Wednesday, March 26, 2014

Beyond the Assessment: The Top 5 Alternative Funding sources for Business Improvement Districts

Business Improvements Districts (BIDs) provide valuable, stable funding  for commercial district management activities. Yet one critical, and often overlooked, BID function is the ability to raise additional funds beyond the assessment.  BIDs are effective at leveraging funds in part because the members of a BID – property owners, merchants and in some cases residents – make for a powerful and vocal constituency.
While the degree to which BIDs raise outside funds is very inconsistent (there are  BIDs both small and large that do not have alternative revenue streams) many do successfully find ways to raise additional money. Here is a quick overview of BID revenue streams, based on my experience with New York BIDs, with some suggestions for potential benchmarks for organizations both large and small.   

  1. Assessment: No discussion of BID revenue is complete with mentioning the assessment itself. The special assessment is what makes a BID a BID. Assessments for BIDs are mandatory contributions that property owners must make to the organization, or face penalties or even leans on their properties. These assessments are typically collected by a public agency (although Pennsylvania is at least one exception - there BIDs are responsible for collecting their own assessment) and redistributed back to the BID. State enabling legislation is required to form a BID, but once legislation has been passed, the assessment is assured. For most BIDs, the assessment typically makes up between 75% - 95% of a BID’s budget.
  2. Grants/Contributions: BIDs are non-profit organizations and can therefore apply for grant funding and solicit tax deductible contributions. Because of this, grants and contributions are another popular revenue stream. Bryant Park and the Time Square Alliance – both BIDs with budgets between $1 million and $5 million annually, raise nearly 20% of their budgets from grants and contributions. Smaller organizations (in New York) within CDBG-eligible areas often apply for city grant monies through a program known as Avenue NYC. These grants are typically between $5k and $40k. In some cases, federal or state funding can be secured through local political leaders. In the case of Sunset Park, Brooklyn, the local Congresswoman was able to contribute $180k in funding over a two year period to the program. 
  3. Fundraising/Special Events: Even very small organizations can raise money from special events. A successful BID can aim to raise between 10 – 15% of its annual budget from special events, or anywhere from $5k to $30k or more. Much larger BIDs, those with budgets between $1 million and $5 million, often have substantial additional resources coming from fundraising and special events. Two of New York’s largest BIDs, 34th Street Partnership and Bryant Park regularly raise between $1 – 2 million annually. Although to be fair, Bryant Park is able to host such storied events as Fashion Week – so it is admittedly a bit of an outlier.
  4. Investment Income:  Although investment income (interest on savings) is negligible, especially with interest rates so low,  interest income can make up to 1% of the annual budget.
  5. Special Contracts: In some cases, BIDs contract with outside entities to manage or run additional programs or facilities. One example is parking. Some BID’s have established relationships with local parking authorities and manage parking lots in return for the lot's revenue. And in some cases, the revenue is substantial. In the case of the Lower East Side BID, for instance, parking lot operations made up nearly 50% of the BIDs 2011 budget.     
These are the largest revenue streams for BIDs in New York - but we'd love to hear more about BIDs in other cities and states. Raising revenue is a challenge for all of us - and good ideas are great to share!




Monday, March 24, 2014

We're Hiring!

Larisa Ortiz Associates/The Commercial District Advisor is looking for a Summer Project Associate to join our team. Do you know a current graduate student (or recent graduate) who is crazy about commercial districts? If so, send them our way!

Wednesday, March 5, 2014

Why you can't afford to ignore the trend towards bicycle friendly business districts.

What do Austin, San Franscisco, Portland, Chicago and Washington D.C. have in common? Why, an expanding network of bike lanes, of course! Expanding the transportation options and improving access to commercial districts is gaining steam, and here at the Commercial District Advisor we are generally pleased with this trend. Creating and maintaining a network of bike infrastructure is one critically important way to help local businesses. But the issue is not always so clear cut in some places, and implementing interventions that may change the business environment for long standing businesses needs to be managed carefully. For many businesses whose customers historically arrive by car, the lack of immediately accessible and visible car parking, not to mention the challenges of managing deliveries when a bike lane takes us the space immediately in front of a store, are a legitimate concerns for some businesses. If  existing customers find it less convenient to patronize a store, and the business has not yet started attracting new customers, there will be inevitable growing pains. 

