Business improvement districts, or BIDs, can be effective vehicles for enhancing commercial districts. The way they work is pretty straightforward: an extra tax is levied on businesses that operate within BID boundaries, a governing board of stakeholders is established and the funds are spent improving and marketing the area.
BIDs have been successful in Arlington, D.C., New York City and many other places. They are generally seen as vehicles for supplementing city services to make particular areas cleaner, safer and more attractive.
The fairest BIDs are operated from the bottom up rather than the top down. For example, New York City has established the overall parameters for operating a BID, but the business owners themselves decide, by a vote, whether or not to establish a BID in their jurisdiction and what the tax rate — within a range set by the city — would be. A provision also exists that enables affected property owners to disband the BID.
Opponents of establishing BIDs in Alexandria have valid points. Management of the revenue generated from the special tax would fall to an unelected board of directors. Establishing a BID in Old Town sets a precedent for future special tax districts throughout the city. And, as Bert Ely pointed out, services that would be provided under the bid — like cleanliness and safety — should already be provided under the city’s existing budget.
We have several concerns of our own to add to those cited at last week’s meeting of the governance subcommittee of the waterfront committee:
Businesses that operate in Old Town already pay a “surcharge” in the form of higher rents and building prices. This means they are already paying a higher amount of the city’s taxes. Given that the historic district is the city’s tourist golden goose, why aren’t these BID enhancements already in place?
In some jurisdictions, residential property owners within BID districts also pay a tax surcharge. Is city council willing to guarantee that the BID tax would only apply to businesses and never to homeowners?
BIDs have been around for more than 40 years. What does the long-term data indicate regarding the prosperity of affected businesses pre- and post-BID formation?
We believe that a BID can only be established and continued with the consent of the businesses under its jurisdiction. To that end, a petition or referendum should be held, and the establishment of a BID in Old Town should require a majority of affected business owners to vote in favor of the proposal. If the majority says no, then there should be no BID.
Furthermore, we think that at intervals of no more than a year or two, the same referendum should be held to see if businesses want to continue the BID. This form of direct democracy is the only way to avoid the noxious malady of taxation without representation.
Like the idea for a centralized, citywide preschool location, we think that the proposed Old Town BID has considerable merit. But establishing BIDs in Alexandria would represent a sea change from the way we have previously done business. Council must not repeat what we think was a significant mistake with centralized preschool: Don’t rush into this before the details are worked out.
Far too many initiatives in Alexandria are imposed from the top rather than generated by support from the bottom. A special tax district has to have the majority backing of those who would be affected. Otherwise it should be a nonstarter.