7. Gotham Gets Civil

In a country that largely has ceased to think of itself as urban, New York City remains an urban icon, incomparable in its scale and density. There is, for example, more office and retail space within a fifteen-minute walk of Broadway and 42nd Street than in any other area of similar size in the world. And that accounts for only one segment of one of New York’s five boroughs. Twenty million visitors from around the world come to Times Square each year. Each day, 1.5 million people pass through the Times Square business improvement district (BID). If America is down on cities, why do so many people come to such an intensely urban place?

Despite all the congestion (Times Square and other BIDs in central Manhattan record peak pedestrian volumes of up to 6,000 people per hour), New Yorkers believe Gotham is becoming a better place to live and work. Earlier this year, the New York Times puzzled over the reasons for these positive survey findings and decided that many were due to the decline in crime and the evident willingness of Mayor Rudolph Giuliani’s administration to crack down on “quality-of-life” offenses. The Times also credited the widespread existence and evident success of BIDs, now operating in 40 of the city’s commercial centers. BID-financed clean sidewalks, omnipresent supplementary security personnel (SSP), and more attractive streets are now so widespread that even traditionally skeptical New Yorkers acknowledge the improvements.

New York City has had BIDs for more than two decades. The BID birth rate has accelerated considerably since the state passed general enabling legislation, the city created an administrative unit to guide BID formation, and the successes of each new BID generated interest in other commercial areas with similar needs. New York may be large and costs may be high, but not all of its BIDs are multimillion dollar enterprises (see Figure 1). The BID movement has long benefited relatively small commercial areas, of which the city has so many that it is hard to imagine how many BIDs there will be in a decade or two.

A BID is a legal device by which commercial interests within an area can band together, plan business services and/or public improvements considered important to their economic vitality, and share costs through a tax or assessment paid by all. (The concept of “benefit district” can be traced to 18th-century New York law.) State laws vary on how costs may be shared, whether the BID is run by municipal authority or a nonprofit corporation, and other considerations, but the concept is comparable in legislation adopted throughout North America. (See “Betting on BIDs” in the July 1994 issue of Urban Land and “Are BIDs Working?” in the January 1997 issue.)

The growth of BIDs in New York City is all the more remarkable since the statute makes no effort to speed or simplify the planning and approval process. Business groups typically face a long gestation, although the city’s department of business services lends a hand throughout, producing results and, with rare exceptions, remarkably good press. About $48 million is being spent by business and property owners in four boroughs (only Staten Island has no BIDs) as a result of plans initiated and designed by private sector leaders. The typical assessment is in the range of $0.12 to $0.20 per square foot, somewhat higher than in other U.S. cities.

New York law authorizes nonprofit corporations to manage BIDs. While BIDs can engage in income-producing enterprises, the backbone of each commercial area’s program is the assurance that there will be predictable income based on an assessment formula that in turn is based on the assessed value of each property. Decisions are made by boards of directors, principally reflecting the interests of those who pay most of the assessments, as well as statutory guidelines.

This article looks at six well-established BIDs, including the city’s oldest, that illustrate the diversity of investment priorities as well as common activities.

Fulton Mall

Fulton Mall is one of downtown Brooklyn’s major retail districts. It serves 2.3 million borough residents plus 80,000 office workers and college students and faculty. The Fulton Mall Improvement Association was formed more than 20 years ago as part of an agreement among the city, property owners, and the federal government in connection with federal funding to create a major transit and pedestrian facility along a large section of Brooklyn’s Fulton Street. The establishment of an assessment-based system to maintain the urban environment and historic retail center was an important consideration in the decision to invest heavily in improving its subway, bus, and pedestrian facilities. The oldest of the city’s BIDs, Fulton Mall was created by a special act of the state legislature because New York then lacked a general enabling legislation. (The city categorizes Fulton Mall as a special assessment district.)

The Fulton Mall Improvement Association, the BID’s management entity, is headed by Executive Director Jill Kelly. It contracts with a private firm for street-sweeping services seven days a week. In the spring and summer, the crew repairs, refurbishes, and paints the mall’s street furniture. The association also plants annuals and perennials within the service area each year, in keeping with its goal of a maintaining a “green” mall. (A private contractor cares for the area’s plants and trees.) The association is responsible for day-to-day upkeep of the sidewalk brick pavers and for snow removal.