The fight in New York's Upper West side, where a 6' protected bike lane was installed after facing resistance from the local Community Board, is indicative of what happens in many cities. The owner of a local lingerie shop, in business for 17 years, said "It's one more piece of space it's taking up, people are not riding their bikes to go shopping." ("Business Owners Dish on Columbus Ave Bike Lanes: From 'Love it' to 'It Sucks'", West Side Rag, 1/8/13). A number of studies by bike advocacy groups suggest otherwise. They have found that local businesses do in fact benefit from customers who arrive on bike, but it can take a little while to change shopping habits. For some businesses whose offerings and clientele include older, long-time residents, the changes can be a little tougher to manage. In fact, much of the argument on the Upper West side was split by an age demographic. A blogger for Streetsblog who was covering the Community Board debate wrote "I was at this meeting, and was struck by the age divide: older people against a bike lane...and younger people in favor." But as the blogger noted, the changes have also created a safer pedestrian environment, which benefits those who do not ride bikes as well. 

Perhaps most significantly for our purposes, and the reason why on the whole bike lanes are great for commercial districts, is because they are just plain good for business. A recent study issued on bike lanes found that "in growing urban communities, protected bike lane networks encourage more people to ride bikes for everyday trips. And when people use bikes for errands, they're the ideal kind of retail customers: regulars. They stop by often and spend as much or more per month as people who arrive in cars." (For the full report, click here: "Protected Bike Lanes Mean Business: How 21st Century Transportation Networks Help New Urban Economies Boom"). Business owners sometimes express concern that bike riders don't spend as much per shopping trip, but studies show that they spend more total and return more frequently than the customer who arrives by car. In San Francisco, the study found that bike lanes and wider sidewalks on Valencia Street improved business for 66% of businesses. 4% indicated it hurt sales. 
From: Protected Bike Lanes Mean Business

One very important and less mentioned benefit of bike lanes and bike infrastructure (and one that we trumpet quite regularly) is the ability to draw more customers from a slightly larger trade area. This is our primary reason for supporting this effort. Enlarging a district's primary trade area - the geographic area from which 60- 80% of a district's customers come from - is a great strategy for helping businesses grow sales. In walkable urban communities, it is not uncommon for someone to walk 10-minutes, or about 1/2 mile at a leisurely pace, to patronize a local business. A 10-minute bike ride on the other hand pulls people from a 1.5 radius (again, assuming a leisurely pace). We ran the numbers for the neighborhood surrounding our office here in Jackson Heights, Queens and the results were astounding. The difference in trade area was the difference between 67,789 potential customers and 366,564 potential customers. Wow. 

Source: ESRI, Census 2010. Based on a radius drawn from 78-27 37th Avenue, Jackson Heights, NY
So while change can be a difficult pill to swallow from some businesses, the implications of installing and maintaining a robust bike infrastructure cannot and should not be overlooked as a vital tool in the commercial district managers toolbox. 

Tuesday, March 4, 2014

Event Announcement: Shopping Centers Today, LIVE!



On April 8th, 2014 I will be participating on a panel of accomplished government officials, developers and retailers as we discuss methods for fast tracking economic expansion. This event, hosted by Shopping Centers Today, is being held at the Chicago Marriott Downtown . If you are in Chicago, consider joining us part of the live studio audience. If you can't join us, you can live stream the event on your Iphone or smartphone and a podcast will be available after the event. To register and for more information click on these links for the program Brochure and Registration Page

My perspective (as usual!) will be how non-profit intermediaries, like Business Improvement Districts, can (and often do) play a powerful role in supporting and expediting development in urban markets. My fellow panelists (see below) will have alot more to say about how retailers, developers and government can also expedite the process. 

