The decision rankled some members in light of the BID’s staff expansion to 15 full-time employees from 12 since 2015, plus additional contractors, and complaints that its cost outweighs its benefits. A petition on change.org calling for a reduction of the BID surtax drew 226 signatures.
“During the pandemic, there’s a lot of businesses that were closed and lost millions of dollars,” said Nayan Patel, managing partner of the Georgetown Inn. “The BID basically collected every cent they could and, to the best of my knowledge, kept everyone they could keep. Basically, they were telling businesses to take it on the chin.”
Criticism of Georgetown’s BID has intensified as other business improvement districts in Adams Morgan and downtown have come under scrutiny. The DowntownDC BID, the city’s oldest and most richly endowed, has opened an internal review into allegations that Neil O. Albert, its president and chief executive, approved BID contracts involving his girlfriend’s firm. On Tuesday, the BID placed Albert on paid administrative leave, BID spokeswoman Ann Marchant said. The U.S. attorney’s office opened an investigation into similar allegations involving Albert’s tenure as chairman of the D.C. Housing Authority.
Gregory A. O’Dell, DowntownDC’s board chair and head of Events DC, confirmed the internal investigation but declined to comment further. Albert did not return calls seeking comment.
Meanwhile, Adams Morgan’s BID abated six months of its taxes due in September 2020 because of the pandemic but failed to quiet critics. Earlier this year, those critics unsuccessfully pushed D.C. officials to dissolve the Adams Morgan Partnership BID, arguing that the organization has been governed for the benefit of a few.
Supporters of Georgetown’s BID say the organization has been beneficial to businesses in the community. Without the BID, Georgetown’s economy would not have weathered the pandemic or held its own against rising competition from the Wharf and other city neighborhoods, said Bruce Baschuk, founder of real estate firm J Street Companies.
“We pulled the community together,” said Baschuk, who has chaired the BID’s board since 2015. “We have now surpassed the foot traffic we had two years ago.”
But both supporters and critics of Georgetown’s BID said the organization could be more transparent about its governance.
At its November board meeting, leadership warned that the “BID brand may be tarnished” by the recent controversies, an agenda item says. It also noted that Georgetown BID staff had begun an internal review of procurements to ensure compliance with conflict-of-interest policies.
BIDs can be established when a majority of commercial properties and tenants in a neighborhood agree to pay additional property taxes for supplemental services, such as trash removal. Once approved, BIDs are overseen by private nonprofit corporations that operate independently of government, though they often collaborate with city agencies. They became popular at a time when D.C. and other cities struggled to provide basic services.
Yet BIDs generally receive less oversight. The District’s Department of Small and Local Business Development (DSLBD) registers new BIDs and reviews their certification every five years, but otherwise its role is limited. The attorney general has the authority to ensure that all D.C.-chartered nonprofits comply with laws governing tax-exempt organizations. Federal tax law requires nonprofit organizations to disclose certain financial data, but the Freedom of Information Act generally doesn’t apply to nonprofit groups.
“If you take all the BIDs throughout DC and you add that up … there’s quite a bit of money and there’s no oversight,” said Billy Martin, owner of Martin’s Tavern and a member of the Georgetown BID’s board.
The Georgetown BID operates with more than $5.2 million in annual revenue, according to its 2020 annual report. It employs 15 people, including longtime BID president and chief executive Joseph Sternlieb, whose salary topped $245,000, according to its publicly filed fiscal 2018 tax return. In addition to expanding staff, the BID also increased cleaning crews’ salaries to a living wage, according to its 2020-24 Five-Year Renewal Plan. Salaries accounted for about $1.5 million a year in fiscal 2019, or about 29 percent of its budget.
The BID has not changed its tax rate —15.45 cents per $100 of assessed value — since 2007, though rising property values mean the effective tax burden has grown. The BID’s five-year plan, submitted as part of the recertification process, says the board may increase the tax rate if revenue isn’t sufficient to meet the plan’s goals.
