The Business Improvement Districts of New York

Prepared for the

Economic Policy Institute

July 25, 2000


Moshe Adler

212 873 6803



Follow James Hopkins as he and Walter Gilchrist wind their way between parked cars with a broom and a dustpan in hand along New York City's fashionable Madison Avenue.  There is no real garbage  anywhere--store employees routinely sweep in front of their stores and Jim and his partner have already covered this same route earlier.   But occasionally a smoker passes by, and Jim and Walter rush to pick her cigarette butt just as soon as it has been dropped.  It is hard to keep busy when two people are responsible for sweeping just five blocks--a distance one would cover in just five minutes--all day long.  In the Fall salvation comes from the falling leaves that get gathered, so it appears, even before they hit the ground.

            Jim and Walter work for the Madison Avenue BID (Business Improvement District).  Although they do identical work, Jim dreams of one day having a job like Walter's.   Whereas Walter is a worker, Jim is a "trainee,"  cleaning Madison Avenue in order to develop work habits, as part of New York City's Work Experience Program (WEP).   Walter has been sweeping the streets for  more than two years now, and with this level of seniority he is already making $6.38 an hour.  Jim is required to work 18 hours for his weekly $84.00 welfare check, and although he wants to, he is not permitted to work more.  His pay is a handout rather than a wage. 

            Jim's chances of getting a regular job are slim.  Although the BID is a private enterprise, Jim costs the BID nothing at all, other than $3.00 a day for transportation money.  His welfare check is paid by the city.  If the BID could have its wish, it would replace Walter with another WEP "trainee" like him.   But Walter is protected by a union contract.

            But even Walter is not actually an employee of the BID.   If he were, with his level of seniority he would be making $9.75 an hour, which is what the workers of the Grand Central Partnership BID or the 34th Street BID, make.   Instead of working for the BID, Walter works  for the Atlantic Maintenance Corporation, a street cleaning contractor hired by the BID.     

            The Madison Avenue BID, which was created in April of 1996, did not always contract out street cleaning.  It used to hire its own employees.  When Local 210 of the International Brotherhood of Teamsters came to organize the workers, however, management threatened to fire all them and to cease its street cleaning operation altogether.  The union felt it had no choice but to compromise.  Instead of unionizing the workers as BID workers, the union agreed to let the BID contract-out its street cleaning work, provided that the contractor be Atlantic Maintenance, where the workers were already unionized.  Since the union's contract with Atlantic Maintenance called for lower wages than the union's contract with BIDs, the Madison Avenue BID agreed.  Atlantic Maintenance, in turn, agreed to continue to employ the BID's five existing workers, and a contract was signed in July of 1998. 

            In its 1998 Annual Report the Madison Avenue BID boasts that it is "the world's premier shopping destination" for luxury and exclusive personal services.  The world's wealthiest people have their homes (or second homes) on Park and Fifth Avenues, it continues, and  Madison Avenue is their local  shopping mall.  How does the shopping district of the world's richest get away with paying $6.38 an hour to a worker with two years on the job?

            The answer is the WEP "trainees." According to Frank Sosa, who is the union's business representative, the Madison Avenue BID first employed thirteen sweepers, but then switched to using WEP "trainees," reducing the number of paid employees to five.  The union did not believe that the BID  of the most expensive retail area in the world would cease its cleaning operation, but the workers were already working side by side with WEP "trainees," and both they and the union were worried that the BID would find a way to employ WEP "trainees" exclusively. 

            Nevertheless, if any place could serve as the grounds for a winning battle for a living wage for street sweepers and against the use of WEP workers to drive down wages and eliminate jobs, Madison Avenue in 1998 must have been the place.  Not only because when the city  government sends WEP "trainees" to Madison Avenue it is siding with the BID of the world's richest against the city's poorest, but also because by doing so it transfers  money directly from the pockets of taxpayers to the pockets of  the landlords of Madison Avenue, the most expensive real estate in the country.  So why did the union not fight?   