Steven M. Elrod, ESQ.
Executive Partner - Holland & Knight

Lawrence E. Kilduff, CRX, CDP, CSM
Senior Vice President, Retail Market Lead
Jones Lang LaSalle, Chicago, IL

Lyneir Richardson
Chief Executive Officer
Brick City Development
Newark, NJ

Sue Walker
Director, Economic Development
Richardson Economic Development Partnership
Richardson, TX

See you in Chicago! 

- Larisa

Larisa Ortiz is Principal of Larisa Ortiz Associates, Commercial District Advisors. 



BID Tips for Snow Removal

This winter has been a brutal one. Many businesses and commercial districts have struggled to keep up with snow removal. Contributor Chris Bernardo, Principal of Commercial District Services LLC, a provider of supplemental services to managers of outdoor public spaces, offers our readers a few valuable tips for dealing with these snowy challenges. 

As we enter the last few weeks of our most recent winter of discontent and the snow banks scattered around our commercial districts begin to decrease in size and fill the sewer drains with slush water and thawed pieces of litter and debris, it seems like a good time to look back and share some thoughts on snow management in commercial districts.

As cities struggle to maintain sufficient levels of police and sanitation services, most Business Improvement Districts (BIDs) have adopted programs that fund supplemental services to provide increased police/security patrols and sanitation/litter removal. In almost all cases, these supplemental services are superior to those that the public sector could provide given the available resources and City budgets that are already stretched to the limit.

Similar to Police and Sanitation services, many BIDs are finding that supplemental Snow Plowing and Snow Removal services are necessary in order to free up parking spots and to keep roadways from becoming too narrow. For those districts that find themselves faced with this option, there are some things to consider when planning out your snow removal strategy:

  • It’s important to determine if the main commercial strip can accommodate snow piles, if so, you may be able to simply plow the snow from the parking spaces into piles at the end of each block. If there is no room for snow piles or they create too much of a hazard, then it will be necessary to physically remove the snow from the district, which increases the cost and coordination needed.
  • Does your city prohibit parking on snow covered roadways? If not, you will need to coordinate an emergency “no-parking” strategy with the City, which needs to be planned for well in advance of the winter. It is advisable to draft a plan and distribute it to property owners and tenants at the beginning of the winter season so that they are prepared to move their vehicles, before being ticketed and towed. Not having a “no parking” plan in place can make or break a successful snow removal strategy. Getting the necessary approvals and coordinating the enforcement of prohibited parking can take longer than is practical. A solid “no parking” plan should include a local ordinance which identifies those specific streets within the BID where prohibited parking will be in effect, an MOU between the BID and local Police Department/Parking Authority stating the mutual commitment of each party to enforcing the ordinance and the understanding that Police personnel/power will need to be deployed in order to enforce the ordinance, ticket/tow vehicles and enforce traffic/street closures.
  • Where will the snow be placed once it is removed from the district? Carting snow is a slow process, a large dump truck with a 20 cubic yard roll-off can take a while to get from point a to b…if it takes 15 minutes to fill the truck and 45 minutes to transport the snow it’s gonna be a long night. It’s important to find a location in close proximity to the district, so that the least amount of time possible, is used to transport the snow.
  • Go big or not all…don’t make the mistake of underestimating the amount of snow that is actually on the street. A large loader is going to remove more snow in a shorter period of time than a Bobcat. In order to have the biggest impact possible for your stakeholders, consider using at least two large loaders and no less than four dump trucks.
  • Be ready to spend between $10K-$15k on an 8-10 hour session, overnight, on private snow removal services in order to have a sufficient impact on the district.
Hopefully the tips above will help you plan out the best possible snow removal program for your district!

