Business Groups Fill The Breach
Improvement Districts Springing Up All Over

By Lyndsey Layton
Washington Post Staff Writer
Thursday, September 14, 2006

Owners of office buildings and shops around the District are increasingly taxing themselves to pay for street cleaning, security, public transportation and other services that were once strictly the responsibility of city government.

The city has six business improvement districts, or BIDS as they are commonly called, where commercial landowners have agreed to pay a special tax in exchange for the authority to decide how the money -- millions of dollars, in some cases -- is spent. Seven other districts are under consideration.

"It's happening very, very fast," said Steve Moore, president of the Washington, D.C. Economic Partnership, a nonprofit group set up by the city to help attract and retain businesses. "It's like a brushfire of neighborhoods getting a new sense of themselves. . . . All the BIDs want a kind of visibility, guys in uniforms out cleaning, greeting, talking. There's a civility about all of that. It's a calming and humanizing of the streets."

The proliferation of BIDs is seen by some as a failure of city government to provide good service for taxes already paid by residents and businesses. Some BIDs are considering imposing the special fees on condo owners as well.

The Downtown BID, the city's oldest and largest, was created in 1997 when the MCI Center opened at Gallery Place. Although it's thriving today, the neighborhood was forlorn at the time, and major property owners wanted a crew of visible workers on the streets to clean up trash and convey a sense of security to visitors, said Gerry Widdicombe, director of economic development for the Downtown BID.

It was followed by the Golden Triangle BID, in central downtown, and BIDs on Capitol Hill, in Georgetown, Mount Vernon Square and the newest in Adams Morgan. Seven other areas are considering forming BIDS -- the West End, the area north of Massachusetts Avenue known as NoMa, the Southeast waterfront, Dupont Circle, Columbia Heights, H Street Northeast and Anacostia

"At some point, it became clear the current BIDs were really successful and doing great work for their communities, and other commercial districts began jumping on bandwagon," said Barry Margeson of reStore DC, a city program that helps businesses navigate the legal and technical requirements to create improvement districts.

Increasingly, businesses in neighborhoods without BIDs are seen at a competitive disadvantage. "We've got the Golden Triangle below us, Adams Morgan above us and to one side will be the West End BID within two years," said Ed Grandis, a lawyer in Dupont Circle who is trying to organize a business improvement district in that neighborhood. "It's like these private public works departments are providing services that will make them more attractive and give them more foot traffic and maybe take traffic away from us."

The popularity of business improvement districts reflects poorly on the District government, Grandis said. "Wouldn't you think any city government should be making the city clean and safe?" he said. "Unfortunately, D.C. historically doesn't have that mind-set in delivering city services to businesses. We can keep complaining to the city to try to get more clean and safe programs in our neighborhood or we can be self-reliant, as others have done."

In Southeast near the construction site for the new ballpark, the biggest landowners are trying to organize a BID even before the neighborhood is developed.

"Now is actually a good time to do this," said Michael Stevens, the former head of the city's marketing agency who has been hired by several property owners to organize a new district around the Nationals stadium. "In 2008 when the stadium opens, we're going to have 41,000 visitors 81 times a year. This area is going to be an active construction zone for the next 10 years. We want a clean public realm, a safe public realm, a well-lit public realm."

Through BIDs, businesses can amplify their requests for better service from the city, Stevens said. "BIDs can be an advocate for better parking, for streetscape improvements, for getting the alleys paved," he said.

The popularity of BIDs here is part of a trend seen from London to Los Angeles, Moore said. New York City has more than 50 BIDs, dating to 1976 when private businesses stepped in to bolster deteriorating public services that resulted from New York's financial crisis.

District law requires that a majority of landowners within the boundaries of a proposed BID agree to the special taxes and sign a petition. The plan, which includes the boundaries for the special district, must also be approved by the D.C. Council and the mayor. Residential properties, churches and other nonprofit groups are usually exempt from the taxes. A BID is governed by a board of directors that includes property owners, and it must be renewed by a vote of the membership every five years.

The services provided by a BID vary in scale and sophistication. The Downtown BID, which collects $10 million in taxes from 535 properties spread across 138 blocks, employs cleaning crews, helps pay for new sidewalks, streetlights and signs, sponsors public cultural events, markets the neighborhood, helps businesses develop, provides services to the homeless and subsidizes the D.C. Circulator, the crosstown public bus service. The Adams Morgan BID, on the other hand, is collecting $300,000 annually primarily for street cleaning and security.

"In Adams Morgan, it's having cops there late at night because of the clubs," Widdicombe said. "In Georgetown, it's about buses to get people to Georgetown because of their ill-fated Metro decision [to refuse a light-rail station decades ago]. It's different things to different neighborhoods. It's democracy in action."

Some of the business improvement districts are talking about working cooperatively to share equipment, reduce costs and start services that would cross boundaries, such as WiFi networks. One example is the Circulator, whose costs are subsidized by four business improvement districts.

One district has expanded beyond commercial properties to include residences. The Mount Vernon Triangle Community Improvement District taxes condominiums as well as commercial properties because the emerging neighborhood is filled with residential towers that are either planned or have been recently completed. The district would not be feasible if it taxed only commercial buildings, said Widdicombe, who is also executive director of the nascent Mount Vernon group.

The Downtown BID is weighing whether to seek a legal change that would allow it to also tax some residential properties.

"When we started, there were no residential properties downtown," said Rich Bradley, executive director of the Downtown BID. "But now more residential properties are coming on line and we've got residential owners approaching us, asking us for the kinds of services we provide to the business community."

But residents are less likely than businesses to want to pay special taxes, Moore said. "People living in a neighborhood say, more than businesses, 'Wait a second, I paid for that already,' " he said, referring to local taxes paid by city residents. "Anyone trying to expand BIDs who are looking to include condos and residential buildings, they have a lot of work to do."