Bill Proposes Funds for East of the River BIDs

In January, Ward 2 Councilmember Jack Evans introduced the Business Improvement District Economic Development Act of 2014, a bill to bring more business improvement districts (BIDs) east of the Anacostia. “It's hard to believe that when I first advocated for BIDs, I had to agree to limit them to Ward 2 in order to convince my colleagues to lend their support to my legislation,” said Evans in a press release. “Now that we have seen what a great idea BIDs are, I am hopeful we will be able to implement them in all areas of the city.” However, some question if Evans’ proposal changes the legal definition of a BID.

What Is a BID?

The DC BID Council, an association serving the city's BIDs, defines a BID as a “commercial area where private property owners approve a property assessment for services above and beyond what the city provides.” In other words, property and business owners tax themselves to pay for services including cleaning, safety, promotions, and event planning. Every BID is considered to be a nonprofit organization with its own board of directors. BIDs in DC were established in 1996 when the DC Council passed the Business Improvement Districts Act, a law helping establish the process through which interested partners may create and maintain BIDs. The first two BIDs were Downtown DC and Golden Triangle, and the District now has nine. The most recent, the Anacostia BID was established in 2012.

The Current Bill

“My only caution is it takes businesses to create business improvement districts,” said Councilmember David Grosso during the March 12 public hearing. “If we try to put them in places where they're not quite as developed or prepared for a BID to be in, it will be hard for that BID to succeed.” Evans' bill attempts to solve this problem. According to its terms DC government could provide potential BIDs in Wards 7 and 8 with financial assistance up to $500,000 per year for up to five years. The bill also amends the Howard Town Center Real Property Tax Abatement Act of 2012 by redirecting money from the suspended project to use as funding.

What's in a Name?

While the BID Council supports the creation of new BIDs east of the river, they are wary of using the term to describe something publicly funded. “We think it’s very important to make a distinction between publicly funded commercial corridor revitalization/place management efforts and those supported by a BID structure,” wrote Natalie Avery, executive director of the BID Council. “The publicly funded entities [Councilmember] Evans seeks to create in Ward 7 and 8 are not based on a BID tax, do not have the full involvement of the commercial business community and do not fit the legal definition of Business Improvement Districts (BIDs).” While she mentioned that some BIDs receive public funds to help supplement programs, they are still supported by a BID structure.

Some witnesses agreed with the BID Council's stance. “Simply calling neighborhood revitalization efforts 'Bids’ will not automatically replicate the success of BIDs, because the key to the BID model is the fact there is demonstrated commitment from the commercial property owners and business owners” said Kristen Barden, executive director of the Adams Morgan BID. “We think that it's critical to retain the legal definition of BIDs so that all stakeholders understand what it takes to fund and sustain a BID and the fundamental role played by the commercial sector in shaping their activities.”

Michael Stevens, president of the DC BID Council and the Capitol Riverfront BID, suggested a new name for Councilmember Evans' bill: Commercial Corridor Investment Program. “I think that kind of gets to the gist of the matter in terms of naming and a separation of names between BIDs and this program,” he said. Stevens suggested that the Commercial Corridor Investment Program would be training for proposed BIDs. If successful, the program could extend throughout the city. Tom Brown of the East Washington Development Alliance worked with Stevens and others to create this proposal. “We felt this would set the tone for the kind of thing that could be established” he testified. “We wanted to make sure that we could undergird our efforts and proposals with the kind of support that you all just discussed.”

Starting the Conversation

Now that the Committee on Finance and Revenue has the bill under consideration, the discussion will continue beyond just a name change. For instance, Barden suggested creating a competitive application process in which organizations must meet a series of criteria to be considered for funds. However, the committee must also discuss which DC government entity will handle the process: the BID Council, the Department of Small and Local Business Development, or both? “This is a good way to start the conversation,” said Councilmember Grosso. “I'm not sure if we're ready yet, but I'm ready to listen.”