The association is implementing a three-phase security program, including a street visibility/foot patrol program that employs retired law enforcement personnel; nighttime security services provided under contract by a security firm to patrol the district in a vehicle with one armed security officer; and surveillance cameras, which will be phased in over several years, beginning this year with six remote-controlled cameras.

The association also engages in print advertising, radio advertising, and special projects for the local community. It produces a quarterly newsletter and a map of the area’s retail stores.

MetroTech

The MetroTech BID represents one in a long series of steps to reinforce Brooklyn as the city’s third downtown, after midtown and downtown Manhattan. (See “Downtown Brooklyn: Turning the Corner?” on page 28.)The idea arose in the 1980s from Polytechnic University’s need for an attractive environment for its students and faculty and for research facilities modeled after those in Silicon Valley. Now a $1 billion, 5 million-square-foot development of new and renovated buildings, MetroTech is seeing the completion of a 384-room Marriott hotel. Brooklyn’s MetroTech Area District Management Association serves 25 city blocks, or approximately 60 acres, including a 3.3-acre park surrounded by MetroTech Center, a high-tech office and educational complex.

The group contracts with a private firm to provide supplemental sanitation services. A five-member sanitation crew cleans the district seven days a week, sweeping sidewalks and street edges, removing stickers and posters from lampposts and street signs, clearing intersections and catch basins of snow, and providing seasonal tree maintenance and continuous graffiti removal. In addition to emptying city litter baskets, the contractor maintains and empties 33 additional “Smartbaskets” mounted on light poles.

BID special events bring area constituents to MetroTech and encourage MetroTech employees to visit nearby educational and cultural institutions and merchants. Environmental enhancements funded by the group include additional streetlights, trees, and storefront improvements. The BID also collaborated with architecture students to recommend design changes for low-cost improvements to streets and stores. Other activities include an adopt-a-block program with area corporations and the addition of signage and other design elements.

Through a grant from the City University of New York, MetroTech cosponsors small business workshops. It also helps property owners attract new businesses, with the goal of diversifying retail to better serve the needs of workers, students, and shoppers. BID marketing also strives to build awareness of the BID’s retail offerings beyond downtown Brooklyn and aids merchants through advertising, promotional events, and other activities.

Michael Weiss, director of the MetroTech Area District Management Association, is comfortable with providing “the basics”-safety and sanitation-but says that “the best is yet to come:’ More development is coming to the area, along with more jobs and more people. Weiss sees an important future for the area as “a 24-hour-a-day, seven-day-a-week” center.

While there are elements of competition among some of the Manhattan BIDs, MetroTech and Fulton Mall have collaborated on a marketing program, jointly planning and financing business attraction materials.

Downtown/Lower Manhattan

The Alliance for Downtown New York, Inc., a not-for-profit corporation led by President Carl Weisbrod, brought the BID movement to Wall Street. As is appropriate in the world’s premier financial capital, the BID, formed in 1995, has one of the largest assessment-based budgets in the country-almost $10 million, with an assessment charge equal to roughly $0.09 per square foot. Its mission includes advance planning for transportation improvements and encouraging conversion of older commercial towers into residential units.

Lower Manhattan, home to the city’s major insurance and financial companies, also is a historic landmark area that is evolving into a residential community. (See “In the Public Interest: Reviving Lower Manhattan” on page 92.) The BID’s sanitation program includes a 40-person workforce that operates seven days a week, sweeping curbs and gutterS, emptying trash receptacles, removing posters, and cleaning sidewalks and catch basins. The security program has a brightly liveried team of 40 more employees, whose main purpose is to provide visitors, residents, and workers with a heightened sense of security. The force also offers directions and other public assistance.

Promotion and marketing focus on strategies to promote lower Manhattan, to retain existing businesses, and to attract new businesses. The BID also advocates for a variety of private and public projects designed to enhance the area and has contracted with the John Heuss House to provide outreach services to homeless individuals.

The alliance also helped conceive and pushed for adoption of the Mayor’s Lower Manhattan Economic Revitalization Plan, tax incentives aimed at promoting investment in residential use of obsolete office buildings. A full-time Benefits Hotline helps property owners and prospective tenants understand and take advantage of these programs. Finally, the BID is conducting a study of the area transportation system and operates a free jitney service that connects the World Trade Center, Battery Park, and the South Street Seaport.

