haywood Street. The city has to concentrate on cleanliness and safety for downtown, she said, especially in a tourism-driven economy like Asheville’s.
From her previous research, MacQueen said, she learned that “BIDs are basically approved by about 51 to 53% of the property owners in a district.” Typically, they come up for renewal every three years, and they’re renewed at 90-plus percent, she said.
Experts weigh in: BIDs can create ‘blurring of private and public space’
Daniel Kudla, an assistant professor in the sociology department at Memorial University of Newfoundland in Canada, has done extensive research and written articles on BIDs, both in Canada and the United States. He said he could not confirm MacQueen’s numbers, but he did say BIDs have been steadily increasing since 2000.
The most recent studies show the U.S. has about 1,500 BIDs. The definition of a BID can be a little nebulous — for instance, in North Carolina, some BIDs have been created in coastal counties strictly for beach replenishment.
As far as the claim that more than 90% of BIDs are renewed, Kudla said he couldn’t speak to that specific number, “but I will agree that oftentimes the renewal is almost a given in most cases.
“I don’t think municipalities are in the business of necessarily getting rid of BIDs once they’ve been formed,” Kudla said.
In North Carolina in fiscal year 2020-21, the state had 63 BIDs, which the state officially terms “municipal service districts.” Some cities have multiple BIDs, including Charlotte with six, and Raleigh and Greensboro two apiece, according to the North Carolina Downtown Development Association.
“We started our legislation back in 1973, so we’ve been at this a while,” Jason Epley, the association’s executive director, said.
The legislation allows municipal service districts to cover a wide range of needs, from beach erosion and control in coastal counties to downtown urban revitalization all over the state. It can also cover sewage collection, disposal systems, watershed programming and more, Epley said.
In general, Epley said, BIDs tend to be renewed at a high rate and are not particularly controversial, as long as they’re accomplishing the goals set out for them. Typically, the municipality contracts with another entity to actually run the BID, as a procurement process is required by the legislation, but the city retains ultimate control over the tax rate and what the BID is tasked with accomplishing.
BIDs in North Carolina come up for renewal as often as once a year, although three to five years is more common. The city can fire the subsidiary entity if it’s not getting the job done, Epley said.
For the 2020-21 fiscal year, Epley said the average tax levy among all BIDs was 12.8¢ per $100 of valuation, but the levy ranged from 1¢ in a Charlotte district to 27¢/$100 in Kinston. Property in some cities is more valuable than others, so the BID rate can vary widely.
Overwhelmingly, BIDs (or MSDs) get renewed in North Carolina.
“I can’t think of any bad examples of where somebody has had an MSD and had problems with it,” Epley said. “I think it’s because you’re providing services for the money.”
Any new BID proposal would need council approval
A new BID proposal likely would have to go through city council again for approval. City spokesperson Kim Miller said the city and city council “value transparency and community engagement, so if the idea were brought forward again, staff would likely re-engage the community before proceeding. However, we would only be able to utilize the existing BID if the same circumstances and same need still applied.”
Kudla said security and crime control typically are among the major drivers of BID formation. BIDs are also used for beautification and cleanliness, as well as marketing the area and sometimes lobbying local governments “so the government can serve some of the private business interests.”
BIDs can create a “blurring of private and public space” and raise questions about “potentially infringing on what should be the duty of the public sector versus a private group,” Kudla said. One question that often comes up, he said, is, “To what extent should private businesses be involved in interactions with panhandlers or people experiencing homelessness?”
Some BIDs do get a lot of power in making decisions about public spaces, and Kudla said in some cases that’s created controversy, particularly if BIDs created “partnerships with the local police, or their own private security or even tourism ambassadors.”
“Those have been seen as somewhat controversial in the sense that they’re basically displacing a lot of people experiencing homelessness, which then displaces that social problem, potentially, to another neighborhood,” Kudla said. “And it doesn’t really address some of those root causes, the structural causes of unaffordable housing, [the] lack of housing. So they’ve been hotly contested in that sense.”
Cities have to manipulate the reins of control over BIDs, he said.
In North Carolina, BIDs don’t require General Assembly approval, but BIDs are not separate governments, according to Connor H. Crews, an assistant professor of public law and government at UNC-Chapel Hill’s School of Government.
As far as cons related to BIDs, Crews said one is kind of the reverse of their primary benefit of the tax revenues staying in a very specific geographic area.
“The flip side of that first one is revenues have to be spent in that area to provide services,” Crews said. “You cannot spend it anywhere else in the city.”
In the debates leading up to the 2012 approval of a downtown BID for Asheville, opponents also said they feared that property owners would simply pass along the extra costs to their tenant businesses.
In a city like Asheville, where almost every topic that comes before the city council becomes controversial, it’s almost assured that the notion of new business improvement districts would be, too.
“I think Asheville could definitely use it,” Epley said. “But the actual implementation of it’s always the challenge.”
Asheville: ‘Every 10 years they want to rebuild the wheel’
MacQueen said the BID idea makes a lot of sense, especially financially.
“We had a good group of people that were supporting it, and we had some conservative, no-tax Republicans who got behind the BID,” MacQueen said. “And the reason they got behind it is because they ran the numbers, and it made sense for them to buy in and do it as a group rather than to do everything separately and individually.”
Still, asked to gauge the chances of success for a new BID, MacQueen paused.
“Here’s the way I look at Asheville: Every 10 years they want to rebuild the wheel,” MacQueen said. “It’s a town that’s really comfortable with charrettes. I think ours was the third time the BID had come forward, but certainly ours was the most detailed.”
Their research showed that BIDs clearly work, MacQueen said, and that one of the main benefits is that the BID allows the area in need to make quick decisions on needed improvements or programs, to be “a rapid response entity.”
But MacQueen also acknowledged that working on the proposal for so long, with it ultimately being fruitless, was tough to swallow. So, would she get involved in a new BID proposal?
“I can’t imagine I would, but on the other hand I’m a chump, so I probably would,” MacQueen said with a hearty laugh.
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. John Boyle has been covering Asheville and surrounding communities since the 20th century. You can reach him at (828) 337-0941, or via email at firstname.lastname@example.org