Adi Talwar

The fate of small businesses is a key point of concern in the discussion of a possible Inwood rezoning.

 

 

Last year the Washington Heights Business Improvement District in conjunction with the Northern Manhattan Arts Alliance (NoMAA), Inwood Art Works, Northern Manhattan Arts and Culture (NMAC) and Friends of Inwood Hill Park, received a three-year grant for $1.2 million dollars from the city’s Department of Small Business Services Neighborhood 360 grant program to revitalize the Inwood commercial district.

The grant requires the Washington Heights BID and its partners to hold events and workshops for the community, launch a marketing campaign, and provide beautification and sanitation services while organizing and retaining local businesses, according to the SBS website.

That might sound like just what a neighborhood commercial strip needs. But some of the advocates who are resisting the city’s proposed rezoning of Inwood believe the steps outlined in the city grant would lead to the creation of a new Inwood BID or a possibly an extension of the Washington Heights BID. And a BID, they say, is the last thing the neighborhood needs.

“In relation to BIDs, they have a concept of wanting to clean up the streets and make it more pristine. Because they want to raise rents. Property owners want more for their buck,” says Paloma Lara, a Washington Heights resident and member of Uptown United, a coalition of groups that has advocated against the rezoning process for Inwood.

It’s not clear that the Washington Heights BID plans to launch a new bid for Inwood or attempt to add Inwood to its current territory, which stops just north of the George Washington Bridge. The BID did not respond by press time to numerous inquiries.

Members of the Neighborhood 360 team dispute the notion that the work has a nefarious goal. One of the grant recipients, Northern Manhattan Arts Alliance (NOMAA), a non-profit arts organization, supports the works of artists and arts organizations in northern Manhattan. “The grant has been vital for some of the art programs we have and assisted us to do new programming,” says executive director Joanna Castro.

The Inwood rezoning, the fifth neighborhood rezoning sponsored by the de Blasio administration, is in the middle of a seven-month public review procedure that could approve, amend or reject the mayor’s plan. In advisory opinions delivered earlier this year, both Community Board 12 and Borough President Gale Brewer have said no to the current plan and demanded changes. Those opinions are only advisory, however. On Monday, the City Planning Commission will vote on the proposal. The City Council is next, where Councilmember Ydanis Rodriguez—the catalyst behind the rezoning study—will have a strong say in the final, binding decision.

The fate of small businesses has been a concern in all the de Blasio rezonings to date. New zoning can lure new development and boost property values in a way that prices long-standing stores out of the neighborhood. That can dramatically alter the retail options for residents, who lose favorite restaurants and pay more for groceries at snazzier food stores.

That separation in interests between commercial property owners—who stand to gain when property values and local commercial rents rise—and commercial tenants, who must pay the higher rents, has long driven the debate over the value of BIDS.

* * * *

According to the city’s Small Business Services, there are 75 BIDs across the city with a combined budget of almost $148 million. An estimated 93,000 businesses have been served, 127 public spaces have been maintained and approximately 4.0 million trashed bags collected in the past year.

A BID can provide varied services such as sanitation, security, capital improvements, neighborhood promotion, beautification and business attractions. BIDs are financed primarily by assessment of local property owners within a district.

Property owners in the targeted area must approve each new district. Then, according to SBS, a BID must go through an extensive review process and has to be approved by the Department of City Planning and the City Council before it can exist.

Once a BID has been established, all commercial property owners in the area are automatically a part of the BID; it is not voluntary, according to SBS. That means every commercial property owner in the district must pay an assessment fee determined by the size and value of the property. And most owners pass those costs onto their commercial tenants as part of their commercial rent.

Business improvement districts have been in New York since the 1970s, when the fiscal crisis severely eroded public services. The BIDs became an answer to provide services and rehabilitate commercial districts at the cost of the property owners.

According to Susanna Schaller, a certified urban planner and Inwood resident whose research into the role that BIDs have played in the redevelopment of Washington D.C spans fifteen years, the intention behind BIDs was to create business districts that would become viable again in the inner cities and were used as vehicles to create a sense of safety and cleanliness for suburban visitors and tourists.