            Part of the answer may lie in the fact that Sosa, who used to be a BID worker himself, simply does not believe that street sweepers will ever be able to make a living wage.  Sosa is optimistic that the next contract that he will negotiate on behalf of the workers will be an improvement over the existing one.  But when you ask him whether this means $20.00 an hour, he laughs heartily.  Stretching his hand all the way over his head, he says "we are not going to ask for that."  He then points just above eye-level and says "we are going to ask for this."  Twenty dollars an hour is about what the city sanitation workers are making, but when I point this out to him Sosa just shrugs.  It is clear that he will consider $7.50 an hour --with two years on the job--a victory.  Workers who wish to improve their lives, Sosa told me in another conversation, should avail themselves of the computer classes that the union offers free at its headquarters.  (Each of the contracts that Local 210 signs require employers to pay into a union education fund, and it is from this fund that the money for the computer classes comes.  The employers' contribution to the education that should transform street sweepers to modern office workers?  Four dollars per worker per month.)

            You may wonder why the union of street sweepers would offer computer classes as the main route to better jobs.  Wouldn't street sweepers benefit more from courses in nursing or in building maintenance, for instance?  I discussed nursing with Carmen Camacho, who does not share Jim Hopkins' enthusiasm. To her the redundancy of street sweeping on Madison Avenue is depressing.  But nursing would not be a solution to her problems either, she explained, since she is already a trained nurse's aide.  It was in fact a job she held until her daughter developed medical problems that required her to miss work frequently.  Her supervisor suggested that she take a break until her daughter improved, and  without much concern she agreed.  But when she was ready to return to work she discovered that hospitals, including the one she had worked for, were firing, rather than hiring, workers.  In the city hospitals  the total number of employees was actually increasing, but this was because WEP workers had been ordered into the hospitals.  Eight hundred employees were fired in 1996, and according to their union, District 37 of AFSCME, 1,000 WEP "trainees" were sent to replace them. 

            Camacho, who loved nursing, then took courses in patient's home care and in child care (both free courses offered by the city) and has since filed job applications with home care agencies and child care centers, as well as with hotels, looking for work as a maid.  Nor has she given up on hospitals, hopeful that her willingness to work with all patients, regardless of medical condition and the type of care required would make her a more attractive candidate, despite the overall cutbacks in hospitals personnel.  Nevertheless, during the two years that she has been searching she has not received any calls.   In the mean time she is receiving a workfare check of $68.50 every two week period in which she works 42 hours for the BID.  She also receives public housing and $125.00 a month in food stamps.    

            Camacho is offended that her work with a broom and a dustpan is referred to by the city as work-experience.  She has had plenty of work-experience, she points out.   Before she was ordered to sweep the streets she had another WEP assignment.   Not in a hospital--perhaps her case worker saw the irony in that--but as a filing clerk in the department of human services.  She liked the job and her supervisor, she says, liked her work.  

            Fellow WEP "trainee,"  Henry Mitchell, is similarly befuddled.  Before working for the BID he worked as a WEP worker in the mailroom of the city department of transportation. At his encouragement I called the supervisor of the mailroom who confirmed that the mailroom employs several WEP "trainees" and that all of them are indeed "moved on" after a period of time, no matter how good a job they do.  Why, after gaining work experience in the mail room and being a conscientious worker was he not permitted to keep the job, Mitchell wonders?  Perhaps the city government is concerned that WEP "trainees" who are long on a job would demand to become regular employees.  After six years of looking, Henry is still filing job applications all over town, including for mail clerk positions.  But at 56 years of age and with "welfare recipient" at the top of his résumé, he is not hopeful.  Like Camacho,  Mitchell also gets $68.50 every two weeks for sweeping the streets.  (He also gets  a $215.00 a month rent subsidy.)