The Alliance for Downtown New York, one of the city's youngest BIDs, operates a free jitney service as well as a sanitation program with a 40- person workforce.

125th Street

Like everything else in New York, problems can be of monumental proportions. Central Harlem’s 12Sth Street is the main shopping district for local residents. When the 125th Street BID was formed less than three years ago, there were 1,100 sidewalk vendors in only three blocks, producing congestion rivaling that of rush hour at the city’s bridges and tunnels.

Barbara Askins, the BID’s director, worked through a thicket of hostility among vendors. Her program emphasized positive remedies along with regulation. The city created an open-air market on 116th Street with sufficient critical mass to work economically for vendors. “We looked at vending as entry-level entrepreneurship:’ Askins says, noting that some former street vendors are now operating stores in rented facilities, paying rent and taxes.

The BID was launched during a period in which 125th Street was being compared unfavorably with other commercial centers in New York City because of the amount of trash on the sidewalks. The group quickly got the sanitation problem under control. Under contract with the BID, a private firm now provides street and sidewalk sweeping, trash receptacle maintenance, and snow removal. Sanitation crews work seven days a week.

The BID has an ongoing campaign highlighting area attractions in conjunction with the Harlem Commonwealth Council, the Harlem Community Development Corporation, the Apollo Theater, and other local institutions. Banners display the BID’s new logo, and the group produces a newspaper highlighting businesses and business-related issues.

Security lighting is planned at 81 locations, with fixtures installed on 12sth Street buildings between Morningside and Fifth Avenues. The BID, like small BIDs elsewhere, also decorates the area’s streets and buildings with lights during the winter holiday season and hosts children’s programs and activities sponsored by local businesses and organizations. “We have also created what we call our own mini-Bryant Park,” Askins notes, referring to the midtown park redesigned, maintained, and operated by its own BID (see “Bringing Back Bryant Park” on page 112). Harlem’s oasis is a cleaned up ,and active plaza that had been largely abandoned.

With a budget of only $275,000, this is one of New York City’s smaller BIDs; nevertheless, it shows how such a group can solve problems of great local importance. The assessment formula includes factors such as street frontage and assessed valuation. Askins says that other areas in Harlem have expressed interest in starting their own BIDs based on 125th Street’s experience.

14th Street Union Square

Manhattan’s 14th Street/Union Square area has emerged as one of the leading locations for retailers, health care, higher education, off Broadway theater, and restaurants. Led by acting director Jim Whelan, the 20-year-old 14th Street/Union Square District Management Association points with pride to the fact that its swift removal of litter, debris, and graffiti has produced the highest ratings from the mayor’s office of operations. Sanitation services are provided under contract seven days a week. The BID also provides sanitation services in Union Square Park and maintains 55 BID-installed trash receptacles throughout the district. It collects an average of 110 trash bags each day-amounting to 40,150 trash bags and 1.2 million pounds of garbage a year-and also removes snow from crosswalks and catch basins.

Under BID contract, Partners in Grime removes graffiti from property facades, store gates, and street furniture twice weekly. The contractor services 204 sites and removes approximately 25 pieces of graffiti on each visit. The BID also works closely with the New York City Police Department to identify different types of graffiti, understand the best methods of graffiti removal, and target trouble spots with heightened law enforcement.

The BID sponsored the kick-off of “NY ’95 Restaurant Week” in Union Square with the creation of the world’s largest salad and advertisements profiling the neighborhood’s many restaurants. The BID and the local development corporation (LDC) present an annual economic development symposium to keep residents, businesses, and members of the real estate industry abreast of developments in the area. The BID and the LDC also present a series of musical performances in Union Square Park each summer.

Times Square

Five years ago, Times Square was a striking example of all that had gone wrong in U.S. cities. Con artists, pickpockets, drug dealers, and prostitutes dominated the sidewalks. The area had become an epicenter of x-rated movies and pornography stores where anything and everything was for sale, including the rights to the famous ball on the old Times headquarters building that signaled the arrival of each new year. Crowds at this annual bash were diminishing as the area’s reputation sank.

Today, while redevelopment is still a work in progress, the progress has been impressive. After the BID-managed public environment improved, private investment quickly followed. (See “The City as Stage: Entertaining Retail Meets Manhattan” on page 88.) Gone are the sidewalk con men, illegal peddlers, trash, and fear. Civility, albeit a bumptious civility, reigns.