Schaller’s research suggests BIDs have become much more powerful politically and financially today, and can affect city policy. For example, if BIDs create safer spaces for consumers in a urban district, then property values will eventually rise after improvements. At least in the case of some BIDs*, fees might rise along with property values. If a BID expands geographically, then more properties are added onto the BID which also helps raise the BID’s revenue.

That growth can accompany* gentrification and rezoning. A neighborhood BID promotes business and revitalization in its commercial district to attract consumers, and investors follow those consumers. These small improvements could lead to larger changes, Schaller said.

Schaller says that in Washington, D.C., BIDs played a key role in the transformation of neighborhoods. “From my perspective, BIDs there oiled the gentrification machine. I think the questions to ask here are, ‘Who gets to form BIDs and in what context, and who gains from organizing a BID?’ And, ultimately, ‘Who gets to make decisions on the activities they pursue?’” Schaller asks. “They are by design vehicles that are primarily run by landlords because at least a majority of the board has to be property owners. That means from my perspective, they have a democratic deficit that is already built into them.”

The question of BIDs and democracy has been fought out in court. In 1998, midtown residents, comprised of two Fifth Avenue cooperatives, sued the Grand Central District Management Association, complaining that the Grand Central BID violated democratic principles by giving the 920 residents within the district one representative on the board while 200 commercial property owners had 45 seats. The U.S. Court of Appeals for the Second Circuit rejected the residents claims on the grounds that BIDs are exempt from the “one-person, one-vote” principle because they have a special limited purpose and do not have the same powers as a government entity.

SBS says BIDs come in different shapes and sizes. The smallest BID has an annual budget of $62,000 and largest spends $22 million a year. According to the SBS, each neighborhood BID serves a particular purpose. Some exist for beautification purposes only, and others focus on retaining and servicing local businesses.

Some of the censure of the program from critics can be based on experience with a particular BID, defenders say. But there are other BIDs across the city that collaborate with small businesses and their larger communities from cleaning up storefronts to giving opportunities to students in the local public schools.

When it comes to rezoning, a BID can advocate for a district, especially during the land use application process, but most of the time, BIDs do not vocalize their opinion during a rezoning, according to the SBS. The Washington Heights BID has not taken an official stance on the Inwood rezoning proposal.

* * * *

In the community surveys the city’s Economic Development Corporation did ahead of proposing the Inwood rezoning, the agency says, there emerged a desire that the neighborhood plan “support the small businesses and vibrant commercial streets that give Inwood its distinct character.”

Under the Neighborhood 360 program, SBS** partnered with the Washington Heights BID on a survey of the commercial district and then awarded the grant to it and the other partners to ” to staff, plan, and implement customized commercial revitalization programs informed by the CDNA over the next three years,” according to the city’s 2017 Inwood Action Plan.

“Initial projects will include sidewalk cleaning services, banner installations, a business marketing campaign, business support workshops, merchant organizing, and family-friendly cultural programming to promote small business growth and quality of life in Inwood,” the Action plan continued.

The action plan also committed the city to offering more workshops and programs for small businesses in the area. “Additionally, the city will assist merchants with regulatory compliance so they incur fewer fines and violations and will offer free workshops and one-on-one legal assistance to support Inwood business owners in their lease negotiations,” the plan read.

In an update to the action plan released this winter, EDC reported that the SBS** Washington Heights Business Solutions Center had from July 2016 through June 2017 held over 50 courses, assisted 27 businesses with their leases, provided $470,000 in capital to 57 businesses, supported the launch of 14 new businesses and generated 288 new jobs.

The update also tallied trash pick-up (5,000 bags removed), graffiti removal (for 300 businesses) and sticker and poster removal (285, for those scoring at home).

According to the SBS, the Neighborhood 360° grant program supports projects that strengthen and revitalize the streets, small businesses, and community-based organizations. The grants of up to $500,000 are awarded to community-based development organizations to help organizations staff, plan, and implement customized commercial revitalization programs over multiple years.The agency works with grant recipients to implement these strategic programs, which can include partnering with additional local community organizations.

Nonprofit organizations incorporated in New York State and organizations compliant with annual State and Federal filing requirements are eligible to apply for a Neighborhood 360° grant. This includes Business Improvement Districts (BIDs), which are non-profit, community-based organizations, according to the SBS.

But some Inwood advocates worry that those innocuous—or even benevolent—services could pave the way for an Inwood BID, which would give property owners a powerful voice to pursue an agenda that might be different from residents’ and business owners’ priorities.

