2012 IDA Conference & Trade Show Trends and Hot Topics:

How Cities Encourage BIDs: Trends and Challenges

Saturday, September 22, 2012 10:30am – 12:00pm

PanelistsMiranda Paster, Senior Management AnalystCity Clerk, City of Los Angeles

Elizabeth De Leon, Esq., Deputy CommissionerNeighborhood Development Division, City of New York

James Mettham, Executive Director BID Program Management, NYC Department of Small Business Services

Gina M. Caruso, AICP, Assistant CommissionerEconomic Development Bureau, Department of Housing and Economic

Development, City of Chicago

Annie Coakley, Assistant to the CommissionerEconomic Development Bureau, Department of Housing and Economic

Development, City of Chicago

Adjunct Panelist: Emily Yen, Doctoral Candidate, Department of Sociology, UCLA

Rena Leddy, Vice PresidentProgressive Urban Management Associates (PUMA)

Moderator

SSA #49 South Shore &SSA Stats

44 active SSAs; 54 created since 1977

City contracts with 35 non-profits

300 Appointed SSA Commissioners

2012 Budgets = $25 million

2012 SSA Budgets by Category (44 SSAs)Total Budgets: $25 million

$2.8m (12%) Ads/Promos

$5.9m (25%) Maintenance

$4.6m (20%) Aesthetics

$548k (2%) Business Attraction

$836k (4%) Façade Programs

$940k (4%) Parking/Transit

$2.9m (13%) Security

$960k (5%) District Planning

$2.1m (9%) Admin

$1.5m (6%) Loss Collection

$194k (1%) Other

Top 3 Programs

Maintenance (25%) • Aesthetics (20%) • Safety (13%)

Mayor Bloomberg recognized the impact BIDs have on the economic development of New York City and created a 5-point plan to re-energize the BID Program:

1. Simplify formation and expansion procedures and create one-stop, user-friendly BID Formation guide

2. Allow BIDs to increase budgets and boundaries

3. Streamline the assessment collection and distribution process

4. Provide grants to spearhead formation targeting neighborhoods outside Manhattan

5. Allow issuance of long-term debt

“In these tough times, we must strengthen business improvement districts and local economic development corporations throughout the City.”

- Mayor Michael Bloomberg 2002 State of the City Address

The Bloomberg Administration and BIDs

Under $250K180th StreetEast BrooklynBayside VillageNorth FlatbushWhite Plains RoadForest Avenue165th StreetMontague StreetGrand StreetGraham AvenueSouthern BoulevardJerome Gun Hill86th Street Bay RidgeSutphin BoulevardFlatbush-NostrandWoodhavenBrighton Beach161st StreetPitkin Avenue82nd StreetColumbus-AmsterdamAtlantic Avenue

$250K - $500K

Church Avenue

Kings Highway

FAB Alliance

Queens Plaza (LIC)

Sunnyside

Park Slope

Kingsbridge

Flatbush Avenue

Myrtle Avenue (BK)

Bay Ridge 5th Avenue

Myrtle Avenue (QN)

Belmont

HUB/Third Avenue

Steinway Street

Flushing

NoHo

Westchester Square

$500K - $1M

DUMBO

Washington Heights

Sunset Park

Fordham Road

Bed-Stuy

Columbus Avenue

Court-Livingston

West 47th Street

Jamaica Center

125th Street

$1M - $5M

Lower East Side

Village Alliance

Chinatown

Fulton Street Mall

Hudson Square

Madison Avenue

Union Square

Flatiron/ 23rd Street

Lincoln Square

East Midtown

Fifth Avenue

Metrotech

Above $5M

Fashion Center

Bryant Park

34th Street Partnership

Grand Central

Times Square Alliance

Alliance Downtown

Business Improvement Districts in New York City

Under Mayor Bloomberg, 23 new BIDs have been created, 20 of which are in boroughs outside of Manhattan. 39 BIDs have budgets under $500,000.

