Road to self-assessment is not always smooth, or successful.

Hardly a year after it was established, the Miracle On Broadway Business Improvement District in downtown Los Angeles was dissolved by disgruntled business owners.

In the Melrose-Fairfax district of Los Angeles, business leaders are embroiled in a dispute with Councilman Mike Feuer over a proposed BID that figures to be an issue in next year's council election.

In Sherman Oaks, the leader of a citizens' council says that his group blames Feuer for interfering with what is supposed to be a grassroots process.

These examples illustrate how Business Improvement Districts aren't a sure bet to succeed, despite big successes some of them have scored in revitalizing commercial neighborhoods from Santa Monica's Third Street Promenade to New York's Times Square.

BIDs can face long delays getting started, can fail after they have been formed, and can even become political footballs that divide rather than unify business owners.

Nancy Hormann, a San Francisco-based BID consultant whose firm is part of a consulting team now working on two proposed downtown Los Angeles BIDs, estimated that "probably a few dozen" of the hundreds of BIDs throughout the United States have been dissolved after their formation.

But Hormann said BIDs can run into problems that prevent their formation or result in their eventual failure if they're not established according to some guiding principles.

"Everyone who is going to be affected by the BID must be informed about everything that is happening every step of the way," Hormann explained.

Business or property owners, who pay for BIDs through additional fees or property tax assessments, will view the BID as just another tax imposed by the city if they aren't included in the process, she added.

BIDs can fail if business owners don't see results fast enough, or if they disagree with how the BIDs' funds are being spent, or simply "don't like the direction the organization is going," Hormann said.

Kenneth Aslan, director of the Historic Core Property Owners' Association in downtown Los Angeles, said the Miracle On Broadway BID failed for all of the reasons cited by Hormann.

"The business owners saw Miracle On Broadway as a city thing and not something they did themselves," said Aslan, who is heading a proposed downtown BID.

He said organizers are making sure that everyone affected is thoroughly informed about plans for the new BID, which the founders hope to establish next summer. It is to include a larger part of downtown than with Miracle On Broadway.

"Since last September (of 1995), we have been meeting every Friday to talk about the benefits of a BID and how we can work together," Aslan said.

Sometimes, individual city officials have been at the center of BID controversies.

Warren Blum, president of the Melrose-Fairfax Coalition, and Susan Levi, immediate past president of the Fairfax Business Association, both accuse Feuer of taking control of a BID they say their groups began.

"It hasn't failed yet, but it's having trouble getting off the ground because the councilman wants to control it," Blum said.

Business owners submitted a petition to L.A. Mayor Richard Riordan on Sept. 11 demanding the disbanding of a Feuer-appointed committee that recently chose a consultant for the proposed BID.

The petition states that the Feuer committee does not include enough business representatives and demands that a new committee be formed with two-thirds of the members being local business owners. Currently, only three of the committee's 10 members are local business owners.

Jane Blumenfeld, Feuer's chief of staff, disputed Blum's and Levi's claim that Feuer has been an obstacle to the Melrose-Fairfax BID's success. Blumenfeld cited a Sept. 16 letter from Feuer to property owners and merchants in the prospective BID area.

Feuer's letter, a response to the business owners' petition, states, "The decision to create a BID, to be made next year, will occur only if there is strong support by at least two-thirds of the merchants and/or property owners in the area... If a BID is formed, the board of directors will consist solely of business and/or property owners in the Melrose-Fairfax area."

Blumenfeld said the Melrose-Fairfax BID is proceeding properly, and businesses will be represented every step of the way.

In another proposed BID in Feuer's district, Mikie Maloney, president of the Sherman Oaks Town Council, said her group now finds itself rushing to meet a Nov. 4 deadline to choose a BID consultant because of delays caused by Feuer's involvement.

Maloney said her group was ready to interview BID consultants and form a BID board of directors earlier this year when Feuer's office offered to help. After Feuer stepped in, she said, a "communication problem" between his office and the Sherman Oaks Town Council left the BID in limbo for two months.

Maloney said the situation has since "completely turned around," with Feuer's office assisting the town council.

But Blumenfeld said the proposed Sherman Oaks BID was floundering because the town council's BID formation effort "wasn't very well organized." Funds available through the city to help organize the BID would have gone elsewhere if Feuer's office hadn't stepped in, Blumenfeld said.

Both the Melrose-Fairfax and Sherman Oaks BIDs illustrate the problems BIDs face "when they become politicized," said Jeff Brain, a Sherman Oaks Realtor who ran against Feuer for the L.A. City Council last year.

Brain, who plans to run against Feuer again next year, is chairman of the Ventura Boulevard Specific Plan Review Board, a citizen group working with the Los Angeles City Planning Department to oversee development along Ventura Boulevard. The Melrose-Fairfax BID is expected to be a major issue in the campaign.

According to Hormann, the San Francisco consultant, city council members frequently take an active role in forming BIDs in other parts of the country.

But in Los Angeles, Feuer is the only council member who has been so closely involved in hiring a BID consultant. In other L.A. districts, she said, the merchants or business owners typically form the group that hires the consultant.

Regardless of who forms them, Los Angeles BIDs have an advantage over those in many other cities in that L.A. provides seed money, typically tens of thousands of dollars, to help get the BIDs started. BIDs in many other places must depend solely on private funding.

The list of successful BIDs is longer than the list of failures, Hormann pointed out, but forming a BID is still far from a sure thing.