Business Improvement Districts are a powerful economic development tool. In 2009, a study by Econsult funded by LISC and the William Penn Foundation, considered a variety of interventions and their impact on the City of Philadelphia's commercial corridors. The findings were unequivocal, the “introduction of Business/Neighborhood Improvement Districts…demonstrate a statistically significant, positive relationship with the indicators of corridor performance”. Impact was measured by retail sales, retail sales same store growth, shopping trips and real estate values – measurements most would accept as fair barometers of a district’s economic well being.
Yet despite this powerful evidence (which quite frankly many do not know about) detractors of individual BID efforts continue to successfully make their case, sometimes in court. Consider these examples:
- In Los Angeles, the Downtown Arts District was dissolved after a judge ruled on behalf of a small group of BID members who made the case that BID funds used for economic development of the district benefited the general public and therefore did not constitute “special benefits” for BID members. This apparent breach in state law was deemed sufficient to dissolve the BID.
- In Northhampton, Massachusetts, a group of property owners filed a federal lawsuit against the state, contending that mandatory BID fees are unconstitutional and an illegal tax.
- In Ashville, North Carolina, the committee spearheading a multi-year effor to form a downtown BID recently decided to go dormant after critics argued that the assessment was unnecessary in light of recent municipal tax increases.
The concerns range from lack of transparency, lack of clear demonstrated impact, to a common and perhaps universal desire to avoid paying anything at all (see “tragedy of the commons”). The public realm, which is what is typically improved through BID services, is a common resource. While individual property owners benefit by keeping a little extra money in their pocket when they oppose a BID, the damage to the downtown environment is shared by all. After the dissolution of the LA Arts District BID for instance, there was a dramatic increase in violent and property crime and the number of reported incidents jumped from 45 to 59, a 31% spike. Grand theft auto increased from three to eight reported incidents, a 166% increase, and thefts doubled from eight to 16.
This is a call to action. I would love to see the industry develop a strong response to this growing backlash, starting at the very least with the following:
PROFESSIONAL CERTIFICATION: Industry-accepted professional certification and training to ensure that those running BIDs are qualified and have the skills and knowledge base necessary to do their jobs well. There are some certification programs out there (i.e. Seth Grossman's efforts at Rutgers come to mind, as well as the City of New York's Coro Neighborhood Leadership Program which I helped develop.)
BID ACCREDITATION: We need clear standards and quality management, at the national level, for the BID industry. In England, the British BID council has developed an accreditation system. They actually go out into the field and audit a BIDs management and supervisory systems. This level of oversight offers BID stakeholders important assurances that the BID is well run and having an impact on the district.
INDUSTRY RESEARCH. We desperately need better research on the impact of BIDs at the national level that would allow us all to be better advocates.
The real question here is where is the national leadership on this issue? I would love to see the national organizations, like the International Downtown Association (IDA) or the International Economic Development Council (IEDC) or even the American Planning Association (APA) begin thinking along these lines. We really can't afford to ignore the backlash brewing in our midst for too much longer.