It is not excessive to suggest tnat Times Square is America’s number-one downtown. In Times Square, one can find virtually all of the assets, problems, and programs encountered in BIDs elsewhere. The Times Square BID was organized in 1990 by a group that included Arthur Sulzberger, Jr., deputy publisher/chairman of the New York Times, to address quality-of-life issues that had long plagued the area. The planning group was formed just as the state government condemned the massive 42nd Street redevelopment site, planning for which had been underway for a decade. The timing could not have been better. But first, people on the sidewalks had to feel safe.

Toward that end, BID President Gretchen Dykstra employs 45 uniformed, radio-equipped, and unarmed public safety officers (PSOs) plus eight administrative and supervisory personnel. The $1.8 million security budget averages $51,000 per block patrolled. The force is primarily a foot patrol, although the unit also uses an electric Cushman golf cart, a bike, and a jeep. “We don’t employ people to fight crime;’ Dykstra explains. “That’s the police department’s job.”

Dykstra is a strong believer in picking and training her own PSOs, producing a combination of skills that she says she could not expect to find among off-duty police or private security officers. She has found through experience that the best supervisors are retired police officers whose work was close to the street. Former NYPD Lieutenant Robert Esposito currently runs the security program as well as sanitation services. In addition to handling and reporting emergencies, much of the PSOs’ time is spent answering questions about Times Square facilities, stores, hotels, and restaurants.

The Times Square BID began providing tourism services in summer 1992 with two sidewalk steamer-trunk kiosks. Thanks to the Urban Development Corporation, BID staff later established a small, highly visible tourist center in an old cigar shop at the corner of 42nd Street and Seventh Avenue. With some support from the transit authority, the center stayed there until September 1994, when it was moved to the Harris Theater and then to the Selwyn Theater. Soon it will be located permanently in the lobby of the Embassy Theater. BID staffers in the visitor center answer an average of 19,000 questions per month; PSOs answer another 57,000 street-side inquiries.

Several additional BID-supported measures also contributed to favorable public approval ratings. These include initiation of “Operation Affidavit” (in conjunction with the NYPD, this allows police officers to arrest unlicensed peddlers based on affidavits filed by BID officers; illegal peddling is down by 85 percent since 1993); increased efforts to discourage three-card monte games (resulting in an 80 percent decrease between 1993 and 1995); and a computerized watchman system at 45 locations, which documents twice daily visits by PSOs and records street and building conditions requiring immediate attention.

Much of the BID’s economic development function consists of keeping track of performance and potential. Data published include the big-picture items (there are approximately 5,000 businesses and 400 properties) and smaller indices (at least 1.5 million snapshots are developed at Times Square one-hour processing shops each year). The group’s promotional materials and public relations activities are among the most attractive and creative of all North American BIDs’. With $130,000 allotted annually for printing, design, and promotion and $150,000 for tourism expenses, the organization makes sure that the world knows about its assets, new and old.

When the BID began operations, New Year’s Eve in Times Square was becoming less and less of a grand event, and the BID board instructed staff to work to save and enhance the tradition. Last year produced the largest New Year’s Eve party in history; drawing massive crowds of out-of-towners who spent millions at local businesses. More than 225 television stations nationwide picked up a pre-event satellite video news release the BID had produced about the new ball and the new Times Square. Dick Clark’s TV ratings on New Year’s Eve included 3 million more households than had tuned in the previous eight years. Mayor Giuliani participated by signaling the lowering of the newly refurbished ball and later hosted a party in the BID offices. An economic impact analysis showed a $39.5 million advantage to the city from the event.

Some-Dykstra included-point out that the Times Square BID is not the sole reason for the area’s recent renaissance. She is quick to note that New York’s revolutionary changes in police tactics and priorities have made the difference in the area’s substantial reduction in crime and credits Mayor Giuliani for his leadership in this regard. She recalls that the midtown enforcement office has been hammering away at code violations for a quarter century. ”And, of course,” Dykstra notes, “the financial and political will of the state, city, and in particular’ the 42nd Street Corporation has been key.”

Still, had Times Square remained in its former state, it is hard to imagine that Disney would have leased its “100 percent” corner or that 42nd Street would attract crowds for Grated films and legitimate theater. While the reestablishment of middle class norms of safety and cleanliness may not be enough to draw vast crowds, it is equally hard to imagine that they would have returned without the groundwork done by a well-run BID.

