Bidding on the new BID initiative? King Street business organizations petition for community buy-in

Bidding on the new BID initiative? King Street business organizations petition for community buy-in
The BID initiative has divided some businesses on King St

By Kaitlin Murphy

As reported in the Times’ April 7 article “Is business booming?,” a revised Business Improvement District is being considered in Old Town along the King Street corridor. Supporters in favor and in opposition to the BID have been voicing their concerns that stem from the very nature of the proposal.

When the attempt was made to implement a BID in 2017 and 2018, the legwork was done by a group of business owners.

As reported in the Times, the current proposal calls for “creating a 13-to-15-member board made up of business owners and property owners within the defined district. One to two city appointees would also join the organization.

Two additional non-voting members appointed by Visit Alexandria and the Alexandria Economic Development Partnership plus two members rep- resenting residents within or near the district would round out the governing body.

Paid staff would also be part of the plan to create direct liaisons for the business community and city officials” according to the proposal.

This time around the city has a hand in pushing it through and has hired consulting firm MuniCap, Inc. on a $100k contract to help. The formation of the BISD board is also in full swing with Maurisa Potts who has been retained as a public relations consultant in support of the BID progress.

“In regards to me, Old Town Business (not the city) retained me to oversee and handle communication and PR needs for the project due to my extensive experience in working and understand- ing BIDs or BID-like models,” Potts explained in an email to the Times.

“On the BISD, we have posted a draft board of directors slate and proposed governance information,” Potts further clarified.

The Old Town Business Association, which the IRS classifies as a 501(c)(6) organization, defines BISD on their website

“Business improvement service districts (BISD) are defined areas in a city or county in which property owners pay an additional, annual special tax (on top of the standard real property taxes) which is utilized to promote and improve the business environment within the BISD. BISDs are typically governed by a dedicated board of directors and led by an executive director and key staff. BISDs organize and manage services, activities, and events in the BISD, as well as arrange amenities above and beyond what a city or county would  typically provide.”

Initiatives at this scale require money to be sustainable long term so where would the funds be coming from?

The Old Town Business Association breaks down the numbers on their website. The BISD will be funded by a $0.10 service district tax that will be levied in addition to the real property tax (current rate of $1.11, with service district tax a total of $1.21, representing a 9% increase in the total tax rate) on parcels of real property within the OTB-BISD.

The timing of the renewed efforts to create a BISD and available funding coincides with pandemic relief grants.

Services already under contract signal that funds were available to promote these efforts. In October 2022, Old Town Business Association was one of eight Alexandria businesses to be awarded grant money from the Alexandria Economic Development Partnership and the city’s ARP funds. The ALX B2B Business Association Grant Program al- located $535,000 to the following organizations:

• Alexandria Chamber of Commerce

• Alexandria Minority Busi- ness Association, Inc.

• Del Ray Business Association

• Eisenhower Avenue Pub- lic-Private Partnership

• Old Town Business Association

• Old Town North Alliance

• Social Responsibility Group

• West End Business Association

Grants were awarded to associations that applied in August 2022. Applicants re- questing more than $50,000 had to provide a match of $1 for every $5 in grant funds awarded. All grantees must use all funds by the end of 2023 and are required to file regular reports to AEDP on how the funds are being used.

City Manager Jim Parajon clarified in an email response to the Times that city allocated funds for the implementation of a BID were included in the city budget:

“The City of Alexandria is not funding the BID. As a part of the approved fiscal year 2023 operating budget for economic development, the city allocated funding for the implementation of a BID in Old Town Alexandria.” Following budget approval, City staff conducted a solicitation to contract with a consultant experienced in working with lo- cal jurisdictions to implement similar districts. The consul- tant, MuniCap, is working to:

1. Ensure the proponent group is following Virginia’s statute and the City’s adopted guidelines and process to pro- pose and submit an Old Town BID application for City Council consideration and,

2. Prepare materials that can be used by others as templates for similar economic development initiatives across the City.

With financial confidence in the viability of a BISD, groups within the City government are voicing their support. In a public letter dated June 1, the Waterfront Commission backs efforts to move forward with this plan:

“Waterfront Commission endorses enactment of an Old Town Business Improvement Service District (BISD) to pro- vide enhanced services to businesses, residents, and visitors at the waterfront and along King Street.”

In addition, “The Waterfront Commission recommends that City Council take the key step of establishing an Old Town BISD, fulfilling a long-standing recommendation of our commission’s efforts to advise implementation of the Waterfront Small Area Plan.”

The letter’s language lends its support to council, not directly to the small businesses along King Street. While the nature of the BID is a business owner-initiated endeavor, it appears that the current understanding is that a push from the city will bring the initiative to fruition.

This level of influence makes it harder for smaller non-city-backed businesses to be heard on the issue.

Organizers in opposition to the BID set up a public web- site warning of the tax implications on the small businesses along King Street if a BID becomes established. A petition on the landing page of the website encourages neighbors to sign and share the petition.

How is this BID process so different from the earlier attempts of the Old Town businesses?

In an email interview Scott Shaw, of Alexandria Restaurant Partners wrote, “[The] previous proposed BID area was much larger, running up and down Washington and including Prince and Cameron. It was a fair criticism then that it’s hard to design effective programs for an area this big, diverse. We have chosen to make our BID very tight, much smaller.”

The smaller area also reset the budget to around $1.2M, about half the size as initially planned.

A “blueprint didn’t exist in 2016 on how this might come to be. City Council has now laid that out clearly… who gets to vote, % property owners who must approve. We didn’t have to do anything here, but just having a process to follow now makes it very different. We have been very intentional in our efforts to reach out to people and then incorporate their feedback into our plans,” Shaw shared.

Shaw shared the steps taken in the new efforts via email:

“We began with a quiet phase last December/January in which we talked to 60+ property and business owners. We used that to test the basic viability of a BISD, and to get ideas on what people wanted to see it focus on. This became our initial plan.

Beginning in February we launched public meetings, virtual and in person, to present that draft plan

Since February we have met daily with individual property and business owners to edu- cate them about our initiative and to seek their feedback. Not a quick process, but the right way to do this.

While conversations and planning around a BISD along King Street continue, the efforts to build out the board of directors, hiring of PR professionals, and city backing strengthen the foundation for implementation.

A bulk of the budget from the BISD would focus on social and PR to promote specific businesses and the 20+ local events that Old Town Business now runs, which the BISD would manage.”

With so many players involved, the BISD has the feel of a top-down approach in- stead of a grassroots initiative. The additional layers of bureaucracy have only muddied the waters regarding a BISD for the small businesses that operate under existing marketing plans that add charm and revenue to the Port City.