Last week, on a bitterly cold Northampton evening, a crowd of cashmere-, camel hair- and eiderdown-clad individuals filed into the brightly lit Puchalski Municipal Building tucked behind the spare and classical Unitarian church. The Johnson-era edifice provided snug shelter for what was to become a scorching public hearing, held before the City Council, to a standing-room-only crowd. The issue? A petition to establish a Business Improvement District (BID) within the downtown area, which requires City Council approval in order to move forward.
As the hearing progressed, downtown business owners, lawyers, good-government watchdogs and civil libertarians stepped to the podium one by one to present prepared arguments to the Council. Planning consultant John Mullin sat quietly in the audience, wedged into an uncomfortable chair, as did city economic development officer Teri Anderson. City planning director Wayne Feiden unobtrusively positioned himself at the back of the crowd, as did BID attorney Bruce Fogel and Chamber of Commerce Director Suzanne Beck.
Eric Suher, the downtown district's largest private property owner, stood at the ready to voice opposition, as did ACLU lawyer Bill Newman and attorney and downtown resident Alan Scheinman. Former Iron Horse owner Jordi Herold stopped in to observe, as did restauranteur Claudio Guerra; a veritable who's who of the city's real estate, restaurant, legal, and entertainment luminaries were in attendance.
BIDs are designed to fund, through a special assessment on property owners, services to downtown districts that city government does not. These services, as described by BID proponents, include marketing the area, financing public improvements, providing extra maintenance and security services, organizing special events, and providing amenities such as holiday lighting. The primary goal of the BID is economic development—to promote a downtown that can effectively compete with the malls and with online retailers.
Massachusetts communities are authorized to establish BIDs under state enabling legislation known as chapter 40.O. A BID must be a contiguous geographic area in which at least 75 percent of the land is zoned or used for commercial, retail, industrial, or mixed purposes, and is established through a local petition and public hearing process. The petition must be signed by the owners of at least 60 percent of the real property—and at least 51 percent of the assessed valuation of the real property—within the proposed BID. The petition must also include delineation of the BID boundaries, a proposed improvement plan, a budget and an assessment/fee structure. Once that structure is set, the city can enforce collection by putting liens on business property.
The BID enters into a legally binding memorandum of understanding (MOU) with city government in which respective rights and responsibilities are detailed. The BID has the power to sue (and be sued), to incur indebtedness, to enter into contracts, to acquire real property, to design, engineer and construct urban streetscapes, to manage parking, and to "administer and manage central and neighborhood business districts." BIDs are governed by a private board of directors who are not accountable to the public at large and are only minimally accountable to city government.
Proponents contend that a BID is necessary to put a shine on downtown Northampton's scuffed economy. "Downtown Northampton is fundamentally sound," the BID management plan states, but there is "a general sense that the strong underpinnings of Northampton have begun to erode" and that a "bold approach" is necessary. The BID plan cites an increase in panhandlers, vacant storefronts, a lack of maintenance, "the struggles of the Academy of Music" and a "decline in retail and restaurant market share."
The BID is described as a "sustainable solution" which provides consistent revenue to fund supplementary services to the downtown, is supported by a stable management structure, and is energized by the spirit of voluntarism and self-help. Proponents argue that the dedicated, legally enforceable revenue stream will allow for reasonable planning from year to year, and that the management structure of the BID will provide a vehicle for implementing a consistent long-term vision for the beautification, improvement, and professional branding and marketing of downtown Northampton.
Dan Yacuzzo owned the Eastside Grill, a busy Pearl Street restaurant. He is the chairperson of the BID committee. "Northampton used to be a brighter destination," he opined at Thursday's hearing. "We can't allow conditions to slide any further… If you take money that you were spending individually and spend it collectively, you can get more bang for the buck."
Retailer Judith Fine also expressed strong support. "BIDs succesfully exist all over the world," she proclaimed. "Why shouldn't our own little corner of the world of Northampton have a BID? The amazing accomplishments that will be brought to fruition by a BID are very exciting: flowers, clean streets, holiday lights, street lights, marketing the area, removing tape and grafitti, public safety, and enhancing the vitality and well-being of our little gem and corner of the world… I implore the City Council to vote yes on the BID!"