BID created before Bloombergadministration (44) BID created under Bloomberg administration (23)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

General & Administrative Sanitation SecurityMarketing & Promotion Streetscape Maintenance & Repair Capital ImprovementsBeautification/Horticulture Other

BID SPENDING

45%

15%

General & Administrative

FY 2010 BID EXPENDITURES

BID Spending by Budget Size

Although BIDs vary greatly in size, they provide comparable services and pay for an executive director and office space.

Smaller BIDs pay a much higher percentage to administrative costs and much lower to service delivery.

Administrative costs are a high hurdle for smaller commercial corridors to overcome.

Creation Trends: View & Political

Research: surprising role of civic pride/ engagement coupled with long-term financial interests

BID Creation Trends Lessons Learned BID Creation Trends Lessons Learned BID Creation Trends Lessons Learned• use BIDs as economic development tool

• increased BID interest, but no new property- or merchant-based BIDS

• political term limits = more desire to satisfy constituents

• more residential = more protests, lawsuits

• new Mayor and new Council members in 2013

• need value-added for residents

• need for proactive troubleshooting with elected officials to address protesting residents

• remains to be seen how new Mayor will impact the BID program

• use BIDs almost exclusively as an economic development tool

• more SSAs initiated by aldermen

• more opposition and lawsuits

• driven to provide basic services; tension between replacing rather than supplementing City services

• new Mayor as of 2011

• regardless of political landscape, taxpayer support is needed

• need for clearer and more robust policies/procedures

• need for clarifying how SSA program aligns with and can inform Mayor's agenda

• use BIDs as an economic development tool

• “Great Recession” = “BID Formation Recession”

• driven by non-traditional clean/safe motives

• barriers to entry for smaller, outer-borough districts

• stronger opposition from larger groups

• new Mayor as of 2013

• 5-point plan to re-energize BIDs

• more proactive communication/ outreach to stakeholders

• listen to opposition, gather intelligence to combat negative messaging with positive

• flexibility and collaboration to help existing and new BIDs shape their economic development roles

Los Angeles Chicago New York City

Creation Trends: Financial

BID Creation Trends Lessons Learned BID Creation Trends Lessons Learned BID Creation Trends Lessons Learned• decrease in City financial assistance for BID creation due to budget cuts

• economies of scale with BIDs coordinating their services to reduce cost

• review laws and residential assessments more carefully before adding/increasing BIDs

• no City financial assistance for SSA creation; none anticipated

• SSA/TIF overlay getting more attention due to TIF expirations and TIF Statute authority to spend SSA funds in TIF

• not providing financial assistance puts responsibility on stakeholders for the SSA's success

• policies on resource allocation (SSA and TIF) build confidence and transparency

• importance on non-profits (both in making or breaking) the SSA

• no City financial assistance for BID creation

• streamlined creation process for smaller BIDs

• spark interest in BID formation: BID Express and BID Challenge

• importance of non-profits who do community organizing

Los Angeles Chicago New York City

Creation Trends: Legal

BID Creation Trends Lessons Learned BID Creation Trends Lessons Learned• Personal Property court decision: BIDs can't discard personal property in the public way; lawsuits against LAPD

• Trip & Fall Lawsuit

• special benefit of publicly owned parcels and weight on petition process

• Occupy LA right to assembly - visual presence around commercial and govt. buildings

• revitalization efforts won't work if community fights them; seeing more BIDs working together to resolve issues

• even more public/private partnerships e.g. BIDs opening warehouses for homeless population's belonging

• lobbying for increased public process for budget approvals in state statute

• literal interpretation of laws

• seek express authority rather than the law's silence

• remind SSA provider agencies they are responsible for understanding the law

Los Angeles Chicago

Creation Trends: Unique

Emily Yen's Research

BID Creation Trends Lessons Learned BID Creation Trends Lessons Learned BID Creation Trends• CRA (Community Redevelopment Agencies) dissolved; BIDs in CRA areas may not renew

• CRA tried using BIDs as economic development tool - doesn't work without property owner support

• Affordable and efficient delivery of sanitation services (BID Express cost sharing system)

• realized overwhelming interest in more flexibility in BID creation

Small BIDs have unique challenges that may question their value-added:• high admin costs relative to program costs can question • limited abilities to recruit and sustain qualified staff