            Just as not all WEP "trainees" are unskilled, neither are all WEP "trainees" doing unskilled jobs. Jim Matthews,  58 years old, may be sweeping the streets now, but he was previously  a WEP building maintenance worker.  Matthews had worked as a machinist for Faberware for 25 years, the last eight as a supervisor, before the Bronx plant which had employed close to 2,000 workers, closed down in 1996.   Faberware products are still popular in New York, but they are now produced in China.  Matthews was unable to find another job as a machinist, but he did find a job as a laborer in another factory, Imperial Damper, until this factory downsized a year and a half later, when Matthews and fifteen other employees were laid off.  Matthews then became a security officer in a housing project, but discovered that he was unfit for the job: He simply could not police anyone.  Matthews smiles when you ask him whether he is gaining work habits in the Work Experience Program, habits  that will prepare him for the job market.  He has filed  numerous applications to work either as a machinist, a fork lift operator or a manual laborer, yet after more than a year he is  still waiting for the phone to ring.  He blames his age for his unemployment. 

            Frank Sosa has never met Jim Matthews. WEP "trainees" are not unionized; they are welfare recipients, not workers, and are forbidden by law to organize.  But Matthews or another skilled worker like him may be the reason that Sosa is  a union official instead of a maintenance worker.  When he finished high school Sosa was all set to start working in building maintenance.  His father had been a maintenance worker for most of his life and Sosa had grown up with the job.  But when he graduated, Sosa discovered that  permanent maintenance jobs had become scarce.  Too many machinists had become maintenance WEP workers, perhaps.  Sosa is not complaining.  It is clear that he enjoys his work for the union immensely, and he at least is one worker who has benefited from the Work Experience Program.

            Sosa may not believe he can fight for a living wage for street sweepers, but he is a fighter nevertheless.  The Madison Avenue BID has just decreed that the BID and WEP "trainees" are not permitted to buy their lunches from the street vendors along Madison Avenue.  The hostility of the BID toward street vendors is no secret.  "[E]fforts to decrease the number of illegal or non-compliant vendors... continue to be a priority," the BID states in its Annual Report.  By preventing the workers from buying from all vendors, however, the BID is not targeting only "non-compliant" behavior .   It is interfering with the right of the vendors to carry on their legitimate business.  The workers obviously cannot afford to frequent the restaurants along the avenue, and in order to find other street vendors they have to walk to Third Avenue, a considerable distance for workers who spend all day on their feet.  To compensate the workers for this hardship management agreed to extend the  lunch break by five minutes. 

            For WEP "trainees" there is one other lunch rule.  On Tuesdays at noon, Saint James church on Madison and Seventy First Street  holds a soup kitchen, but he WEP "trainees" are unable to eat there.  Why?  Because the lunch hour of the "trainees"  happens to start at 1:30, half an hour after the soup kitchen closes.  But a BID worker who would not allow his name to be used told me that he and his colleagues had been instructed not to let the "trainees" take their lunch break earlier on Tuesdays in order to prevent them from eating at the church. 

            By law Sosa cannot mobilize the WEP "trainees," but about the prohibition of the street vendors a battle is brewing.    The contractor does not  pay for  the workers' lunch break, and therefore neither it nor the BID has any authority over the workers during that time, Sosa says:  Either pay for the lunch break, or rescind the prohibition.  What his tactics will be, Sosa is not yet sure.


Central Plan for Landlords

Why are street vendors on the BIDs' enemies list?  The answer seems obvious: they attract undesirable elements.  Their customers do not typically live near Madison Avenue, nor do they come there to shop.  These customers are not always particularly well dressed, and to eat their street food they may sit on a church or some other building stairs.  The merchants of Madison Avenue obviously believe that they are bad for business.  Don't the vendors deserve to have their businesses promoted, just as anybody else's, though?  They don't.  And they are not alone.  In Business Improvement Districts vendors are not represented.  And not only they.  In BIDs the interests of landlords are supreme.  By law.

            On the board of directors of the Madison Avenue BID there are eleven landlords, four commercial tenants, three representatives of the city government, one representative of the community board and one representative of the residents.  The composition of  Boards of all BIDs is similar.  Commercial tenants may not like it, but they cannot change it.  That the absolute majority of a BID's Board must be comprised of landlords is the city law. 

