Boston's first BID?

10/1/2009 Uncategorized


By my assessment, Boston is the only major city in the US without a BID, or Business Improvement District. New York City has 64. Los Angeles, Chicago, Houston, Philadelphia, Atlanta, San Francisco, Seattle, and Washington, DC all have them. A brief history lesson shows you that Boston has tried on multiple occasions, but that the infamous Boston politic machine has had a big hand in the failed attempts.

That being said, Downtown Boston (see attached image for a map of the BID area) is giving it another run. The BID campaign has started and needs our support.

A BID is a public-private partnership in which property owners in a defined area (the BID district) pay an additional tax or fee to fund improvements within the district’s boundaries. The fee is initially used to provide basic services such as cleaning streets and sidewalks, emptying trash cans in a timely manner, and performing social outreach (particularly to homeless populations). Once basic advances are made (it usually takes 2 or 3 years to really power wash all the sidewalks and remove all the graffiti), the BID looks to capital improvements, beautification efforts like flower boxes, and large scale marketing efforts to help sell the area to businesses, residents and tourists alike. The services provided by BIDs are supplemental to those already provided by the City. Successful BIDs have great teamwork between the public and private entities.

Reasons for BIDs are many, but increased property value is high on the list, particularly for property owners who are being asked to pay out of pocket. Take the owner of a retail space; nicer streets and a destination district not only mean the value of the property stands to increase, but that they now operate in a place customers want to visit (a destination) and that is associated with shopping (the neighborhood has a brand).

The rules of play for BID’s are fairly straightforward. In Massachusetts, 60+% of property owners in the BID area must sign a petition in support of the BID. Those signatures must in turn represent 50+% of proposed revenue production within the BID. Once in place, the Boston BID will be good for 5 years, at which point the process starts over.

The actual formula for calculating the BID tax doesn’t appear to be set yet, but looking at other cities, think along the lines of either 1/3 of 1% of assessed property value or in the range of $0.15 – $0.20 per gross square foot. For example, if your building is worth $1.5M, you’ll be looking at an annual BID tax in the neighborhood of $1,500.

Up to this point, this all seems nice and good. A little bit of money from a lot of people goes a long way toward improving the public realm. I’ll take a page from Tim (Love’s) humor book and say that being against BIDs would be like being against pizza and rainbows. Who wouldn’t sign up for this? The return value is clear and the risk minimal.

This is where Massachusetts politics once again rears its ugly head, however. Unlike the other 49 states in the country, Massachusetts has included an “opt out” clause for its property owners. Put simply, if the BID legislation passes based on the signature and revenue requirements outlined above, the state is required to send a letter to all property owners in the BID area, giving them 30 days to opt out of paying the BID fee. Any reason counts; it could be that they don’t like BIDs, that they’ve had a rough financial year, or that they would prefer to reap the benefits of other peoples assessments. Should I pay or should I get a free ride?

The fact that Massachusetts is the 1 state in the country with an opt out clause makes the Downtown Boston BID campaign so important. Property owners need to buy into the cause, both literally and figuratively. I expect to see increased education on and campaigning around the BID through the winter, so keep your eyes and ears open and lend your support.

– Billy