Attorney Bill Newman, director of the western office of the Massachusetts American Civil Liberties Union, did not oppose the BID outright, but warned of constitutional issues if the BID proposal remained "intertwined with" and "supportive of" the panhandling ordinance currently before the Council's public safety committee. Newman has submitted a letter to councilor Bob Reckman concerning potential legal problems with the language of that ordinance, and noted that he has received no formal statement of disagreement from any city official. Newman recommended that the city of Northampton not put itself in the position of challenging constitutional law, and reminded the group that there are ordinances on the books that, if enforced, could address the issues of aggressive or threatening actions by panhandlers, public drunkenness, and a host of other behaviors.
"No one defends criminal behavior," said Newman. He recommended that two steps be taken: that the panhandling ordinance be defeated, and that the BID proposal be rejected out of hand and rewritten to "de-link" it from the solicitation ordinance.
"Once (the BID) is enacted, as a practical matter it is written in stone, and is very difficult to amend or dissolve. The BID language should be amended or changed before it is adopted… You don't have to rush into this…," Newman cautioned.
"I reject the idea, as proposed by the Gazette, that we can try it for a year and see how it goes, with a sunset provision of some sort," Newman added. "It's not OK to suspend constitutional rights for a year or six months or six days. It's not OK to say the courts will figure it out… The city shouldn't go spending $50,000 or $100,000 dollars to have the courts figure it out. To take on the Supreme Judicial Court and say they were wrong in the Benefit case is something I would say the city shouldn't do." (Benefit v. City of Cambridge, 1997, held that solicitation and peaceful begging are protected by the First Amendment.)
Almost two hours into the hearing, reclusive real estate investor (and owner of the Iron Horse Entertainment Group) Eric Suher took the floor for a solid 12 minutes. Suher explained that he did not oppose the BID in concept, but took issue with its "inequitable fee structure," which does not require Smith College to pay as a condition of its membership. He noted that once a property owner signs on to the BID, it is impossible to opt out of the contract after a period of 30 days unless the BID is dissolved.
"I have approximately 20 buildings located within the BID," he explained. "At last look I paid over $230,000 in taxes, and with this BID situation, my bill will go up 43.6 percent, which in layman's terms would add $89,000 to my present tax burden… I would have to pass that on to my tenants… I would be very happy to support the BID if I felt that the fee structure were fair and equitable. … When the majority of the BID's assessed value is from non-profit institutions, and Smith is not being required to pay, that is something I cannot support.
"Almost half of the BID budget is going to be spent for administrative services and marketing… As a business person running the Iron Horse Entertainment Group—that's the Iron Horse, the Calvin, Pearl Street, the Basement—I must say that we bring in more people singlehandedly than all of the shops and restaurants combined when we do our shows. We spend hundreds of thousands of dollars on marketing as it is. I don't want to spend any more money on marketing… I can run a zip code query on my database and tell you where people are coming from when they visit Northampton. You don't need a $35,000 marketing study to find this out. Contributions for marketing should be voluntary."
Suher questioned why Smith College is being included in the BID, echoing attorney Alan Scheinman's assertion that the BID map boundaries were gerrymandered to ensure that the BID petition requirements would be met. "The majority of the BID is not-for-profit, with Smith College not being required to pay the full half-of-one-percent of assessed value… If Smith were to be assessed a fair and equitable share, we could go in at .25 percent and I would be an enthusiatic supporter of the BID."
Suher also expressed strong support for Newman's point of view on the inadvisability of the BID's voicing support for any anti-solicitation ordinance.
A report developed by Cornell University in 2002 noted that although business improvement districts can accomplish worthy aims, there are potential costs. If a BID is successful in cleaning an area of "undesirable" groups and activities, then these problems are sometimes displaced to neighboring areas outside the BID boundaries. BIDs may encourage a model "where services are provided based upon an area's ability to pay." Critics contend that BIDs privatize public space by "excluding those that detract from the commercial goals of the BID members."
