Cary Goodman’s office always looks closed.
A roll-down gate blocks the storefront entrance to his one-room headquarters for the 161st Street Business Improvement District. Instead, visitors wind through his building’s main lobby and through a few windowless rooms to reach his office.
At the Kingsbridge BID, on Broadway and West 236th Street, a visitor on a weekday in November had to navigate around a black SUV parked on the sidewalk by the auto-repair shop next door. The Southern Boulevard BID, which services about 150 businesses, does not worry about blocked entrances: It doesn’t have an office.
“That’s how poor we are,” says Medina Sadiq, that BID’s director. “We can’t afford an office.”
Business improvement districts, like these three in the Bronx, increased by 50 percent under Mayor Michael Bloomberg – from 45 to 68. Of the 23 new BIDs launched during the Bloomberg years, 20 are in the outer boroughs. The first BID opened at Manhattan’s Union Square in 1982. BIDs provide street sanitation and promote their districts through events, such as the Bryant Park ice rink.
As Mayor Bill de Blasio stakes out economic inequality as a priority for his administration, there is a stark contrast in funding and benefits between Manhattan BIDs and those in the outer boroughs.
BIDs are organizations approved by the city to collect fees from landlords on specific merchant blocks. (Unless they own buildings, stores and businesses don’t pay fees, though some claim they are charged more in rent.) The goal is to make business blocks look better, attract more customers, and draw good merchants to vacant properties. Some consider BIDs to be the engine behind the city’s small business economy and to help commercial districts improve. Vacancy rates are lower. Streetscapes are noticeably better. Residents become more aware of existing stores and businesses. And property values are up, several BID directors and annual reports state.
Manhattan BIDs Have Way More Money
But other studies show that smaller BIDs don’t reap the same benefits as larger ones in Manhattan commercial districts.
The average budget for a Manhattan BID is over $3.3 million, while the Bronx average is nearly one tenth of that – about $311,500, according to an analysis by City Limits.
The average budget in Brooklyn is about $439,000. Queens’ is $293,000, but one of its BIDs—180th Street BID—has a tiny assessment because it’s in an Empire Zone, an area where businesses already receive special state tax benefits. Staten Island only has one BID with a $150,000 budget.
“A tale of two cities is a tale of two BIDs,” says Goodman, director of the 161st Street BID, which collects $190,000 a year in assessments—one of the lowest in the city.
The Downtown Alliance, covering Wall Street and many corporate buildings, is the wealthiest BID in the nation. It collected $13 million for fiscal year 2012.
The disparity is not surprising, since the fees are calculated based on property values. The large districts also have an advantage in raising additional revenues above and beyond the property assessments.
The Times Square Alliance, for example, raised an additional $4 million in 2012 through various programs and contributions, on top of its $11.6 million assessment.
That’s more than 10 times the total amount of outside revenue raised in 2012 by all 11 BIDs in Queens combined. Nine of the city’s 68 BIDs failed to raise any outside money.
Budgets of Bids
Five highest and lowest assessment amounts
Enough Attention to Borough BIDs?
Many BID directors praised Small Business Services, a city agency, for its help. But Goodman, of the 161st Street BID near Yankee Stadium, says the agency’s treatment of BIDs was not always uniform under the previous administration.
“The corporate BIDs have the kind of leverage and access that goes with being a part of this particular [mayoral] administration,” said Goodman in November, referring to then-Mayor Bloomberg. Goodman noted that the Yankees are not a BID member, and added: “From my perspective, I couldn’t honestly say the smaller BIDs are given the same kind of treatment by SBS as the corporate BIDs.”
For example, Goodman says, he would like to collaborate with the MTA to put a fresh coat of paint on the subway’s peeling, rusty overpass at 161st Street and River Avenue. It presents a bad image of the neighborhood to the thousands who come for Yankee games and the paint job could signal the BID’s worth, he adds.
But he has gotten no action in two years of trying. He contacted MTA officials and City Council members who represent the area. Goodman says he thinks the project is finally moving forward, but will not be confident until he sees new paint at the station.
“We have almost no clout,” he says. “We’re effectively powerless.”
The MTA did not respond to a request for comment.
Frank Franz, board chairman of the Belmont BID on Arthur Avenue, whose budget was $340,000 last year, says BIDs lacking resources should get more support from the city, not less.
Sadiq, the Southern Boulevard BID director, would like the city to help her apply for a state grant called the New York Main Street Program to buy new awnings for local businesses. That’s because the submission requires at least nine different forms with 16 pages of instructions.
“The application is so hard I can’t do it,” says Sadiq, who started her BID five years ago and now serves 150 businesses. “It’s huge and it makes it difficult for small BIDs with one staff person.”
