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Owners bring back 'a bit of the old days.' (business improvement districts)

Owners bring back |a bit of the old days'

Business Improvement Districts are spreading throughout New York City, creating clean streets, attractive shops and safe havens for wary New Yorkers. These BID's, as they are known, are areas in which the local property owners have banded together to improve the immediate area with new lighting, security and other amenities. The money that pays for these items is raised by an additional assessment on commercial property taxes and by law is not imposed on residential property.

Several BIDs have been signed into law by Mayor Dinkins in the last few months, including those at Times Square, and 34th Street.

Bernard Mendik, who is on the board of the Grand Central Partnership, and is co-chair of the 34th Street BID, said we are living in a time when individuals, companies and business people are going to have to do more for themselves than they have expected from government. "The BID's are a terrific response to that need," he said. "It doesn't mean we can do it better," Mendik noted, "it just means we can do it."

The BID, Mendik said, "means greater protection, sanitation and a presence of the business people who are all collectively working together, which is a great positive for the area and the city in general." The city should encourage more BIDs, Mendik said, adding that they are very responsive and helpful in their attitude. He mentioned Mayor David N. Dinkins, Deputy Mayor of Economic Development Sally Hernandez Pinero, the City Council, and Manhattan Borough President Ruth Messinger as having been particularly responsive.

The new 34th Street BID stretches from Park Avenue to 10th Avenue, and primarily from 31st Street to 35th Street and will contain more than 36 million square feet of commercial space. Attorney Peter L. Malkin, chairman of the Grand Central Partnership will co-chair the 34th Street BID along with developer Bernard Mendik.

Daniel A. Biederman, president of the Grand Central Partnership, executive director of the Bryant Park BID and currently running the 34th Street Partnership, said the seemingly proliferation of BIDs has been greatly exaggerated because there were several in the "pipeline" for many years which were just approved. In fact he said, it's not a good time to put together a BID because of the economy. "People are not eager to commit more funds and everybody's furious about real estate taxes," he said, adding that organizing 34th Street was "difficult."

Bruce Cohen, a publicist for several BID's including the Grand Central Partnership, the 14th Street BID and the 34th Street Partnership, agreed that it is very difficult to put a BID together, and not everyone can accomplish it. "The BID needs the participation and support of many people and constituencies," he noted.

Cohen said a state law enacted in 1982 allowed a BID to be created literally on a "PC," by not requiring separate legislation for each BID.

Special assessing units created prior to the 1982 law includes 165th Street in Jamaica, Fulton Street in Brooklyn, Jamaica Center along Jamaica Avenue and Nassau Mall in Downtown Manhattan.

There are also now 17 BID's throughout the city. The Bronx HUB shopping district BID was created under the 1982 law. It was established in July 1988 and was the first BID in the Bronx. Among the more recently approved BIDs are Time Square, Fulton Mall in downtown Brooklyn, Steinway Street and MetroTech. The BIDs also need to be approved by the City Council, the Mayor and the State Comptroller.

The BIDs are set up by non-profit corporations, city planner Barry Dinerstein said. "There is no vote and nothing there that says people have to get people to agree." However, he noted, if 51 percent of the people who own property file objections, then the BID cannot go forward.

Barbara Wolff, an assistant commissioner in the city's Department of Business Services, who is responsible for the BID program, said the most recent BIDs were the result of years of work. "At the same time, we have others which are in some stages of the review process before they start the formal approval process, as well as other areas who are saying, |hey, if we want to manage and serve our communities then this is a way to go'."

The increased interest, Wolff said, is as much a fact that there are many out there and how well they are working, as it is a result of budget cuts. "They see this is a way of ensuring continuity in the delivery of services which the community wants for itself, and not a function of the city's budget crisis. I do not think the increased interest is a result of the city's budget crisis," she said, "because at the same time, the city is increasing its taxing on the very people who are being increased through these districts."

The 14th Street/Union Square BID was one of the first in 1984, to take advantage of the streamlined requirements, Cohen noted. The 14th Street/Union Square BID was able to improve its image as a middle-class shopping district with high volume and low prices through money spent by the BID. The district includes the streets and sidewalks outside, but not the Union Square Park itself, which through other community group involvement became the scene of festivals and not drug dealers. "Union Square Park is great," said Cohen, "and the BID cleans the streets."

Bryant Park is also a formal BID. "When you do a park," explained Cohen, "you replace it with parents and kids and office workers on their lunch hour and keep it well manicured. There won't be any room for drug dealers."

"Businesses have to get together and get it competitive," Cohen implores. He said it is key for a BID to keep the property owners, the businesses, the tenants and nearby residents informed on where money is being spent, what works, and what BID's are doing for them.

City figures, according to Wolff, indicate the response rate for payment of the extra charges is 95 percent, although Cohen said the figure is closer to 75 percent compliance. "You have to pay and you must pay it, he said. The charges are billed at same time in same way as regular real estate taxes, Wolff noted adding that money owed from previous years also comes in. As far as she knew, no one had gone in rem because of a BID charge.

Wolff said the property owners pay because the BID helps the local business community help itself. "This is like mall management, but better, because it is the property owners and tenants who say they want and then do it," Wolff added. The BID gives them organization and structure, she noted and can present ideas as a group when working with city agencies since the BID acts as a liaison between the city and the groups.

Wolff said in computing charges for property owners, some BID's use gross square footage, others use assessed value, while still others use linear footage. "We allow them to come up with a formula for their district," she said.

Wolff said no more BID's are in the formal approval process but there are between 15 and 20 "deep in the planning process."