“I think for what we’re paying, we should be getting more,” said Patel, a former chairman of Best Western International’s board who recently joined the BID’s governing body.
Georgetown’s BID also angered some members with its recent push to widen the commercial district’s sidewalks, a long-debated move that took on urgency during the pandemic as bars and restaurants turned to curbside service to survive. Many welcomed eateries and wider sidewalks as a way of luring more foot traffic to Georgetown, while others complained about the loss of parking, which is already in short supply.
The BID could have done better at soliciting opinions and building consensus, critics and supporters said.
“They do what they have to do, and we find out at the end,” said Parvis Mizrahi, owner of the Prince & Princess merchandise shop and its building.
But Anthony Lanier, who founded the real estate development firm EastBanc and served as a BID board member since its creation in 1999, said the organization works hard to build consensus through surveys and other outreach.
“The idea that this is not a democratically run organization is just sour grapes,” Lanier said. “It is overly democratic to a fault.”
There have been public clashes between leadership and members of the BID that have led to formal complaints and allegations of retaliation against its critics.
Hope Solomon, whose family owns the formal wear shop Wedding Creations and Anthony’s Tuxedos, said that after she questioned BID spending priorities during the business’ 2019 recertification process, the BID’s leadership forced her father, Ed Solomon, to step down from the executive committee.
Solomon later left the board altogether. He also clashed with leadership over whether the executive committee’s meetings were open to all BID members. The bylaws were later amended to clarify that board meetings are open to BID members, but those of its seven-member executive committee are not.
Stephen M. Kohn, an attorney specializing in whistleblower cases, filed a complaint with the D.C. Attorney General Karl A. Racine. There was no resolution to the complaint. A spokesman for Racine declined to comment.
Sternlieb said in an email that the complaint lacked merit. In a lengthy interview, Sternlieb — who has previously served as deputy director of the DowntownDC BID and staff director for the D.C. Council’s Economic Development Committee — defended the Georgetown BID’s work, its transparency and its response to the pandemic.
“We did an extensive process with our board to develop a set of covid mitigation measures,” Sternlieb said, including $160,000 in small grants to displaced employees and setting up technical assistance for small businesses applying for financial aid. After a lengthy debate, he said, the board voted against reducing the BID tax.
“The board was very adamant that the work they thought we were doing — and that we were doing — was so important that we needed the money,” Sternlieb said.
Those duties include almost daily upkeep of Georgetown’s venerable brick sidewalks, working with the National Park Service to restore the C&O Canal, hosting Taste of Georgetown and staging Georgetown GLOW, an outdoor installation of illuminated sculptures. In addition to marketing and promotion, the BID oversees extra street cleaning, funds efforts to alleviate homelessness and coordinates with police to reduce crime, including hiring off-duty officers.
Sternlieb, who helped write the city’s BID law, said BID leadership welcomes constructive criticism, often recruiting dissenters to its board and taking pains to ensure the governing body represents all demographics, including business size, sector and location. He said bylaws were amended to limit BID members’ access to executive committee meetings, which sometimes deal with sensitive matters involving personnel. He said the BID’s harshest critics have been limited to a noisy few.
“It would be impossible to run a nonprofit organization if the Executive Committee meeting were open to a thousand members,” Sternlieb said.
But those critics say they are speaking out for those who are afraid to do so.
“There are a lot of mom-and-pops that are renters, and some of them rent to big property owners, and they can’t go against the fabric of the BID because they’re scared of retaliation,” Hope Solomon said.
Stuart “Izzy” Ezrailson, a Georgetown merchant since 1969, said he hasn’t been thrilled that the BID accelerated Georgetown’s transformation from a quirky, historical village into an outdoor mall for corporate chains over the years. But overall he thinks the BID has been beneficial and well-practiced at finding consensus among a very diverse membership. He said the BID also has brought professional standards of urban planning to one of the city’s most distinctive venues.
“Who’s the expert — the guy who went to college in urban planning or the guy who owns a liquor store?” said Ezrailson, a partner in a clothing store called Reddz. “I’m a believer. And I was a skeptic.”