Concerns have been raised about the democratic accountability of BID governance. BIDs, governed by private boards of directors, need not comply with open meeting laws or other public "sunshine" provisions that encourage citizen participation and institutional transparency. BIDs are granted broad powers, and as such "may co-opt local government authority."
The report notes that BIDs are notoriously difficult to dissolve once they are put in place. "Sunset clauses" have proven ineffective for a handful of reasons—one being that a BID with outstanding debt must stay intact unless special provisions are negotiated. The Cornell report notes that the "burden of responsibility for preventing the formation of a BID falls on the objectors rather than its supporters," and that dissolution calls for a similar petition process to that which established the BID in the first place. If BID members become disenchanted, they are still mandated to pay assessments.
Several high-profile problems with BIDs have made the national news. New York's Grand Central Partnership (GCP)—perhaps the most egregious example—was accused in 1995 of using "goon squads" of untrained, formerly homeless men to forcibly remove homeless individuals from the BID. It was revealed that these workers were being paid only $1.15 an hour for their services. Further investigation by the city of New York found "persistent noncompliance with municipal directives" within the management agency that had the contract to mange the BID.
The city of Northampton has negotiated a memorandum of understanding (MOU) with the Northampton Business Improvement District, Inc., that will become legally binding if the BID is passed. (The city, like Smith College, will be a BID member but is exempt from the fees assessed to private property owners.) The city, in the MOU, commits to maintaining its current level of baseline services to the BID. It also commits to a smorgasbord of cash and in-kind support for the BID: the city will fund the BID at $35,000 annually; will purchase, maintain, fuel, and store equipment (including a pricey "Tennant" sidewalk sweeper); will commit $50,000 annually to the Academy of Music; will provide free billing and collection services; will pick up the tab for trash disposal; will commit to implement a host of capital improvements; and more.
Northampton taxpayers will then be providing significant support for the Northampton BID. Will its governing board of directors be accountable to the entire community?
I asked Northampton Planning Director Wayne Feiden for his perspective on issues of democratic accountability within the BID. He responded to my email request right away:
"A Business Improvement District is, in essence, a collective purchasing agreement," Feiden wrote. "Property owners petition to create a BID, they have an opportunity when the BID is first created to opt out, and otherwise they join to make these collective purchases. If property owners voluntarily decide not to opt out of the BID and to pay the resulting fees, it is not inappropriate that those property owners collectively decide how their funds get spent.
"We have many precedents for this in the city, and probably every community in the country, already. The majority of subdivisions created in the last 20 or 30 years include a homeowners' association. The homeowners' association includes mandatory dues and those dues are used to fund certain improvements (the equivalent of snow clearance downtown). If the homeowners' association decides to also include in their dues a big holiday party, they have the right to do so. We don't expect the public participation outside of the subdivision to make the decisions about how the homeowners spend their monies, even though the dues are mandatory."
But is a community's downtown analogous to a subdivision? The streets and sidewalks of the central business district belong to everyone. Urban sociologist Ray Oldenburg writes that the downtown, with its bars, coffee shops and public spaces, constitutes an important "third place," different from the first and second places of home and work. These third places are central to the health of local democracy and community.
BID proponents point out that a vibrant economy is vital in maintaining the public downtown spaces that foster community and democracy. Nobody wants to spend time in a downtown that is failing. But is the BID proposal, in its current incarnation, the best vehicle for supporting both commerce and the democratic values that have long been the hallmark of the downtown Northampton community?
The public hearing before the City Council on the BID has not been closed and will continue on Thursday evening, February 19th, at 7 p.m. After the hearing is officially closed, the Council must vote the BID petition up or down within 45 days. "The City Council is very much interested in hearing from the public on this topic," Council member Bob Reckman told the Advocate. "We encourage people who have something to say to either attend the hearing or contact us individually."