Areas which are in various planning stages include 8th Street, which she said has not formally started the planning, the Lower East Side, West 125 Street (Morningside to Fifth Avenue), Industrial Park, Port Morris, and East Williamsburg. The Fifth Avenue Association is also in its planning process and there has been some talk of a Garment Center BID, but no plan as yet.

Scott G. Klein, assistant director of the MetroTech Area Business Improvement District, said Forest City Ratner was instrumental in setting up the BID as were the local universities and corporations. The New York City Transit Authority, which has two offices within the BID, were also helpful, Klein said, and started a pilot sanitation program.

The MetroTech Bid encompasses a diversity of participants in the area including MetroTech proper, its developer, Forest city Ratner, and its tenants including the Securities Industries Automation Corporation (SIAC), which does data processing; Brooklyn Union Gas, which his moving its headquarters there; Chase Manhattan Bank, soon to have two buildings of office space and data processing; and Bear Stearns which is also moving in 1,500 workers. There are also retailers such as neighborhood landmark, Sid's Hardware, which recently opened in new MetroTech quarters while the rest of the building is being erected around them.

The three neighborhood universities, including Polytechnic University which has a portion in MetroTech, New York City Technical College, and the Brooklyn Campus of Long Island University, are involved in the BID as well as other small retailers and a few local residents.

The colleges are supplying in-kind services because of the not for profit status which cannot be assessed, Klein noted.

One problem for BID's has been the concurrent rise in assessed valuation as the city assessors claim the properties are worth more because of nearby development or the BID work. Klein said a student intern has been compiling statistical data and preliminary findings have discovered that property tax assessments went up in the MetroTech area more than in any other part of the city over the last five years. "In fact," Klein noted, "there is no one here to shop yet except for 800 SIAC employees. They have already hit these people and they don't have the business yet."

Similar complaints have been heard in the HUD, along Fordham Road in the Bronx and in Long Island City where values were brought up as the Citicorp Tower was built. "If we do find out this is true," Klein added, "we owe it to these businesses to help them fight their assessments."

Oddly enough, it is the idea of personal involvement which Wolff believes is one of the other reasons there is a continuing interest in BIDs. "It is the down home manageable, definable, we are involved in our business community attitude, saying we just don't want to rely on the city all of the time," she said.

Wolff said city services in BIDs are also enhanced by the coordination with city agencies and it has helped with communication. For instance, she said, if sanitation is cleaning on certain days, then the BID might clean on alternate days.

Owners can visually see what they are paying for, Wolff said. "They see someone walking around with the 14th Street jacket on, cleaning up the garbage," she said. "This is taxation with representation. While critics complain they are paying more for what the city is supposed to provide, Wolff said the BIDs are supplementing the city efforts. "You can never have too much sanitation, or too much security," she said. "If the city isn't equipped, owners say we can pay for it ourselves."

Cohen said in the beginning of the Grand Central Partnership, people were skeptical, "But now you can take a train into Grand Central and there are no more bag people."

Biederman said in key places, such as in front of Grand Central, violent crime is down 85 percent.

"Between the foot patrolmen assigned to Midtown and our guys," said Cohen, "there are a lot of uniforms and walkie talkies on the streets." Cohen said overall crime in Midtown is down 10 percent.

Malkin, who is chairman of the Grand Central Partnership, believes even more crime is actually reported now because their people are encouraging victims to report and prosecute the crimes.

Streets are also much cleaner than those in surrounding areas, Biederman boasted, and said it is noticed on the city operations score card as well as by those walking in the vicinity.

There has been a significant change in the Grand Central area in improving what Biederman calls "street furniture." The workers have removed graffiti and repainted everything from postal boxes to lightposts and hydrants. Most of this is merely temporary cosmetics, Biederman said, because there is a plan to replace all of these through the capital improvement program in cooperation with the city.

The floodlighting of Grand Central has been accomplished, Biederman said, which is the first part of the multi-phases capital improvement program now being financed.

The recent court decision denying the transfer of Grand Central air rights underground to a building at 383 Madison, however, Biederman said, is having a "considerable corroding effect," on their efforts. Metro North and the MTA want to buy Grand Central from Penn Central, he said, but they are unwilling to go forward with redevelopment until they own the fee.

"In one sense we have returned to an old fashioned city," Cohen said. "You have police walking a beat and you have sanitation guys with a barrel and a broom. The Grand Central Partnership, with private money, has been able to do that."

The Grand Central Partnership has a total budget of $8 million, $6 million of which comes from assessments. The city, Biederman said, also contracts out approximately $2 million in social services to the Grand Central Partnership. Over 150 people who were homeless in September 1989 when they started, he said, are not homeless anymore. "They are in apartments, have jobs and are off the streets. Many more people are being served everyday in the center at St. Agnes School including 500 to 600 who are eating every day."

A survey among the homeless was conducted in the Grand Central district so they could learn how to help the people. A similar survey is yet to be made for 34th Street but Biederman believes that will be accomplished in October. "We have to go there and discover what needs to be done," Cohen said.

Malkin said special efforts will be made to work with the small retailers, particularly those West of Broadway and on the southside of 34 Street. There will also be added stress on the improvement of store facades by working with these store owners. Biederman said a lot of them need help in redesigning their storefronts "to get the message out without shouting."

"We're really focusing this BID on security and sanitation and the taxi ques at Penn Station," Malkin said. "There will be less of an emphasis on capital improvement, and more on basic services and cleaning up. We hope to have it all well under way before the Democratic National Convention in July.
COPYRIGHT 1991 Hagedorn Publication
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Aug 21, 1991
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