            The rationale behind this arrangement may be that it is the landlords who are responsible for paying the BIDs' taxes.   One might have thought that whether the right to vote should be contingent upon the payment of taxes is an issue that was settled long ago.  In the case of commercial tenants, however, the argument is in any event bogus  because by law landlords are permitted to pass the tax on to them, and many, if not all, actually do so.  But even when landlords do not pass the tax on directly they do so indirectly,  because when a district becomes cleaner, rents rise.   

            Had the interests of landlords and of commercial tenants always been the same, the dominance of the landlords would not have mattered in practice.  But this is not normally the case.  In the Downtown Alliance, the BID which includes Wall Street and is the city's largest, many commercial tenants are seething.  At the beginning of 1990s, when many financial institutions were merging, the area experienced an economic depression and the office vacancy rate  reached more than 20 percent.  Tenants and landlords alike would have welcomed help then, but universal help was not what was being offered.  In June 1994 the former president of the city's Economic Development Corporation, Carl Weisbrod, organized the Downtown Alliance BID of which he became the first president.  Six months later  the Giuliani administration announced a plan to change zoning regulations to make it possible to convert offices in the district into apartments, and to institute a tax incentive scheme that would reward such conversions. 

            To existing tenants the landlords' ability to convert offices to apartments is a calamity.  Unlike the landlords, they benefit from falling rents.  Had the new tenants been potential clients, the existing tenants may have nevertheless had a reason to welcome them.  But the firms on Wall Street rely on corporate clients for their businesses, and their new neighbors are of no use to them.  Furthermore, eager to take advantage of the tax abatement scheme, some landlords try to force their commercial tenants out:  Tenants have complained that  elevator services have been reduced, bathrooms go uncleaned, and that the conversion work is being done in a way designed to disrupt their business.  According to Edward Prial, an owner of The Chief-Leader, a newspaper that is a tenant in the district :  "It's  frustrating that this was allowed to happen.  The Downtown Incentive Plan was  supposed to help businesses.  Instead it forces them out into a market with a limited space."

            The policies of the Downtown Alliance BID are also opposed by many store owners in the district.  Clothing, candy, jewelry and apparel stores cater mainly to office workers on lunch breaks, not to residents, the manager of Da Janeiro, one of the stores on Nassau street, told me. The owners of these stores would rather see rents fall and new firms come in than conversions that destroy office space permanently.  The BID organizes cultural events in Battery Park and the World Trade Center and these are also a source of great resentment to merchants on the side streets, because the events divert office workers from their stores. 

            In the elegantly furnished 33rd floor office suite with a spectacular view of the East River Weisbrod is well aware of these complaints, but has little patience for them.   A rising tide lifts all boats, he tells me, and some business are bound to fail in a market economy, he adds.  Might the tide that he is created also sink some boats?  The vast majority of landlords wanted the BID, Weisbrod responds.  Landlords, but not necessarily tenants, I point out.   It is landlords who pay the taxes is Weisbrod's retort.  This is factually not true, but I did not argue with him.

            There is a silver lining in every cloud, though.  Discouraged, many of De Janeiro's competitors closed their shops.  Without competition, De Janeiro itself now thrives. 

The BIDs don't cost the city anything

According to the New York  Times' John Tierney, the BIDs are "New York's most successful community-development groups" and the services they provide "don't cost the city anything.  The city merely collects the money from local businesses and hands it over to the group." Of course, tax collection has a cost.  But tax collection is far from the only role that the city has in the BIDs or the only source of expense to the city.  To assure that landlords get their money's worth, the city actively monitors the managements of the BIDs.  Shareholders in other private enterprises can only dream of enjoying this level of monitoring of their managers, let alone at no cost to them.

