Bryant Park from the air on movie night. The flagship success of BIDs.

The September 19^th issue of Crain’s New York Business carries a broadside attack on business improvement districts on its front page, featuring a photo of Dan Biederman the founder of Bryant Park Restoration Corporation (“BPRC”), Grand Central Partnership (“GCP”) and 34^th Street Partnership (http://www.crainsnewyork.com/article/20160918/REAL_ESTATE/160919896/shaping-a-neighborhoods-destiny-from-the-shadows). The article rehashes a range of charges that were the subject of dozens of newspaper articles published in the 1990s, as well as a half-dozen government inquiries, including those by the New York City Council, the City’s Comptroller’s office, the Federal Department of Housing and Urban Development, and a forensic audit commissioned by City Hall. Given New York’s tabloid culture, many casual (and even some well-informed) observers assumed that where there was journalist smoke, there must be fire, but in fact, the BIDs under Biederman’s direction were shown to be models of good not-for-profit governance and transparency, and none of the negative policy arguments have been shown to be of any merit. BIDs work, and Biederman’s BIDs work better than most. They provide essential services without compromise of any important democratic principles. (BIDs Really Work, City Journal, Spring 1996 http://www.city-journal.org/html/bids-really-work-11853.html).

In fact, I would argue that the downtown renaissance, which began in the early 1990s, was catalyzed by the work of Biederman’s BIDs (of which I was a staff member), and particularly by the success of BPRC. The reopening of Bryant Park in 1992, following philosophies articulated by William H Whyte and George Kelling, demonstrated that social control could be reasserted in the urban core. GCP created “clean and safe” programs for the blocks around Grand Central Terminal in a successful effort to reverse what was feared to be the hollowing out of the city center and its occupation by the violent and homeless. Bryant Park and GCP proved that through high quality maintenance (“fixing broken windows”) and active programming, public spaces previously perceived as being dangerous could be made inviting and attractive. Cities all over the country, from Detroit to Houston, and around the world copied and continue to copy the model.

So why did the BIDs draw, and apparently continue to draw, such scrutiny? In my estimation it comes down to two things: suspicion of success and ideology. New York’s journalistic culture produces a recurring cycle of intense media attention to success, and a subsequent effort to prove that the subject of veneration has feet of clay (see Weiner, Anthony). Elected officials are particularly sensitive to media attention and the success of others, given the highly competitive nature of political life in New York City and the difficulty of drawing attention to local matters in the one of the world’s leading media markets. In 1999, Biederman and his team were forced out of GCP essentially because the people in City Hall were unhappy with the amount of media attention drawn by Biederman and Bryant Park.

A shallow, data-free, leftish ideology also underpins some public official reaction and journalistic and academic scrutiny. First, there was the idea that something called a “business” improvement district could not possibly act in the public interest and must be advancing an exclusively private agenda at the expense of the public. Second, there is the notion that because BIDs are private not-for-profits, they are unaccountable to the public.

There is no evidence, even in the recent Crain’s article, that BIDs in any way advance a private agenda at the expense of the public good. In fact, one of the dialectics of the real estate industry is that, except with respect the setting of the level of property taxes, the real estate industry’s long-term interests actually align closely with those of the public at-large. Property owners can’t pick up and move their buildings, and so the public realm is essential to the value of their investments. Few things are more public than the success of Bryant Park and other revitalized public spaces: all are welcome, none are excluded and all benefit.

One advantage of BIDs is that their governance is close to the ground. Their boards, comprised of owners, tenants, residents and public officials reflect the micro-concerns of neighborhood stakeholders – a field smaller than that of governmental subdivision. The BID board determines the expenditure of what is essentially its money – and that is the extent of its power. While the sobriquet “Mayor of Midtown” applied to Biederman may seem clever, his power is constrained to determining the ways and means of the services the BIDs provide. His “power” is even more constrained by the oversight of the BIDs by elected officials, who hold the real power over the public realm. For most of their activities in public spaces, BID’s must seek approval from the appropriate city agencies, from the Department of Transportation to the Public Design Commission.       In New York City, the City’s Department of Small Business Services has the responsibility of being the local government interface with BIDs. The agency sees its role as regulatory, ensuring that BIDs dot their bureaucratic “I’s” and cross their “T’s.” They perform the role of a brake on risk-taking by BIDs in order to ensure compliance and to prevent scandal and embarrassment to city government, and the agency has been effective in this mission. (See, PUBLIC OVERSIGHT: Business Improvement District Accountability, City Law, December 1995, http://litigation-essentials.lexisnexis.com/webcd/app?action=DocumentDisplay&crawlid=1&srctype=smi&srcid=3B15&doctype=cite&docid=1+City+Law+102&key=b024c9c9d359b7f04050b49cc499d237)

This is not to say that the BID program in New York City is without fault. In the past decade, dozens of small new BIDs have been formed. There is research that demonstrates that smaller BIDs (those with budgets of under $2 million) are generally resource-constrained and have limited impact (The Benefits of Business Improvements Districts, Furman Center Policy Brief, July 2007, http://furmancenter.org/files/publications/FurmanCenterBIDsBrief.pdf). It is the small BIDs that generally run into problems. It is difficult to get local property owners and retailers in the boroughs to participate in BID governance and as a result, the ex-officio board members representing elected officials tend to end up running things. It is not clear to me how to walk this situation back.

In the twenty-plus years since Biederman created the first clean (with Tom Gallagher) and safe (with Richard Dillon) programs, this template has been used in scores of cities across the country. Perhaps the time has come to reevaluate these programs and determine whether they remain the best use of the bulk of BID resources in downtowns that have experienced regeneration. Security programs, which generally absorb a third of BID budgets, may no longer be optimal, given that through broken windows policing, order has been perceived to be restored to downtowns everywhere. Perhaps those dollars might be better spent on public art programs, social services or some other endeavor. That is an issue that each BID board ought to carefully examine to make sure that it is maximizing its positive impact.

BIDs in New York State have the capacity to issue tax-exempt debt, something done by Biederman’s BIDs to great positive benefit (paying for streetscape improvements as well as the capital outlays for the Bryant Park and Pershing Square Cafés). City government is wary of BIDs employing this tool. This, too, should be reexamined as a means of paying for civic infrastructure in public spaces.

In fact, for the last dozen years, New York BIDs have been particularly circumscribed in their activities. They mostly stick to the tried and true of clean and safe, and are not the laboratories of civic innovation that they were under Biederman’s leadership in the 90s. With the replacement of Biederman’s team at GCP in 1999, everyone else in the BID business got the message to maintain a lower profile. In recent years, when choosing leaders for BIDs, their boards have generally chosen to go a political route, seeking former elected officials and government employees who are trusted by local government.

I would argue that BIDs have been a powerful tool for civic renewal and have capacity that has yet to be fully exploited. In my experience, they have been most effective around the country when city governments have partnered with BIDs to encourage them to take carefully calculated risks and provided them with the resources required to catalyze improved quality of life and increased economic activity.

The Crain’s New York Business cover photo of Dan Biederman, founder of Bryant Park Restoration Corporation, Grand Central Partnership and 34th Street Partnership BIDs