The Times Square BID is a pioneer in maintaining standards that are not merely acceptable to large crowds but add to the attraction of the place. The group knows what it takes to build crowds, capture the tourism dollar, and still pay attention to its other constituencies’ including major office building managers and tenants. The Times Square BID also has been an innovator, developing solutions specifically geared to solving its own problems. The Midtown Community Court is a prime example. When BIDs want more police attention to quality-of-life crimes like sidewalk gambling, one major point of resistance is the time required for police to process these relatively minor offenses. Creating the court dealt directly with that obstacle. BID board members were instrumental in developing the project, which now is being replicated worldwide, and the BID made the largest private contribution to it.

An indication of how far the Times Square BID has progressed is suggested in a recent newsletter: “Happily, it seems almost unnecessary to speak about the quality-of-life issues that were the very reasons for the BID’s establishment.” Once the sidewalks are clean and fear is under control, however, these hitherto impossible accomplishments (here and elsewhere) begin to be taken for granted.

The best BIDs, however, already have moved on to the next set of impossible accomplishments. In Times Square’s case that includes the new visitor center, a master plan for dramatic improvements in the public spaces at the intersection of Broadway and Seventh Avenue, a bigger and better outdoor “Taste of Times Square” event on 46th Street, and renewed retail leasing along long-depressed segments of Eighth Avenue.

Lessons from New York

Few cities have any governmental mechanism for dealing with BIDs. New York’s Department of Business Services sees its role as advising and guiding, rather than proselytizing, and has amassed a commendable record. There have been a few problems, and these have earned the investigatory attention of the New York Times and the city council. In the end, however, the hullabaloo about someone’s high salary or whether one BID’s staff was too aggressive in removing sleeping people from ATM locations fades in comparison with the accomplishments that are apparent to most New Yorkers.

The heavy investments in cleaning and maintenance common in New York City do not reflect comparable needs among BIDs elsewhere because few have the foot traffic that requires it. But sidewalk cleaning (legally the responsibility of the property owner) is typically the largest single expenditure for most large BIDs.

Like others in the United States and Canada, New York City BIDs identify their concerns less as crime prevention and more as reassurance and hospitality. Thus, staffing is less likely to take the form of armed, off-duty police officers or personnel from a security firm than of uniformed, radio-equipped “ambassadors,” hired and trained directly by the BID.

Visitors to New York City may not be able to see the missing trash or declining crime rates, but BID services directly affect tourists and business visitors throughout the city’s commercial areas. There now are huridreds of easily identifiable people trained to be friendly and helpful to guests. With knowledge, skills, and job responsibilities not unlike those of hotel concierges, these uniformed ambassadors have brought hospitality to the places where it was most evidently missing, the sidewalks of New York.

In the 1970s and 1980s, many observers believed that adverse quality-of-life perceptions by employees and management contributed significantly to corporate outmigration. The Grand Central Partnership BID emerged from the Mobil Corporation’s publicly expressed disgust with the filth and crime in the area. If negative conditions then drove firms away, it is not unreasonable to assume that the positive results of BIDs now encourage companies to stay and grow and tourists to return.

The appeal of BIDs to the property owners and commercial tenants who pay the bills starts with the conviction that there is no other way to produce these results. The second appeal is that the costs are negligible (typically $0.12 to $0.20 per square foot where rents are $25 to $65 per square foot). Finally, those paying the assessments control the funds, which are used wholly for business improvement measures.

Perhaps the most important contribution of the BID movement in New York City, as in many other urban centers, is the change in attitude. The culture of business leaders complaining about conditions they believed they were helpless to change has been replaced with the widespread conviction that the future is in their hands. Nowhere is that more evident than in New York City, where every BID, having achieved at least one impossible goal, is energetically pursuing others.

At some point, New York City may run out of additional business district leaders who are willing to undertake the time-consuming task of framing a plan for business improvement. The steady rate of BID growth, however, suggests that many building and business owners still see BIDs as the only method available to increase business profits and property values beyond the level they can attain as individual entrepreneurs. Time will tell whether ultimately there will be 100 or 200 or more such districts in New York City, but it is clear that BIDs are becoming an expected factor in improving the city’s perceived quality of life.

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