            One member of the board of directors of each of the city's BIDs is a representative of the City Comptroller.  In addition, the annual report of each BID gets examined by the Comptroller's audit committee.  Periodically the Comptroller's office also conducts in-depth audits of each BID's internal controls.  The cost  of all these to taxpayers is hard to estimate, but the comptroller is thorough.  His auditors do not only review the BIDs paper records, they also conduct their own independent opinion surveys, and they even spot-check  the performance of the BIDs' workers' and "trainees".  When things go wrong, as they often do, the demands on the city government are even greater.    In the Madison Avenue BID, for example, there are suspicions that in 1997 and 1998 the president rented office space for the BID  from himself and that he purchased computers, promotional services,  accounting, auditing and payroll services, and even legal services from firms that either he or his family members and associates owned.  Similar allegations have been made concerning the president of the Jamaica Center BID in Brooklyn who contracted for services with another company of which he was president, and there are allegations that this company defrauded the BID.

            Private enterprises normally have to resolve such problems in civil courts with the aid of  private lawyers.  But the Madison Avenue BID is more fortunate, since the City Department of Investigations took over its legal proceedings.   The Department of Business did investigate the allegations of fraud in the Jamaica Mall, but in a sign that even among landlords some are more equal than others the department of investigation did not intervene, and no legal action by the city was taken.  The landlords and merchants of that BID had to file a civil a suit.

            The city comptroller's audits of the BIDs are glowing.  His auditors do make contact with workers and WEP "trainees," but only to make sure that they are where they are  supposed to be, and that they do their job faithfully.  Questionnaires are sent to landlords and merchants to find their opinions about the BIDs, but not  to workers, nor to union representatives or to street vendors.  The fact that many of the street cleaners are either WEP workers or parolees working for minimum wage with no benefits  is never mentioned in the comptroller's reports. 

            Even merchants, however, are not always polled.   To save taxpayers' money, in the audit of the Downtown Alliance the comptroller agreed not to conduct an opinion survey at all but instead to rely on the surveys that the BID itself conducted.   Of the conflict between landlords and merchants, or of the disapproval of many merchants of the BID's promotional policies, there is not a word in Comptroller's report.

            In my meeting with him  I asked Weisbrod to see the BID's own survey, but he refused.  I pointed out to him that since the city comptroller relied on these surveys they must be part of the public record, but he nevertheless demurred.

            Each of the comptroller's reports begins with a statement that by law the majority of the directors of the BID must consist of representatives of  property owners and of business owners, meaning commercial tenants.  This is, of course, technically correct, but it conceals the fact that by law property owners must have the absolute majority even without  commercial tenants.  Since for every property owner there must be about thirty business owners , if  anything is worth mentioning regarding the governance of BIDs,  surely it must be this.

            The pro management and pro landlord slant of the comptroller is particularly peculiar given the events that instigated these reports in the first place.  In 1995 several of the workers of the Grand Central Partnership BID (the area around Grand Central Station) sued because they were being paid only $40.00 a week, obviously below the minimum wage.  At such wages demand for these workers extended far and wide.  The Grand Central Partnership farmed its workers out to the Port Authority, where they helped clean the twin towers of the World Trade Center.  They also worked in banks  as far as Rockaway and Queens, where they were security officers with a special duty  to free ATM vestibules from pan handlers and the homeless.  "Outreach Workers" the BID called them. 

            The BID's president, Daniel Biederman, explained that his BID was paying less than minimum wage because the workers were not really workers, they were "trainees."  "These trainees who are with us are not employees.  The forty dollars they receive is not a wage, hourly or otherwise.  It is a stipend."  Workers are not supposed to  be off welfare just because they are working.  Work merely "augments the public assistance they get."  And in any event, everybody was doing it:  "We have a training program typical to dozens of programs around the city.  I have a list of many other organizations that do what we do." 

            The security officers were not the bonanza that the banks expected, however.  The banks soon discovered that they had just as many pan handlers and homeless individuals as before, only that all of a sudden they were in uniform, and on the banks' own payrolls, however modest that payroll was.  The banks believed they were not getting their money's worth and complained.

