Business Districts Deserve Praise, not Scorn

The older I get, the more I realize that some aphorisms really do hold true.

Regarding Mark Rosenman’s opinion piece “A Class of Charity That’s Bad for the Public Good” (My View, August 12), the old saw “A little knowledge is a dangerous thing” is fitting. Sadly, Mr. Rosenman is looking for an enemy where an ally really exists.

Business-improvement districts, far from leeching government tax dollars away from the general community, are an innovative and entrepreneurial way for local business leaders to limit their demands on the tax coffers and build a better downtown at the same time. Typically, business-improvement districts are established when a majority of downtown property owners (and sometimes businesses) agree to assess themselves an additional fee to provide supplemental services to the downtown district. This is not a handful of fat cats making decisions for the little fellas on the street. Rather, most legislation authorizing these districts requires the petitioning process to meet two tests: the agreement of the majority of the property owners within the district and the majority of the property value in the district. That way, if a minority of owners control a majority of the value of the property, they cannot push a business district onto the rest of the owners without their consent.

By setting up such districts, property owners are finally realizing that (1) city taxes aren’t going to go up enough to correct the often deplorable decline in downtown infrastructure, and (2) taxes must, sadly, be spread thinner and thinner in response to the decentralization of government obligations from the federal level to the state and local levels. So, instead of pushing their weight around with the City Council to extract more for downtown at the expense of everyone else, downtown leaders are saying to local elected officials, “We are willing to assess ourselves in order to supplement the fixed level of services that the city is able to offer.”

In short, business-improvement districts have frozen downtown’s demand on city tax revenues. I defy you to show me another interest group that is willing to say that they don’t want more money from City Hall, or any group of downtown property owners who have sought to lower their taxes while creating an assessment district.

The most common uses of business-district funds are meant to do two things: improve basic services to the public that uses downtown and raise the level of confidence in downtown to attract additional private investment. The first motivation is a direct acknowledgment that the downtown’s appearance — trash, vagrancy, panhandling, and deteriorating sidewalks and roads — all contribute in very direct ways to the public’s reluctance to use the place. If shoppers won’t shop and employees complain to their employers, then shops and businesses leave, the value of buildings is reduced, and tax revenues suffer. But when business districts are established and city services are supplemented — not usurped — then the environment for shoppers, employees, visitors, and owners is improved, without an additional dollar of taxpayers’ revenue.

The second motivation — increasing investor confidence in downtown — results in a direct increase in tax revenues to the city. More business results in more leased space, greater property values, a greater tax base, more shoppers, increased sales taxes, and improved bottom lines for local businesses. So, when business-improvement districts are established and show results, the bottom line-outcome is more revenue to the city — not some sort of covert diminution in the tax coffers, as Mr. Rosenman would have your readers believe.

Mr. Rosenman is also inaccurate in his assertion that business districts function as quasi-governments without public-sector oversight or control. Most districts have no extra-governmental powers; rather, the nature of the services that they perform is negotiated with local government. For instance, many districts provide supplemental street maintenance. The nature of that maintenance, its frequency, and timing are all negotiated with the local government in advance of creation of the district. After all, it is meant to supplement city services, not substitute for or duplicate them.

Likewise, when business districts offer supplemental security, the details are established with the agreement of the local police department. Most supplemental security is designed to serve as additional “eyes and ears” on the street, with direct contact back to police precincts and with no police powers or weapons. Where is the sinister overthrow of government in those agreements?

As well, Mr. Rosenman means to suggest that business-improvement districts are bully organizations attempting to legislate social behavior on downtown’s streets. Again, he’s missed the mark entirely. Downtown leaders are concerned about the impact of homelessness, vagrancy, panhandling, and drug use, not just because they interfere with doing business, but because they are social problems for the whole community. Many downtowns do have anti-loitering or anti-panhandling ordinances; but those are ordinances created by government, not by business districts, and often at the insistence of the users of the district.

Most business districts are working very hard to build alliances with the social-service community to find long-term solutions to these tough problems — solutions that will make social-behavior ordinances unnecessary. In fact, because of their productive partnership with the business community, some social-service entities are finding access to additional sources of financial support.

Finally, many business-improvement districts are actually using their programs to help address larger community issues. For instance, some districts hire welfare-to-work candidates, giving them jobs and entry to the work world. Other districts are providing respite centers for the homeless within their districts, or providing the development coordination for “one-stop” service centers for needy people on the street.

I couldn’t agree more with Mr. Rosenman that the non-profit sector is asked to do more with its limited sources of revenue, largely as a result of government abrogation of responsibility. But it’s inaccurate at best, and manipulative at worst, to attack the one sector that already shoulders the largest tax burden in the community — the business sector.

Business leaders have accepted the truth about limited tax resources and have invented a new means by which to invest in downtown development. That shift in business philosophy should be applauded by the philanthropic community.

Not only do business-improvement districts limit the need for the business sector to compete for tax dollars with other worthy recipients — they create an environment for new investment and, therefore, new tax revenue to address community needs.

It’s a shame when such a sound, cooperative, and efficient approach like business-improvement districts is demonized by someone with as little imagination and information as Mr. Rosenman.

Elizabeth Jackson is president of the International Downtown Association, in Washington.