SBS also gives grants to smaller BIDs for special projects. In December, SBS announced six recipients for one such program, Neighborhood Challenge, which awarded grants up to $100,000. Three Brooklyn BIDs received grants, and the other three went to economic development corporations—larger nonprofits with some similar goals as BIDs—in Manhattan, Queens and the Bronx.
“We make every effort to work with different organizations and communities throughout the five boroughs regardless of size,” says James Mettham, assistant commissioner of the Neighborhood Development Commission, an SBS department. “This agency has really made an effort to expand the reach of BIDs to outside boroughs.”
‘No Discernible Impact’ in Small Boroughs
But those efforts have not fixed the disparities. In 2007, three professors at New York University found that property owners in larger BIDs usually see a 15 percent increase in property value, while smaller BIDs “have no discernable impact” on property values.
“Most of what they were doing was paying for an executive director,” says Ingrid Ellen, one of the study’s co-authors and a professor at NYU’s Furman Center for Real Estate and Urban Policy. “They didn’t have the kind of budgets and economies of scale that could allow them to make more dramatic changes in their neighborhoods.”
Last year, New School professor Rachel Meltzer looked at how BIDs formed in a study published by the Journal of Urban Economics. Meltzer’s study said BIDs are more likely to form, and reap benefits, in neighborhoods that are already at an economic and political advantage.
“When you have the smaller BIDs, you just are not at a scale where you can really benefit from economies of scale,” Meltzer says. “Maybe a third of your budget is going towards administrative cost, and that leaves very little for actual service provision. So economically, it’s harder for it to make sense and make an impact for the smaller BIDs.”
Goodman also says he has almost no money to buy ads to promote BID events. Many Bronx BIDs spend the vast majority of their budget on administrative costs and street sanitation.
De Blasio and BIDs
De Blasio has made small business a centerpiece of his economic development strategy. Carl Weisbrod, co-chairman of his transition committee, founded and ran one of the city’s most successful BIDS, in the downtown financial district. De Blasio’s home borough of Brooklyn offers one model for smaller BIDs joining together to increase their clout.
The Downtown Brooklyn Partnership—a consortium of the Metrotech, Fulton Mall and Court-Livingston-Schermerhorn BIDs – essentially decided the Partnership’s whole was greater than its individual parts, says Laurel Brown, the Partnership’s executive director of operations. The BIDs retain their autonomy but lobby together on projects that improve the entire downtown region.
The Partnership, which began in 2005, works with developers and property owners to bring in new businesses and promote districts’ residential appeal. The districts have a lower vacancy rate than midtown Manhattan, and to ease the crunch, the partnership recently approached landlords near the Fulton Mall, offering to renovate their unused upstairs space in exchange for renting to small tech companies.
“I can say from first-hand experience that really being able to, generally speaking, work in tandem with other BIDs in a nearby area, and leverage economies of scale, that you get to do more,” says Brown. “I think it can definitely work in other areas.”
‘A Manhattan BID in the Bronx’
Some Bronx directors say they want to collaborate too. Daniel Bernstein, deputy director of the Fordham Road BID, says a partnership between his organization and the nearby Belmont Hill BID could spread resources across a wider area.
There are no plans yet for a Bronx BID partnership, Bernstein says.
The Fordham BID, which opened in 2005, is the borough’s largest, covering one of the city’s most popular shopping districts. Its assessment in 2012 was $625,000 — nowhere near the $9.9 million budget of the 34th Street Partnership, but more than double the roughly $230,000 budgets of Goodman, Sadiq and Bouihier. Despite Fordham’s large territory, its budget is smaller than Manhattan BIDs due to lower property values and because few buildings have more than one commercial tenant.
Its relatively larger budget allowed the Fordham BID to start with a two-person staff, a rarity for many outer borough BIDs.
“We’re kind of like a Manhattan BID in the Bronx,” says Bernstein.
Bernstein also hires Fordham University interns through a federal work-study program, which costs the BID nothing. He says smaller BIDs should use unpaid interns to cover the workload.
Until partnerships form, the current state of Bronx BIDs “needs more attention,” Bernstein says. He praised SBS for its work, but says the de Blasio administration should review how BIDs are funded.
“Part of me wants to say it’s fine the way it is, but I don’t think that’s true,” says Bernstein. “We have smaller BIDs that [can’t do] the type of work that other, bigger BIDs are doing and that’s not fair.”
Correction: The original version of this article reported that Franz was the director of the Belmont BID; he is the board chairman. It also stated that Weisbrod founded and the ran the Union Square BID, but that is not the case. We regret the errors.