            While the workers were suing their employer for the minimum wage, they themselves were accused of having become "goon squads": Homeless people who refused to let their uniformed brethren replace them were beaten up.  But the "goon squad" allegation proved not to be true.  The President of the BID, Daniel Biederman, hired the head of the Coalition for the Homeless to investigate, and he reported that while the BID's "outreach workers" were indeed instructed to "discourage" the unaffiliated homeless from staying in the banks, they were never told how to accomplish their mission.  Thus, while beatings did indeed take place, it was not true that the BID ordered  them.  Biederman was exonerated, but the newspapers interest in the BIDs intensified.  In April 1995 the New York City Council decided to investigate them.  It was this investigation that led to the requirement that the comptroller audit the BIDs.

The Investigation by the City Council

The city council called for an investigation of the BIDs, but its members may have been surprised by the report they ended up receiving.   The investigation did confirm what was already known:  That several BIDs pay their workers below the minimum wage and that several suffer from financial irregularities.  What neither the council nor the media was prepared for was the discovery that the BIDs lacked legitimacy.

            The BIDs were created to serve landlords.  Were landlords getting their money's worth, the investigators asked? A survey of 404 landlords and property managers  revealed that 31% thought the BID were a bad investment and another 24% did not know.  Only 45%  believed that they got their money's worth.  If they were not all that popular, how could the BIDs come into being in the first place, the Council's investigators wondered? When  in November of 1995 the council's investigators filed their report they raised the question, but they could not yet answer it.  A new BID, Madison Avenue, was signed into law in February of 1996, however, and in this case the investigators had all they needed to find out the answer.  

            The Madison Avenue BID  was not yet one month old before a business owner wrote to the mayor to tell him that she had surveyed 100 other business owners like herself and discovered  that only 4 even knew that a BID had been formed.  Similar complaints were filed directly with the council's finance committee by other business owners who also stated that they were unaware of the establishment of the BID before it was established.  Numerous other merchants complained that they first became aware of the existence of the Madison Avenue BID only when they received their first assessment bill.  Several landlords and merchants asked why they should be required to contribute toward services that  the city was already responsible for providing, and for which they were already paying regular taxes. 

            The law that governs the BID decrees that  before a BID is established the Department of Business Services must ascertain that there is support for it.  What went wrong? 

            To find out  the council's investigators undertook an amazing task:  They replicated the process that the Department of Business should have undertaken to determine  whether the Madison Avenue landlords wanted a BID.

            The investigators generated a list of all the owners of commercial properties in the district, of which there were 268 altogether.  Each of these  owners was then contacted several times during the course of a week.  In the end, it turned out that only twelve of the 268 owners could be contacted successfully.  And of these, five had learned about the existence of the BID only after they have received the first bill.  Of 38 property managers whom the investigators encountered when they tried to contact owners, 31 had not heard about the BID before it was established.  Ditto for 36 of the 43 commercial tenants that were surveyed. The staff concluded:  "Given that the Department of Finance list ...was  similar to the list used by the sponsoring group for the Madison Avenue Bid in its outreach effort, is highly probable that real outreach never occurred within the Madison Avenue BID."

            If not landlords or merchants, who was interested in the creation of the Madison Avenue BID, then?  On the BID's side it was an entrepreneur who understood that he could bank on the perception that the public favors privatization, create a BID and become its president.  The merchants themselves were never fooled.  After the BID was established several wrote to the mayor that Madison Avenue had always been clean and safe, and that the only reason for the BID was to create a paid position for the president and his associates.  They could not, of course, know that later he would be accused of misusing funds.  

            On the city government's side, it appears that the Department of Business may not have been disinterested party.  Barbara Wolff, the official who until her death  October 1999 was in charge of BIDs, is also the person credited with bringing the BIDs to New York city in the first place.  Her commitment to them earned her the title of "BIDs' guru" and "the BIDs' mother."   Her conviction that landlords and merchants would want a BID may have been so strong that she felt comfortable certifying  this was the case without having done the due diligence.

             Whatever the causes may have been, the certification of Madison Avenue BID was a certified sham and there were many complaints about its existence.  When the council's staff released its second report in November of 1997, dissolving a BID that was not yet two years old would have been relatively easy.  The city council did not even consider this possibility, however, nor did it  call for recertification or any other of the  city's 33 BIDs, in spite of the fact that only a minority of landlords believed they got their money worth. None of these options was ever proposed. 

