26. BIDs Face the Recession

A worldwide recession is in place and few expect it to subside quickly. In business improvement districts (BIDs), some businesses have already been lost and more closures are expected. Footfall has dropped, and money for priority projects is diminishing. Crime rates (or at least fear of crime) will rise; the FBI attributes the current rise in bank robberies to the recession. There are more panhandlers on sidewalks. The International Council of Shopping Centers predicts that 150,000 stores will close this year and that 15 percent of the existing retail base will be gone in two years.

Yet all is not lost. There are many actions BIDs and other downtown organizations might consider taking to maintain district profitability as much as possible:

1. Public space maintenance. Where sidewalk cleaning is already in place (and actually needed), it should be continued. As ever, though, conserve BID revenues by subjecting cleaning programs to tough tests: Are current levels essential? Will these funds help meet important economic goals? Could some of these funds be applied to more urgent needs?

2. Lighting. Making sidewalks measurably brighter helps boost crowds and reduces pedestrian fear. Public lighting is important, but so are bright store and restaurant windows.

3. Closed circuit television. Long a feature in Britain, CCTV is being adopted in some small U.S. BIDs to protect parked cars, real estate and to help night businesses. Knowledge of its existence is believed to deter crimes and provide pedestrian reassurance. Signs are usually necessary. Both districts in Dublin, Ireland, have extensive CCTV coverage.

4. Communication. Marketing messages should subtly underscore that the district is safe. Pictures of uniformed personnel and CCTV cameras in newsletters is one device that helps without mentioning negative trends. Give even greater emphasis to the theme that the district is successful and popular. Stay in regular contact with owners and tenants and especially consumers. Ask what is bothering them.

5. Reassure employees. Set up systems to escort employees to their cars after dark. If they are frightened, they will tell others. Unfavorable word-of-mouth reputations proved devastating prior to BIDs.

6. Sell the nights. Put more activity on the sidewalks after work and in the evenings when shoppers are needed. Music and events such as First Friday art gallery tours can help.

7 . Recruiting. Reconsidering the effectiveness of the current business recruitment strategy is more important now than ever. More incentives, financial and marketing, will be needed to land strong new businesses and to focus real estate agents on the district’s advantages (copy the shopping malls in this respect). Economist David Milder urges keeping sights high and not settling for filling space with marginal enterprises.

Fill empty windows with eye-catching displays for active stores, public events and BID activities. Shuttered businesses lower morale and lead to defeatism. Encourage more residents to reside in the district, building a stronger consumer base among those who will spend the most locally.

8. Cooperation. Where maintenance funds are not equal to the challenges, organize more voluntary work by residents and employees. Partly to keep spirits up (this could be a long one), make sure the charters for committees and the board of directors include goals leading to more prosperous conditions. The best ideas and most of the work will come from those who are paying rents, salaries and taxes.

    • Examples of Recession Projects:
    • New Jersey’s Red Bank River Center organized a half-day working meeting (“the Recession Summit”) to bring together the best ideas from economists and business, government and nonprofit leaders who know the local economy; 450 people attended. One result was a year of free parking on Saturdays and Sundays in municipal lots. The BID and the borough are developing a common agenda.
    • The Downtown Yonkers, N.Y. , BID has organized a series of “Sunrise Semesters” for local businesses on topics such as “Banking for Your Small Business,” “Curb Appeal, “Ecomania,” and “Secrets of Internet Marketing.” Similarly, the Roxborough, Pa., BID is sponsoring a series of meetings in which experts, in a recent instance, advise small business operators regarding how to reduce energy costs.
    • D.C.’s Mount Vernon Square district is working hard to connect local residents with jobs in the growing retail sector there, sponsoring job fairs and training.
    • Artists in Philadelphia’s South Street BID neighborhood are decorating the shop windows of vacant stores with paintings, sculptures and other creations.
    • The Ardmore, Pa., BID is pursuing a list of priority actions by the district and by individual properties and businesses.
    • The Downtown D.C. BID published a Leadership Paper comprised of “concrete steps to minimize the adverse effects of the global financial and economic crisis and maximize recovery.” A dozen heads of large BIDs have developed an action agenda comprised of the most promising steps BIDs have taken .
    • One upscale district negotiated a previously unheard-of dinner price ($19.95) during Restaurant Week.
    • One BID-in-the-making has launched a CCTV system to help restaurants after dark.
    • In England, local authorities are asking for additional powers to reuse empty shops.
    • One pending U.S. BID is framing its draft ordinance to authorize the agreed-upon assessment (15 percent of property taxes) to start only when the recession recedes.

9. Plan ahead. Are there prospects for BIDs to benefit from anti-recession stimulus projects? For projects that could be made real through tax increment financing?

10. Cost sharing. Look for opportunities gradually to share costs with local government for services most akin to municipal ones – e.g., landscape installation and maintenance – to free up funds for activities like business attraction and marketing that few municipalities do (or do well) and that the BID usually must carry alone. The economic circumstances are changed, so priorities should be reconsidered.

A recent Philadelphia Federal Reserve District study indicates that places that have an abundance of experience opportunities – that is, attractive things to see and do – perform better economically. Amenities-based growth fits comfortably with BID investments in improved quality of life. A decade or more of targeted money, attention to appearances and a new reputation for safe streets suggest that most districts will not revert to the desolate conditions of yore.

BIDs that focus on business profitability and property value enhancement are well prepared for this protracted crisis. Cutting out marginal expenditures and working harder on the core goals should leave districts – city, suburban or small towns – well poised for more favorable opportunities.

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