The American Planning Association (APA) New York City Chapter recently hosted an event entitled “Small, Medium and Large: How Main Street Management by BID’s Affect Different Size Neighborhoods!” The event was organized in response to the Crain’s article about BIDs that was published last fall – about which I wrote at the time (http://www.theplacemaster.com/2016/09/26/in-defense-of-bids/). On the panel were a city representative and four BID managers – three of them from smaller BIDs.
I attended and felt old (and was the oldest person in the room!). The BID world has changed a lot in the last twenty-five years. When I started working for the midtown Manhattan BIDs, there were a grand total of around ten BIDs. Today there are over seventy. While the first few BIDs were of relatively modest capacity, the trend at the time was to take the concept of downtown management organizations onto a larger scale. New organizations of with substantial resources were being established in the most-dense commercial areas. Now the trend is for the proliferation of small organizations with limited staffs and funds of under $500,000 – which, according to the presentation at the event is about the current mean BID size. In the mid-90’s, since there were fewer than a dozen BIDs and half of those were the of BIDs with budgets over $5 million (which remain the same group), the BID world in New York was all about those larger organizations: Grand Central (GCP), 34th Street, Bryant Park, Times Square and the Downtown Alliance.
Street and Avenue,” Richard Haas, New-York Historical Society.
The great concern expressed by the panelists about the Crain’s article made me smile! At first, in the early 90’s BIDs got a torrent of positive press, particularly after the reopening of Bryant Park in 1992. But in 1995 the tide turned. Below I have posted links to a slew of critical New York Times stories about BIDs that appeared between 1995 and 2002 (that is nowhere near complete). The onslaught was brutal and constant, and not just in the Times. The underlying policy concerns were similar to the ones raised in last year’s Crain’s article. However, the bottom line was, and is, that the critical assumptions and projected potential problems were and are ill-founded.
On or about 1992, Dan Biederman was visited by two self-appointed “advocates” for the homeless. They demanded that Grand Central and 34th Street Partnerships take the hundreds of thousands of dollars they had budgeted for homeless services and turn those funds over their own organizations. They threatened endless “trouble” if their demands were not met. Their argument was that a “business” organization had no place providing services to the homeless. In fact, Grand Central Partnership had established its own innovative social service affiliate that ran a drop-in center adjacent to Grand Central Terminal under contract with the City. The center provided three meals a day and a place indoors, open 24 hours, where people could sit. In a very short period of time the 600 or more homeless individuals had left the Terminal and its environs and most had migrated to the drop-in center – a boon to the perception of safety on East 42nd Street.
But make trouble the homeless advocates did. First, in 1995 they filed a lawsuit alleging that GCP social service participants in its job readiness program were not being paid in compliance with Federal and State wage and hour laws. They were represented in this claim by one of the city’s most powerful law firms. Then the storm hit. In the spring of 1995 the Times ran a 5000 word investigative report saying that three former program clients claimed that they had been encouraged by GCP staff to beat up other homeless people in order to force them out of public spaces and bank ATM vestibules in midtown (http://www.nytimes.com/1995/04/15/opinion/strong-arming-the-homeless.html). The story grew legs and dozens of follow-up stories were printed seriously damaging the reputations of the Partnerships and the BID program more generally. Both the District Attorney and the Federal Department of Housing and Urban Development (a funder of the social service program) began investigations.
Another wave of critical stories arose out of an “investigation” into BIDs by the City Council. The report purported to look into the “tremendous power” that BIDs allegedly wielded and their lack of responsiveness and transparency (the findings of that report can be found here: http://tenant.net/Oversight/BID/bid-4.html). Much of this was focused on the midtown BIDs led by Biederman – who created the model that most other BIDs in New York City and across the country copied in establishing their programs. Elected officials and journalists were obsessed with Biederman’s salary at the time. In retrospect, many folks resented our visibility and the success of our work in revitalizing Bryant Park and the rest of mid-town. Biederman was outspokenly independent of government and was driven by a results-oriented approach that was meritocratic and essentially apolitical. This, to say the least, was often not well received by government officials and the leaders of other non-governmental organizations engaged in similar work. Additional agencies and elected officials piled on, resulting in other audits and “investigations.” (http://comptroller.nyc.gov/reports/audit-report-on-the-operating-practices-and-procedures-of-the-grand-central-partnership-business-improvement-district/) Our results spoke for themselves. A restored Bryant Park became a symbol of the New York renaissance. The areas around Grand Central Terminal and Penn Station became clean and safe, with taxi hustling eliminated and panhandling drastically reduced. But we were the metaphorical nail sticking up that got hammered down.
Also, occupants of an apartment building added to the Grand Central district in an extension, filed suit challenging the imposition of the BID assessment on residents. It turned out that one of the apartment owners was a tax attorney! The case went up to the Federal Second Circuit Court of Appeals, which held in GCP’s favor. (http://caselaw.findlaw.com/us-2nd-circuit/1281539.html) But the City Council, followed by the Department of Business Services (now “SBS”), made it city policy not to include residential buildings in BID assessments thereafter.
