Larry Houstoun's Urban Public Spaces & Business Improvement Districts

Generous BID assesses. BID employee and cleaning equipment being used to clean gutters--without municipal compensation

Does it Add Value?

Early BIDs tapped into a hidden thirst among the middle class for commercial areas totally devoid of litter. When there was little BIDs could do about crime notoriety or depressed real estate values, at least they could do something everyone understood. They could clean the pavements and many did and do so irrespective of the pavements’ conditions.

In extreme cases such as New York’s Times Square there were sidewalks chocked with litter to an extent that it could reasonably be said to depress real estate values and business profitability. Waste strewn pavements were unpopular with employees and visitors who were inclined to assume a place that dirty was basically out of control and thus probably unsafe as well. This rationale enabled Times Square’s first BID Director, Gretchen Dykstra, to successfully propose round the clock sidewalk cleaning, an expenditure that she equated with bringing back the crowds to this world famous location.

Municipal Windfall

Sidewalk waste doesn’t emerge on commercial districts like rain; it is carried and distributed by pedestrians. The more pedestrians, the more litter. At some point the accumulation is greater than public toleration. US municipalities are not required to clean sidewalks; the task is left to property owners, in this case BIDs acting for all owners.

BIDs represent a pleasant windfall for localities. Most trash on streets, which governments are obligated to clean, comes from sidewalks. Removal of sidewalk litter is paid for through a surcharge absorbed by BID businesses and/or property owners, a cost for which officials need not solicit approval by their voters.

BIDs often contract this work to private enterprises whose employees wear BID logoed garments and use and maintain specially designed mechanical sidewalk sweepers. When contracts are let with competitive bidding, qualified firms often perform equal service for less than the cost to BIDs if they hired employees and managed the activity themselves. Some BIDs use these jobs to provide work experience for welfare recipients or former addicts and prison inmates. Experienced cleaning service firms can handle this dimension as well. In general, contracting out this work carries with it little risk and requires less supervisory time by BID officials. Small BIDs in particular fmd themselves burdened with the need to oversee the details of this work and to store and maintain the often cranky sweeping machines in working order.

Regardless of how casual the initial decision to clean sidewalks at a given frequency, the schedule is rarely revised. Particularly, it is rarely reduced. Some BID planners appear to believe that sidewalk sweeping is an essential component of being a BID; without it, what are you? Some BID managers have difficulty determining what an acceptable and cost effective level of sweeping may in practice be. Even New York City recently revealed its uncertainty as to whether daily opposite-sides-of-the-street cleaning is necessary.

Some BIDs start sweeping early so that the ratepayers will see that they are getting something in return for their fees. The uniformed sweepers serve as an expensive ad for BID benefits. Other benefits, such as marketing, are less visible in the early months and there are pressures to do something quickly. Once started, sweeping is rarely cut back irrespective of conditions and of other potential claimants for BID funds

It is common for BIDs to devote 30% of their assessment revenues to sidewalk cleaning. More often than not BIDs maintain the same level of cleaning services from year to year without asking whether it is a justified expense; what, if anything, is the value added? What would happen if the service was reduced by half? One BID stopped cleaning for several months because the mechanical sweeper was out of service (a common experience). Few ratepayers complained. A survey of assessment payers, however, rated sidewalk cleaning low among BID priorities for the coming year. Still, the board determined to keep the same dally cleaning schedule. Foot traffic and retail offerings continued to decline, but the pavements remained pristine. Might the funds reserved for sweeping have been better used to draw more customers?

About 70% of sidewalk litter is related to things people put in their mouths, food, food wrappers, chewing gum and tobacco, most prominently. Litter tends to accumulate in places such as bus stops where students gather and near places where take out food is sold. A proposal in Newark, NJ to increase the BID fee where properties included take out food shops was justified on the basis of the added cost of cleaning associated with these locations, but the idea was lost in the approval process.

Starting before BIDs came, New York City organized a periodic inspection of the amount of litter in each commercial center. Times Square, since the BID, tends to be among the best performers, a point they include in their publicity. While it is sometimes discussed in BID planning, few BIDs try education or regular inspections and ratings as antidotes to accumulating waste.

Might there be other options? At the next reauthorization, might the BID make a case to shift some or all of cleaning costs to the local authority, devoting the savings to a BID economic development or marketing benefit beyond the local government’s abilities, one calculated to increase governmental as well as BID revenues?

Best Use of BID Funds?

Is there too much cleaning? In most BIDs this is probably true. Many BID boards that now pay for daily cleaning may only require this attention after festivals and before evening and weekends if many stores are open and foot traffic is highest. Second only to customer generating marketing, pavement cleaning is certainly the second largest expenditure both in number of BIDs and budgetary allocation.

More serious is the underlying reason for too much cleaning: BIDs are typically slack in challenging their own assumptions. BIDs are intended to improve business profitability and enhance property values. Except in the extreme cases in large, dense cities with heavy foot traffic, there is little evidence that daily cleaning is an essential input. But it is expensive.