Small BIDs also have benefits:• strong relationships with stakeholders• robust cost-sharing programs with other BIDs to keep costs down

New York CityLos Angeles

Government vs BID Roles

Govt vs BID Roles Lessons Learned Govt vs BID Roles Lessons Learned Govt vs BID Roles Lessons Learned• BIDs administered by City Clerk's Office ("objective observer")

• CC instructed to sign affirmative petitions for City assessments

• CC encourages BID proponents to meet/ learn from successful BIDs

• March 2013: election for Mayor, City Attorney, Controller and half of the Council

• CC seeking Mayor's help to encourage City depts to work cooperatively with BIDs

• possible creation of a new dept. to coordinate scattered Economic Development activities

• need for robust training of new elected officials and relationship building by BIDs

• emphasis on more robust partnering with City departments to cover gaps, avoid duplication and ensure proper service/capital scopes

• emphasis on taxpayer championing of SSAs, government in role of monitor, trainer, enforcer and policy/procedures creator (“smaller government”)

• generating SSA funding stream for government’s SSA administration rather than general corporate funds (“bigger government”)

• need to be clearer on line between government vs SSA services

• govt to stay out of "micro-managing" role or arbiter

• new Mayor as of 2011 after 22 yr tenure of previous Mayor prompted a diagnostic of the SSA program

• incentivize BID innovation and transformative programs/ services (e.g. BID Challenge)

• encourage/ facilitate public-private partnerships

• new Mayor and leadership in 2013 means starting/ completing initiatives under current administration

• incentives result in performance excellence and more satisfied stakeholders

• importance of cultivating neighborhood leaders (Coro Neighborhood Leadership Program) to continue work and partnerships beyond current administration

Los Angeles Chicago New York City

Optimal Government & Taxpayer Roles for BID Oversight

Optimal Govt/Taxpayer BID Oversight Lessons Learned

Optimal Govt/Taxpayer BID Oversight Lessons Learned

Optimal Govt/Taxpayer BID Oversight Lessons Learned

• City contracted BID invoices City Clerk for funds - motivates timely/ accurate reporting

• best practices sharing with BID staff, including conference take-away's

• encourage BIDs to lobby Council members

• LA BID Consortium collaboration to lobby and resolve concerns

• training on new laws/ regulations (Brown Act)

• invoicing process is successful

• government best positioned to encourage dialogue and best practices sharing between BIDs and to provide training on new laws/ regulations

• taxpayers best positioned to determine BID performance

• utilize right amount of transparency for both taxpayer engagement and accountability of the BID leadership/ administrator

• right amount of legal framework supplemented with policies and best practices

• Balance of consistency with what to expect from a BID with uniqueness of each BID

• get ahead of FOIA requests and provide as much information as possible

• just providing information is not enough - must make it understandable

• strive to balance BID autonomy with necessary govt oversight and citywide transparency in procedures

• collect/ share information and best practices

• carefully select BID indicators/ impacts

• data/information needs organization - create centralized forums (e.g. Small Business Services and BID Management Assn)

• leverage the BID indicators/ impacts that demonstrate BID effectiveness and competitiveness

Los Angeles Chicago New York City

Recap and Forecast Navigate BID use as an economic development tool in larger

context of place-making and civic pride mitigate resident stakeholder lawsuits with focus on enhancing place

as well as economy (encourage “land use blindness”)

Reduce barriers to creating BIDs, but expect more accountability by stakeholders

Recap and Forecast Government can/should:

first cultivate excellence and innovation breed consistency rely on laws and cultivate strong partnerships

Stakeholders can/should: know and respond to their needs establish expectations and assessment set value and willingness to pay

Recap and Forecast Need for smarter collaborations and partnerships

inter-department, inter-governmental, and public/private partnerships BID collaborations, BID Consortiums

Need for enhanced localized and industry-wide best practices builds predictability locally, nationally and internationally more affordable oversight with “off the shelf” policies/procedures and

assessment tools

Thank YouQ & A