Lebo: Business Improvement District

The November 2005 issue of Mt. Lebanon magazine included an innocuous-sounding description of something called a "Business Improvement District," which funds various marketing and maintenance programs for commercial districts, such as the Washington and Beverly Road areas in Mt. Lebanon. Apparently, one or more BID proposals are being discussed for Mt. Lebanon.

Read the piece -- which I've copied below -- and before you agree that it sounds like a good idea, ask yourself: If Mt. Lebanon residents were asked to vote on an increase in their local taxes to support marketing and maintenance for the Washington Road business community, would that tax pass?

My answer: Of course not. Then what's going on with this Business Improvement District proposal? I'm intrigued by how carefully the article does not use the t-word, but it sure sounds like a tax to me. And when I see a new tax proposal, I wonder: Who has the power to pass the tax, and who would be paying the tax? Mt. Lebanon residents, who have the most to gain from a more attractive retail community, neither pass the tax nor pay it. Owners of retail real estate in defined zones tax themselves by forming a BID. But it's a curious sort of ballot: a mere 60% of the property owners have to agree in order for the tax to pass, and silence, in the face of the proposal, signifies assent. If 100% of the affected property owners agree, then there is no problem, at least not for current property owners and merchants, but if fewer than 100% agree, then the tax strikes me as a least a little unjust. If I'm a (hypothetical) small business owner who is out there aggressively marketing my business, why should I have to underwrite marketing plans for my neighbors who aren't doing anything to help themselves?

Moreover, who pays? Mt. Lebanon property owners and merchants do, but at least some of them don't live in Mt. Lebanon. Their customers pay, via higher prices, and at least some of them also don't live in Mt. Lebanon. Importantly, would-be new business owners and property owners pay, and at least some of whom may be discouraged from moving to Mt. Lebanon by being forced to subsidize BID improvements. Is it fair, then, for the taxpayers of Mt. Lebanon who, sensibly, wouldn't pay for this stuff themselves, to allow the BID process to be used to extract a tax from those who don't live here? I'm skeptical; though I understand that PA law authorizes the BID process described in the magazine, the more democratic thing to do would be to run improvements through the Commission, so that indirectly at least, the taxpayers and voters of Mt. Lebanon could have a say in the matter.

The reason that this may matter is this. I'm *not* suggesting that residents should pay increased taxes in order to build a nicer retail district. Instead, residents might conclude that Mt. Lebanon would be better off with a *lower* tax structure for attracting new businesses.

One last note: I may be wrong about all of this, and Mt. Lebanon merchants and property owners may already believe that the BID concept is one worth pursuing. Is that right?

Over the past two years, business owners along Washington and Beverly Roads have reorganized themselves into active business associations, reaching out to new businesses on the street, creating new opportunities for promotion (like Washington Road’s First Friday street fair) and electing new, generally young leadership with high expectations for success.

However, fewer than half the eligible businesses in each district pay the annual dues that fund the associations’ programs and activities, even though everyone enjoys the same benefits. One way to remedy this imbalance is to create a business improvement district (BID)—a clearly defined geographic area in which all property owners agree to assess themselves the expenses of an annual promotional or improvement program. In the past, both Washington and Beverly roads financed their streetscapes through BIDs that allowed for special assessments but became inactive after the projects were completed because of a “sunset” provision in the charters that allowed for their expiration after five years.

Interest in reviving the BID concept in Mt. Lebanon’s commercial districts has been gathering steam. In September, Mt. Lebanon’s commercial districts office invited Bill Fontana, executive director of the Pennsylvania Downtown Center, to speak to a group of Washington Road business owners about revitalization and the important role a business improvement district can play in creating a thriving downtown. Business Improvement Districts (BIDs) are provided for by state law and allow property owners to assess themselves to pay for commonly defined needs of the business district, as decided by a steering committee. Each BID defines these activities, which can range from promotion to district maintenance to consumer marketing and business recruitment, and everyone is assessed a fair share of the cost required to carry out the common goal.

Mt. Lebanon has been designated as a 2005 “achiever” by the National Main Street Center of the National Trust for Historic Preservation and the Pennsylvania Department of Community and Economic Development (DCED). This means that while Mt. Lebanon was only recently designated an official Main Street community, we had previously achieved many of the goals set forth by the program. Mt. Lebanon’s proactivity also moves us closer to the top of the list for future Main Street revitalization funds, says Fontana. Incentives like last year’s matching grant façade rehabilitation program—low-interest loan programs, sidewalk rehabilitation, plantings, snow removal, litter control, coordinated sales, promotions and improved signage throughout the district and other extras “with no government strings attached,” he says, are all possibilities offered to BIDs through the Main Street program and the Pennsylvania DCED.

If a group of business and property owners decides to form a BID, it consults with the municipality to finance a work plan. A steering committee decides the BID’s budget—how much is needed—and the property owners pay a pro-rated portion of the fee, which can be based on square footage, a percentage of assessed value, or benefits to the property owner. The group then informs property owners in the district and holds two public hearings to craft revisions and review objections. These have to be submitted within a specific time frame. If 40 percent or more of the property owners submit written objections, the BID is defeated. If the BID passes, the agreed-upon fees are binding, and lienable by state law, and the BID remains in place for a minimum of five years.

The Mt. Lebanon Partnership, the new community development corporation established last April, would implement BID funds, which average $250 to $300 per property owner. To learn more about BID legislation, go to www.mtlebanon.org, and click on “Commercial Districts.” To share comments or questions about the idea of a business improvement district on either Washington or Beverly Roads, contact Mame Bradley at the commercial districts office: 412-343-3412.

Note: I went to www.mtlebanon.org, and I clicked on "Commercial Districts." I didn't see anything labeled "Business Improvement Districts" or "Proposed BIDs" or anything similar. What am I missing?