            After receiving the November 1995 report Howard Berman, chairman of the finance committee, declared:  "BIDs are a significant reality, especially at a time of fiscal restraint.  I've always encouraged them.  A majority do an effective job and in an honest way.  But some have raised substantial questions."  Unfortunately, there was nothing in the first report that could justify this conclusion. 

            In its reporting The New York Times did mention that 404 landlords had been surveyed, but the only fact it relayed to its readers was that the majority could not name their district or say what the BIDs did.  The fact that only a minority thought that the BIDs were worth their money was not mentioned.  "Commercial property owners pool their resources to hire extra street cleaners, security guards and graffiti removers,"  the paper's editorial stated.  But this was, of course, not entirely true:  First, it is commercial tenants, not landlords, who end up paying the taxes.  Second, how could landlords who did not know what BIDs did, be described as "pulling their resources together" to create them?   Clearly their resources  were extracted from them without their prior consent.  The newspaper did mention the attacks of the Grand Central Partnership on the homeless, but not the fact that Partnership's workers remained homeless while working  for the Partnership, for  banks and for the Port Authority.  The Times' main editorial begun its comments about the report:  "BIDs have been a godsend during a time of municipal austerity."

            Overall, the Times welcomed the existence of the investigation:  "On the whole, the council report is a rare and welcome example for the oversight the city's legislature is supposed to exercise."  But not its most important recommendations:   "Some of the report's proposals are too detailed for organizations that already struggle with more than their share of city paperwork.  It would be wiser to give the new self-regulation a chance before adding too many more requirements."

            To anyone who had expressed the hope, as chairman Berman and The New York Times did,  that the first council report would change things within the BIDs, the second report, with its revelations about the just formed Madison Avenue BID, should have been even bigger news than the first.  But it received no mention either from Chairman Berman or The New York Times. 


Roots:  The Fiscal Crisis of 1991-1992

In 1991-92 the nation  suffered an economic recession that would cost president George Bush his job.  In New York the ensuing fiscal crisis was used to prime the city for the BIDs.  What was called for was a classic Keynesian policy of borrowing.  Today's budget surpluses, both in the city and in the national budget, make clear how unpainful adopting it would have been.  But neither Bush nor Mayor Dinkins would hear of it.  In New York, health care, school and library budgets were cut.  In sanitation the number of street cleaning days by sweeping machines was reduced from six to four and many positions were eliminated.  Poor neighborhoods were the hardest hit,  but a deterioration in sanitary conditions was evident everywhere in the city.   When BIDs started sprouting, most New Yorkers appreciated the return of clean streets and did not ask how much those who cleaned them got paid, or whether the commercial tenants and landlords had actually agreed to the extra tax that was levied on them.   What about the city's sanitation workers?  Where were they when the BIDs were permanently replacing good paying jobs with jobs that at best paid a starvation wage, but most often did not pay any wage at all?

            I addressed this question to several sanitation workers, all members of the United Sanitation Workers Association, who were in line for a doctor's appointment at the department's clinic.  The clinic is at the heart of Downtown Alliance BID, and the presence of the BID's street cleaners, in their bright red uniform, cannot be missed.  At three o'clock in the afternoon they all belong to the BID's second shift, which means that they are all parolees.  Most if not all went to jail for dealing drugs, and were referred to  the BID when they were still in jail:  They are now paying their debt to society by cleaning Wall Street at minimum wage and no benefits.  All the ones I spoke to were fathers.   Jack used to be a union construction worker, making $26.00 an hour when he was working.  But union jobs are scarce, and drug dealing was how he closed the occasional gap.  These minimum wage, no benefits, workers are taking your jobs, yet your union is not doing anything about it, I pointed out to the sanitation workers.

            It's good that it doesn't, they said.  These veterans of the fiscal crisis have no stomach for a fight.  They remember the continuous attacks on them from both the Dinkins Administration and The New York Times  during the fiscal crisis--as if they were responsible for the crisis, or as if any sacrifice they would have made would have made a difference.  The garbage collectors finished their routes in just six and half hours, TheTimes  told its readers again and again.  "A day's work for a day's pay,"  the paper demanded in one editorial.  Privatize sanitation altogether it recommended in yet another.

            This was classic Taylorism.  The workers, paid by the route, not by the hour,  sped up in order to finish early.  Then the mayor and the Times demanded that the same speed be sustained for a longer time.  Cornered, the union agreed.  The results are evident to any New Yorker who watches these workers while stuck behind one of their trucks.  The garbage bags are clearly heavy, and there is an endless number of  them.  The pace at which they are thrown into the trucks appears murderous, and now it lasts a whole eight hours.  A sanitation supervisor told me that he is walking on egg-shells.  The workers are edgy.  This is how it must be in the post office, he believes.  The concessions they made brought the workers peace, but no security.  We better be quiet, they told me, or Giuliani will most definitely privatize even garbage collection by trucks, the one job that is still not done either by the BIDs or by the WEP workers inside the Department of Sanitation itself.

            If you want to remember what the streets of New York looked like at the beginning of the 90's, take the D train to Fordham Road in the Bronx and walk along the Grand Concourse.  If you start your trip in downtown,  when you arrive you will think you are in a different city.  These streets are littered with garbage.    Councilman Ramirez is fully aware of  this neglect in his district.  But the possibility that the city might provide better sanitation services in the Bronx, his spokesman explained to me, is just not there.  It does not matter that the city budget shows an enormous surplus. The only way to get the streets clean, he told me, is to establish a BID. 

            Businesses are thriving on Madison Avenue, but not on the Grand Concourse.  Poverty in New York is at twice the national average, and the Grand Concourse is where many of these poor live.   This is not the place where commercial renters or landlords could afford to pay extra taxes.  If a BID is established, there is little doubt that it will end up using WEP workers.  If not enough of them were available, one could imagine a battle brewing: The BID and councilman Ramirez would demand a "fare share" of this "resource."   Yet  this is the home of those who would become sanitation workers, nurses aides, and maintenance workers, had these jobs not gone to WEP "trainees." 

            One cannot argue with the hopelessness that the sanitation workers are experiencing.  But something is definitely amiss with their union local and the rest of the locals in the city.  There were no responses to the Council's reports about the BID from the  United Sanitation Workers Association, presumably because this local does not represent  BID workers. Most New York City employees are represented by  district 37 of AFSCME which is fighting vigorously, and with a measure of  success, the privatization of the city hospitals and the use of WEP "trainees" there.  But this district is not interested in the BIDs either.   Here were documents that could have been used to finish off the BIDs yet information about them came only from the newspapers.

            What about local 210, then?  Until he was forced to give up one of his presidencies, Daniel Biederman, the president of the Grand Central Partnership, was also the president of the 34th Street and of the Bryant Park BIDs.   Envious of Biederman's power, Mayor Giuliani, an arch privatizer, wanted to eliminate the Grand Central Partnership altogether, and return its maintenance to the department of sanitation.    If there was anything city workers might have been working for, this should have been it.  Following the announcement, there were workers demonstrations on the streets, only these were Frank Sosa's BID workers, demonstrating against the closing of the BID.  The workers "won":  The BID was not closed, and instead Biederman had resigned from the Grand Central Partnership. 

            While both the mayor and The New York Times showed great concern about the productivity of the sanitation workers, the sight of a large number of adults, machinists, nurses, plumbers, maintenance workers, wearing uniforms and chasing non-existent garbage all day long offends nobody.  At the time of the fiscal crisis street cleaning by sweeping machines  was cut by a third. The city budget has a huge surplus now, but calls  for resuming the machines' old schedules are not heard.  When these machines were first introduced to the streets of New York in 1850, for a time the workers vandalized them and occasionally even burned them.  But the machines won.  The cost of labor was just too high.  It took a hundred and fifty years, but the machines have finally lost.