Friday, February 28, 2014

Help 'em Yelp it! Six ways to help small business owners make the most of Yelp

According to a recent Fox Business news article small business fail to understand the importance of on-line reviews, and I might agree. But what can you, as a commercial district manager, do to help? (For a link to the article, click here: “Survey: Small Businesses Underestimating Online Reviews" )

What is “On-Line Optimization”?
This is a term we coined a few years ago while working with the New Rochelle Business Improvement District (see “Putting Your District’s Best Foot Forward” ). It simply refers to a process by which a 
Many small businesses use review sites like Yelp
and Foursquare as marketing tools.
Your business should be doing the same.
commercial district manager can actively help local businesses build a positive online presence that generates additional customers and sales. While Google is by far one of the most important search engines, Yelp is nearly as important for small businesses looking for exposure. With an average of 120 million MONTHLY unique visitors, and one of the most downloaded review apps in the nation, being on Yelp assures a business that they will be seen when someone is looking for a place to go, whether on their mobile phone or at their desktop.

But commercial district managers face some challenges in harnessing Yelp as a tool, in part because businesses need to claim ownership of their Yelp page to do basic things, like make sure the business profile is complete, including the name and category of business, detailed contact information, links to website and a menu (if a restaurant). In some communities, mom and pops don’t even have email addresses…so asking them to manage an on-line presence can be near impossible.

That said, many businesses owners do know the power of the internet, but just don’t know where to start. The good news is that you can do something to help them. Below are a few waysyou can play an effective role as an intermediary to help your local businesses use Yelp to attract customers. 

1. Make sure their business pages have great photos. This is really important. People REALLY like photos. In fact, research shows that people are more likely to visit a restaurant or store for the first time if they can check it out first. Consider hiring a professional photographer to take attractive pictures of your district and local businesses. If restaurants are included, be sure to take photos of a variety of dishes. Fortunately, anyone can upload photos to a business page so this is something that you do directly on behalf of your businesses.

2. Building awareness of a business’s Yelp page with check inserts, stickers and tent cards. Did you know that only 13% of businesses owners are approaching customers about posting reviews online? While Yelp actively discourages soliciting reviews and will downgrade reviews that they perceive as solicited, they do encourage businesses to let customers know they are on Yelp. Consider printing small index cards for your businesses that they can include with the bill that say something like, “Hey, check us out on Yelp!” with a link to the business listing. With this you are creating awareness that the business is listed, which in turn will help them get reviews.

You might also consider printing transparent stickers and giving them to local businesses who have a presence on Yelp. These “Find us on Yelp” stickers are different than the “People love us on Yelp” stickers (which are issued twice a year based on having a greater than 3.5 star rating from a certain number of reviews). You can also have table tent cards printed, this might be a better alternative for a business that wants to put this on their counter or by the register. “Find us on Yelp” signs and tent cards can be found on the Yelp Flicker stream

3. Making sure your restaurants have their menus on Yelp. Help your restaurants by making sure their menu and price list is displayed on the businesses page. Send a copy of your current menu directly to Yelp via their contact form. You could also consider having your photographer takes a picture of a menu page for you to post as an image.

4. Unfortunately, sometimes it just comes down to better management. Ultimately, reviews are a reflection of the level business goods and quality of service they provide. The reviews – both good and bad – offer important feedback that an owner ignores at their peril. Don’t let your business owners rationalize away negative reviews and low ratings. If they do, they are killing their own business. According to a study by Michale Luca, a professor at Harvard Business School, there is a correlation between high Yelp rankings and revenues. There is a 5-9% jump in revenues for every star in a review. Considered another way, every loss of a star means loss of revenue. So if worse comes to worse you'll need to do some direct business technical assistance. Which leads us to the next suggestion...

