selling the neighborhood
to the highest bid-der

"The power to tax is the power to destroy." Or improve, so say the 37 Business Improvement Districts operating around New York City. In recent years, the explosive growth of BIDs has alternately impressed and scared those interested in how cities provide for its residents. Like the proverbial golden child, BIDs can be very, very good, harnessing the financial strength of thousands of commercial property owners to clean the environment, promote business, as well as guard the city streets. Yet, BIDs can also be very bad -- beating up the homeless, accepting bribes and kickbacks, spending lots on administration and little on service. Well-run BIDs are considered essential parts of a successful neighborhood community. Their role is to add to the services the city provides. The question is whether BIDs should be responsible for the city's problems as well.

The process in setting up a BID is long and labor intensive. Borders must be defined for the district and consensus reached among the business interests within them. The City Council's report lists twelve different agencies that must review a BID plan across borough, city and state levels. Numerous public review periods allow for changes and objections to the BID plan. One observer describes the process as a "gauntlet," taking up to eighteen months to complete. The tortured process works to ensure accountability of BIDs. Public review is difficult because BIDs are private, non-profit corporations, governed by an elected board with limited community representation. BIDs also tend to represent the interests of those who contribute, primarily the property owners and commercial tenants who stand to financially benefit from a BID program. As another observer noted, "those who pay for it, should get what they pay for."

When compared to city government, BIDs have an easier time deciding what to do and how to do it. Clean and safe streets are relatively easy tasks -- just pick up the garbage and send out more security guards. BID members also tend to be like-minded individuals bound together by a clear common interest -- the neighborhood's commercial and economic health. Consensus, in this context, is easy. In the rest of the city, however, it's not. The problems of homelessness, social welfare and education have few clear answers and require services far more complex than what BIDs can provide.

It's this criticism that BIDs say is unfair. Their role is to supplement city services, not replace them. They point to the restoration of Bryant Park, Times Square and 14th Street as proof of a BID's effectiveness and strength. They avoid the bureaucratic hassles typical of government services and devise flexible and innovative programs that are more responsive to a community's needs. BIDs truly believe they can be an effective tool for the economic revitalization of local communities. They can't be the only tool, however. BIDs cannot by themselves solve all the problems of an urban neighborhood. Perhaps the answer is not that BIDs are more effective, but that urban governments have abdicated their role in providing adequate services. Pressured on one end by decreased tax revenues and the growing need for social services on the other, cities have no other choice but to scale back what was once their responsibility to provide. It's only natural, then, that BIDs fill the vacuum cities have left.

So, why not just let BIDs stick to their own neighborhoods and do what they do best? It all revolves around equity. First, why should certain BIDs reap huge rewards because of their location and size while others go hungry? A grant of $100,000 to the Pitkin Avenue BID in Brooklyn would nearly double its budget. The same grant amounts to less than one percent of the Grand Central Partnership's budget. The needs of business in Brooklyn are just as important as those in Manhattan. Second, will city services remain so inefficiently delivered that BIDs will be needed five, ten, even twenty years from now? If more BIDs issue bonds, they may be with us for much longer. It would be better to reform the root causes of the problem, than continue to tax businesses twice. Finally, as the number and influence of BIDs grow, how will policy-makers make sure these districts are not favored over other parts of the city. Strong neighborhoods have always been New York's strength, but when one neighborhood is troubled, it's difficult to keep the problems from spreading. BIDs have great power to improve a neighborhood's surroundings. The biggest danger for the city, however, is if these islands of fortune are all that remain in a growing tide of despair.

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december 1999