Business Improvement Districts (BIDs) and other place-based community partners are critical in facilitating the coordination and delivery of services in a holistic and responsive way to address community needs. They bring innovation and leverage resources to complement City investment, and can help address neighborhood inequities.

When self-levy districts (in the form of business improvement districts and special assessment districts) first came to New York, they were largely concentrated in dense office and shopping districts and focused on ​“clean and safe” programs in the context of an ailing and anemic city government. Among the original reasons for the creation of BIDs were concerns about competitive threats from suburban malls and the need to maintain vibrant commercial districts.

Particularly relevant today was the link with early plans to create and maintain public spaces. Two that were named specifically were the planned pedestrianization of Fulton Street in Brooklyn, and the planned Broadway Mall in Times Square. Generating maintenance funds for those spaces was cited as a reason to create the special assessment districts that became BIDs. That same legislation gave BIDs broad rights to capture revenues from commercial uses on the streets and sidewalks they maintained.

Self-levy districts have become the leading voice for small and independent businesses – 23,838 storefront businesses in 2022 — and for creating the conditions in the 300 miles of commercial corridors that help them survive and ideally thrive. Equally essential are the hundreds of thousands of local jobs created and filled by those retailers, restaurants, bars and shops.

Most importantly, they have become the single greatest non-governmental investor — investing $187 million in FY22 alone – in the management, programming and activation of the city’s public spaces: streets, sidewalks, plazas and, in some cases, parks. Those investments make a dramatic difference in the neighborhoods where these districts exist.

Those dollars go towards the activities needed to create conditions for vibrant neighborhoods. The upkeep of public spaces is reflected in the data — 3.4 million bags of trash were collected and half-a-million graffiti tags were removed by BIDs in 2022.

Beyond simple ​“clean and safe” efforts, BIDs invest in plaza maintenance and public programming. In 2022, BIDs held more than 3,200 public events with a total attendance of 30 million people, installed 154 art installations and maintained 176 public spaces.BIDs have also provided critical on-the-ground support for pandemic initiated programming including Open Streets, Shared Streets, and Outdoor Dining. The dramatic and democratizing effect of these changes in street use have led to scores of requests by successive city officials, electeds, transportation advocates, public space groups, BIDs, restaurants and retailers to do even more.

History shows that these self-levy districts have repeatedly stepped up to address community needs far broader than those of the private property owners and businesses that pay the BIDs’ bills. Beyond that, many become go-to problem solvers because they are trusted conveners that bring together key community players – elected officials, city agencies, the community board, business owners, property owners and residents – to build consensus and collectively solve problems. