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February 13, 2000, Sunday
The City Weekly Desk
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Why BID's Are Bad Business


BUSINESS IMPROVEMENT DISTRICTS, or BID's, are celebrated as major components of New York City's renaissance. Who can object when landlords and their commercial tenants voluntarily pool resources to keep their neighborhoods clean? If only it were so.

In fact, BID's are not voluntary, and their promise of clean streets masks what they really do: serve the narrow interests of some groups within the BID's at the expense of all the rest, with commercial tenants always ending up on the losing side. And rather than promoting the city's renaissance, the BID's confine it. When wealthier neighborhoods are cleaned by BID's, poorer areas go uncleaned. And street cleaners who might have earned a living wage as city employees remain in poverty as they polish the sidewalks of the city's richest neighborhoods.

By law, commercial tenants do not count in BID's. The board of the Madison Avenue BID, which stretches from 60th to 86th Street, has 20 members. Eleven are landlords; only four are commercial tenants, typical for BID's. Although there may be 100 commercial tenants for each landlord, the law decrees that at least 51 percent of board members of any BID must be landlords.

Were the BID's really about cleaning streets, the landlords' dominance might not have mattered. Consider the Downtown Alliance, the BID that includes Wall Street and is the city's largest. During the recession in the early 1990's, when many financial institutions were merging, the area experienced economic depression, and the office vacancy rate reached 25 percent. Tenants and landlords alike would have welcomed help, but universal help was not offered. In mid-1994, Carl Weisbrod stepped down as president of the city's Economic Development Corporation and set out to organize the Downtown Alliance BID. Six months later, the alliance started operations and the Giuliani administration announced a plan to change zoning so offices in the district could be converted into apartments.

Although these conversions benefit landlords, to commercial tenants they are a calamity. Unlike landlords, tenants benefit from falling rents. And to Wall Street firms that rely on corporate clients, the inflow of residential neighbors -- still occurring today -- is of little use. Furthermore, eager to take advantage of tax abatements, some landlords have tried to force their remaining commercial tenants out: tenants complain 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.

At street level, store owners are equally unhappy with the Alliance BID. Clothing, candy and jewelry stores cater mainly to office workers on lunch breaks, not to residents, and the owners of these stores would rather not see conversions that destroy office space permanently.

The Alliance is not singular in its unpopularity, and in some BID's even the landlords are unhappy. A city government survey of 404 landlords and property managers in all the city's BID's revealed that 31 percent thought their BID was a bad investment. Only 45 percent believed they were getting their money's worth. On Madison Avenue, merchants complained to the mayor that they became aware of the existence of the BID only when they received their first assessment bill. Several wrote to ask why they should have to contribute toward services that the city is already responsible for providing and for which they were already paying taxes. Still others wrote that Madison Avenue was already both clean and safe and that the only reason for the BID was to create jobs for the bureaucrats who would run it. In fact, the Madison Avenue BID was set up by the city without anybody ever asking whether its supposed beneficiaries actually supported its creation.

Commercial tenants aren't the only ones hurt by the BID's. To their workers the BID's are oppressive. In its annual report, the Madison Avenue BID boasts that it is ''the world's premier shopping destination'' for luxury and exclusive personal services, yet a worker with two years on the job is paid $6.38 an hour, and that worker is one of the lucky ones. Half of the BID's street cleaners are in the Work Experience Program (WEP); they cost the BID nothing except $3 a day for transportation. These workers, among them former nurses' aides, maintenance workers and office personnel who, it happens, lost their jobs when WEP workers were introduced into city hospitals and city offices, collect welfare checks, $168 every two weeks, not wages. Taxpayers' money is thus being used to help the owners of the city's most expensive real estate depress the wages of the city's poorest workers. In the Alliance BID half of the street cleaners are parolees who get minimum wage. Overflowing jails continually replenish the inventory of the wretched.

To poor neighborhoods, BID's present other problems. In 1992 and 1993, during a fiscal crisis, the city fired hundreds of sanitation workers and reduced the number of street cleaning days by machines from 6 to 4. Thanks to the proliferation of BID's, no pressure is coming from the city's most influential citizens, and the former street-cleaning schedule was never restored. If the merchants of the Grand Concourse in the Bronx want to see it cleaned, they would have no choice but to establish a BID. But unlike Madison Avenue, this is not a place where commercial renters or landlords can afford extra taxes. If it is to succeed, a BID on the Grand Concourse would have to use WEP workers. 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.'' Thus the Grand Concourse's dilemma: it can either remain in its current squalid condition, or support WEP, the very program that undermines the chances of its own residents to find high-paying jobs.

In neighborhoods that can afford BID's, streets are cleaner today than they were after the fiscal crisis of the early 1990's. But surely having thoroughly undemocratic organizations that ruthlessly exploit workers and serve the interests of landlords at the expense of commercial tenants isn't the only way to have clean streets.

Organizations mentioned in this article:

Related Terms:
Economic Conditions and Trends; Business Improvement Districts

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