“They want to model businesses after what they think is appropriate for a business and neighborhood.Basically, I am talking about gentrification. So it’s about property owners, the BID, creating the illusion of a safer and cleaner space,” says Lara.

“Once a BID is introduced into a Black and Latino neighborhood, the area flips,” said Lara. “This is when the city says they are trying to make this area ‘vibrant.’ There is nothing that is not vibrant about this neighborhood. Whitewashing a neighborhood does not make it vibrant.”

Advocates, including city officials such as Manhattan Borough President Gale Brewer, have been pushing to save the small business sector in the Inwood area for over two years. The push for advocacy has become stronger since the Inwood rezoning proposal began that approval process known as ULURP.

“In the case of Inwood the city’s Department of Small Business Services has marketed their involvement in the Inwood Planning Initiative as having made an investment in the neighborhood’s small businesses, but in fact the funds went to the Washington Heights BID, to organize BID-like activities,” added Schaller.

Eleazer Bueno, a Washington Heights business owner and member of Community Board 12, says his experience with the Washington Business Improvement District has been good. But he hopes not to see a new bid in Inwood. “Strictly speaking as a business owner, [BIDs] are really economical for local elected officials and property owners. Businesses are not their primary function.”

Bueno, who has owned a fast food restaurant for the last four years, sees the grant as another way to form a BID for Inwood or expand the Washington Heights BID, “The way they empower the businesses through the Neighborhood 360 [grant] will be enough to create a BID.”

For advocates, the problem is not just what the city is doing, but what it’s not. Helping businesses negotiate their leases is welcome, says Schaller. But she would like the city to consider bolder steps. “The city is also not contemplating any of the zoning tools, small store sizes or restrictions on chain stores, for example, to keep Inwood a small business-friendly environment.”


* These elements of the story were changed after initial publication to reflect the fact that some BID assessments are not based on property values, and to clarify what Schaller says is the link between BID organizing and changes in land use and real estate.

** Because of an editing error, the original story attributwd these moves to EDC rather than SBS.

13 thoughts on “Boost to Local BID Has Some Inwood Rezoning Skeptics Worried

  1. I agree with Sandra Schaller.
    Fighting a bad rezoning when there exists a viable alternative – the Uptown United Platform – is occupying Inwood residents right now.
    I am sad to read that the WAHI BID thinks it should expand to include Inwood.

    • Just for the record, the BID is not on record saying that it wants to expand. It did not comment for this story.

  2. BIDs in The Bronx like the Jerome Avenue BID and The Hub at 161st and 3rd Avenue did not facilitate a displacement of local residents. They expedited graffiti removal, sidewalk cleaning, organized community block parties, and employed local under employed residents.

  3. This article is mighty loose with the facts. Would it have been so difficult to have interviewed people knowledgeable about these tools who don’t bring an agenda to the table? Spreading falsehoods is not journalism. City Limits – you can and must do better! A few examples…

    “If property values rise so do fees for a BID”
    Every BID calculates assessments differently – not all use property values to determine assessments. Sometimes linear frontage is used, or square footage. Often a mix of inputs determine BID assessment rates. Moreover BID assessment increases have to be approved by City’s council. It doesn’t happen automatically. These budget increases are part of a public process.

    “Once a BID is introduced into a black and brown neighborhood it flips”
    Tell this to the small outer borough BIDs that are struggling and have very small assessments. If a BID with a small budget were the thing “flipping a neighborhood” it would probably be a more popular tool! This statement ignores regional market dynamics that impact where people move and why. That is what makes a “neighborhood flip”. In fact, NYU Furman did a comprehensive study a few years ago that found that small BIDs have no impact on property values. In most places, BIDs help keep streets cleaner, remove graffiti and maybe do some marketing in service of small businesses and an improved quality of life for people who live there.

    “The city is not contemplating zoning tools like small stores sizes or limits on chain stores”
    This statement assumes these tools work and the City fails to institute them out of malice, when in fact these tools have been used with very limited success. In fact one could argue that they often bring unintended consequences and sometimes undermine the intended outcomes. On the Upper West Side the store size limit create a scarcity of larger stores (which by law had to be grandfathered in) and small businesses who happen to be located in these larger spaces face rent increased when their leases are up. Why would the City pursue polices that do this? They don’t. They learn from past mistakes and try not to repeat them. Other examples include store size limits that attempted to “save” Germantown on the Upper East side. Did that happen? No. Why use blunt policy tools that do very little to advance a cause? This is why the City has leaned heavily on non-regulatory tools (like SBS programs) over the years.