5. Hold a business seminar about managing on-line listings. Since most of what a business needs to do is manage their own page, consider inviting a specialist to offer a workshop to your business owners. A few things they should cover include:
  • How to “claim” your Yelp business page. It is free and allows the businesses to make sure their business information is up to date and allows them to add photos (which you can do too) and respond publically to reviews (although they should do this very cautiously as it can easily backfire if not handled correctly)
  • How to respond (or not) to negative reviews. 
  • An overview of the various business platforms that exist that allow business owners to manage multiple social media sites, including Locu by Go Daddy (Costs range from $4.49/month to $26.99/month) and Singleplatform by Constant (Pricing is $79/month). 
  • The impact of reviews on sales
6. And finally...measure the impact of your effort! Why? Because you are in the business of showing that an investment in your effort and the work of your organization is an investment in a business's bottom line. The straighter the line you can draw between your efforts and a business' sales, the better poised you will be to ask for and receive more resources that have an even greater impact. In this case, you will want to know whether your businesses are seeing an uptick in sales as a result of your efforts. You can do that by surveying them within a month of the effort taking off. And then an a bi-annual or annual basis thereafter. Another option is to ask them for their Yelp metrics. Every business that claims their Yelp page has the ability to track metrics, including the number of monthly visitors and user views to their page. See if participating businesses will share this information with you for your records. Better yet, require it as a condition for helping them.















5 Interactive Musical Installations


Public art installations are a great strategy for rejuvenating public spaces and connecting with the public in a fun way. There are different approaches a city can take to connect with its citizens, and one approach that has gained prominence in recent years is music. Here are five interactive public art installations that have flooded many ears with the sound of music. 

1) Play Me, I’m Yours
Play Me, I’m Yours began in 2008 when 15 pianos were installed across the city of Birmingham, UK for three weeks. Street pianos are designed to engage with the public by inviting anyone, experienced musician or novice, to try their hand at the piano. They also provide a rare opportunity for musicians to share their creativity by performing to the public. Since 2008, the project has toured internationally. In 2010, Play Me, I’m Yours appeared in New York City. The installation of 60 pianos across the five boroughs was spearheaded by the New York-based nonprofit arts group Sing for Hope.

2) Piano Stairs
In 2009, Volkswagen converted a set of stairs into black and white piano keys inside the Odenplan subway station in Stockholm, Sweden. The initiative is part of a marketing campaign called the Fun Theory, which is based on the idea that the easiest way to change people’s behavior is through fun.  The piano staircase in Stockholm quickly gained attention for its effectiveness, and has been replicated around the world, including in Auckland, Melbourne, Stockholm, Milan, Istanbul, and Colombia. 


3) 21 Swings
Each spring, 21 multicolored swings are placed throughout Montreal’s entertainment and cultural district, Quartier des Spectacles. Each seat is a musical instrument that plays prerecorded sounds while people swing. The more people that swing, the more melodies that form, turning the installation into a giant collective instrument where people achieve more when they work together. 


4) The Kendall Band
The Kendall Band is an installation in the Kendall Station, in Cambridge, Massachusetts, that consists of three interactive instruments. To play you need to pull one of the handles, located on either the inbound or outbound subway platform wall. The installation, created between 1986 and 1988, is part of the “Arts on the Line” program - the first program in the nation to incorporate art into public transportation systems.

Image via Cambridge Day
5) ‘Pulse of the City’
‘Pulse of the City’ is an innovative project located in Christopher Columbus Park, in Boston, which utilizes the concept of measuring people’s heart rates to create brief musical compositions. The installation is a solar-powered unit in the shape of a heart with handles on either side. The unit emits white light to attract passerby and creates the musical composition when someone holds the handlebars – a very distinct experience when compared to listening to your heartbeat through a series of beeps and lines on a chart. 
 


A new musical project has been proposed in New York City by musician James Murphy (former LCD Soundsystem frontman) to turn the beeping sound that occurs each time you swipe your MetroCard at a turnstile, into a pleasant note that harmonizes with other turnstiles. You can learn more about the project here, and if you like the idea, sign their petition to help make it happen!

Guest Blogger Maria Chernaya is an urban planner based in Brooklyn