Finally, another storm arose in 1999, when Mayor Giuliani began a campaign to split up the three BIDs run by Biederman. There were many theories of where this came from. The precipitating event was a request by GCP to close a block of Park Avenue to traffic in order to create public spaces adjacent to the new Pershing Square Café. An appeal for reconsideration by GCP after a deputy mayor had denied the request was badly received by the Mayor. A previous meeting to ask for reconsideration of a Mayoral decision not to allow the issuance of a tax exempt borrowing to finance capital improvements in extensions to the Grand Central district had also been poorly received. I have also long suspected that the scion of a New York real estate family, who had a reasonably close relationship with the City Administration and whom Biederman had removed from the GCP board after some actions by his representatives at board meetings that Biederman found disruptive, also played a role in the Mayor’s thinking.
William Glackens, Far From the Fresh Air Farm: The Crowded City Street, with its Dangers and Temptation, is a Pitiful Makeshift Playground for Children 1911, Museum of Art | Fort Lauderdale, Nova Southeastern University
That situation ended when the GCP board voted out the BID’s officers, including Dan and me. The officers were replaced with individuals with the Mayor’s trust. The City ordered a forensic audit be performed at GCP, with the implication that something untoward had been going on there. I believe that this marked the end of the era of any BID independence of city government. After that, BID boards and staff became more risk averse and for the most part the larger BIDs stuck to the well-trod path of providing ancillary security and sanitation services to their districts. The smaller BIDs became even more reliant on the Department of Small Business Services; particularly after it began a program of providing discretionary programmatic grants to BIDs with small budgets.
Ultimately, Biederman’s BIDs were found to have operated in an exemplary fashion by just about every entity that looked into it. Reports on the GCP social service program by an expert on homeless services retained by GCP and by the Federal Department of Housing and Urban Development found no evidence of abuse of homeless people by GCP staff. In fact, the HUD study (obtained after extensive Federal Freedom of Information Act litigation [http://caselaw.findlaw.com/us-2nd-circuit/1020626.html]) found the program design to be “exemplary”. No evidence of any injured homeless people was ever found – no police reports, no hospital records and no homeless person ever came forward to say they had been injured (the allegations in the Times story was by people who were plaintiffs in the wage and hour law suit who claimed that they had assaulted other homeless people). The wage and hour lawsuit was settled after an adverse judicial ruling on whether the trainees in the program were “employees” for purposes of the wage and hour laws (http://www.leagle.com/decision/19981501997FSupp504_11444/ARCHIE%20v.%20GRAND%20CENT.%20PARTNERSHIP,%20INC.). None of the audits found any evidence of anything other than excellent stewardship and transparency by GCP. Nothing was ever heard of the 1999 forensic audit.
So all of this is to say that the issues raised in the Crain’s article were litigated in the press and the court of public opinion twenty years ago at a fever pitch – and the number of new BIDs created escalated, nonetheless. The BID world in New York City is now dominated by the large number of smaller BIDs, rather than by the small number of large BIDs. No large BID has been formed in years – except for the effective merger of the smaller Downtown Brooklyn BIDs into the Downtown Brooklyn Partnership. Dan Biederman continues to run the Bryant Park and 34th Street BIDs.
At the APA meeting, during the question period, it was stated by audience members that the level of professionalism of the leadership at the smaller BIDs and at SBS has improved in recent years. It struck me at the session that BID work at the smaller organizations is now seen as desirable by planning school graduates. The SBS representative stated that the recent negative press coverage was something the agency regretted and that it was going to seek to avoid in the future by assisting the BIDs in steering clear of controversy.
But it also seemed evident that the era of big, ambitious BIDs, working independently of (but in partnership with) government is over. The level of innovation and high quality service delivery at the BIDs run by Biederman is to his great credit. He stuck to his high standards and innovative programming despite the journalistic and political onslaught, with an important positive impact on midtown. In retrospect, it was an exciting time and place to work. It was a privilege to have had the opportunity to make a demonstrable difference in the quality of life and economic vitality of the city – beginning in a rather dark time (that is difficult to conjure up now) in the city’s history.
Some Times stories from the period discussed:
http://www.nytimes.com/1995/04/14/nyregion/ex-outreach-workers-say-they-assaulted-homeless.html
http://www.nytimes.com/1995/04/16/nyregion/hearings-set-on-claims-of-beatings.html
http://www.nytimes.com/1995/04/19/nyregion/district-attorney-to-review-homeless-abuse-by-squads.html
http://www.nytimes.com/1995/06/10/nyregion/private-review-of-homeless-program-is-planned.html
http://www.nytimes.com/1995/07/12/opinion/abuse-of-the-homeless-proves-costly.html
http://www.nytimes.com/1995/08/18/opinion/l-partnership-has-done-much-to-help-homeless-409695.html
http://www.nytimes.com/1995/11/06/nyregion/claims-of-homeless-abuse-lead-to-program-revisions.html
http://www.nytimes.com/1995/11/08/nyregion/for-troubled-partnership-a-history-of-problems.html
http://www.nytimes.com/1996/09/14/nyregion/city-prohibits-borrowing-by-improvement-districts.html
http://www.nytimes.com/1998/04/02/nyregion/control-sought-on-districts-for-businesses.html
http://www.nytimes.com/1998/07/31/nyregion/an-admirer-of-giuliani-feels-his-wrath.html
http://www.nytimes.com/1998/08/01/opinion/the-grand-central-bid-war.html
http://www.nytimes.com/1998/09/24/nyregion/business-group-fails-to-mollify-giuliani.html