    Articles like these really undermine City Limits credibility as a credible source of urban news.

    • The point about differing assessment models is an interesting one. It is true that some BIDs use different bases, or a mix of bases including property value, in their assessment. However, if a BID assessment does include property value, and property values rise, then I think the BID fee would rise automatically, without Council approval, which is needed when the formula itself is changing. Right?

      The other two statements are quotes from different sources. You can disagree with those sentiments if you like, but our including the viewpoints of stakeholders does not constitute fake news.

      • No one ever said fake news! Only that this could have been presented in a journalistic manner with input from both sides and more detail that would improve the accuracy of the information. It reads as an opinion piece. That feedback is quite different than suggesting it is fake news.

      • BIDs are only allowed to assess up to a cap. Even if property values rise, the total assessment stays at the cap, which is a City Council approved number. In order for the total assessment to be increased, BIDs must seek approval from City Council. So no, there is no automatic rise in BID fees as property values increase. While formulas do include property values, the total assessment is shared across all properties in the BID, up to the cap. That “sharing” is also part of the assessment formula. Does that make sense?

    • I agree with your comment on assessments (“fees”). This is exactly what I said during the interview. Furthermore, I clarified that I could not make this determination for New York City because I did not know what the assessment formulas were. In DC, some BID assessment formulas are indeed pegged to assessed values so BID budgets rise with property values.

      Also, did not say that rezonings and BIDs are necessarily related. Instead I said BID organizing often accompany rezonings to market neighborhoods as is the case in Inwood.

      The way I look at BIDs is from a institutional perspective and a regime perspective. BIDs don’t act alone, they act in consort with other public and private institutions to promote placemaking. In my work, I call this “BID urbanism”. In DC BID’s were instrumental actors in the transformation of the city. From my perspective BIDs there oiled the gentrification machine. I think the questions to ask here are who gets to form BIDs and in what context and who gains from organizing a BID and who? And, ultimately who gets to make decisions on the activities they pursue? They are by design vehicles that are primarily run by landlord because at least a majority of the board has to be property owners. That means from my perspective they have a democratic deficit that is already built into them. But, they continue to be marketed as “business” organizations.

      The other question I asked was whose interests a BID will serve if one is organized in Inwood? In terms of the of the Inwood rezoning I asked how SBS will concretely advocate for Inwood’s small businesses when the rezoning paves the way for major redevelopment on the neighborhood’s commercial corridors, and many of the businesses sit in “soft sites.”

  4. It’s interesting the majority of the board members of BIDs are property owners when property owners are the ones that have been closing down our mom and pop shops and are hungry for a reZoning in Inwood.
    Isn’t there a conflict of interest there?
    Also, just want to point out that without legislation to protect small businesses (like the SBJSA), lawyers that the SBS (located at 619 Throop Ave Brooklyn NY) have provided are stonewalled by landlords when they try to negotiate leases because landlords know there is nothing anyone can do to stop them. They have no conscious. “It nothing personal, it’s just business.”
    My experience has been that landlords don’t just want their commercial space back from 30 and 40 year businesses but the take back is done in such a way as to crush the business owners by giving the business owners 2 months notice and sometimes surprising them with a Marshall with an order to vacate. It’s brutal!!

  5. ‘“In relation to BIDs, they have a concept of wanting to clean up the streets and make it more pristine.’

    How awful!

  6. I have no problem with an Inwood BID, especially since Inwood’s commercial streets are demonstrably among the dirtiest in the city when it comes to litter. It’s not necessarily gentrification to simply be able to walk down the street without being ashamed to be living in a landfill. Sometimes people just want a mechanism for picking up the trash.

    Many residents have in fact been asking for a BID for some time, and nearly got one around 2012 when La Marina’s backers took over the initiative. However, that turned out to be a ruse as part of getting approvals to operate in a manner very different from their concession contract, and once they were open with their grossly illegal valet parking and such they abandoned the BID efforts so nothing came of it.

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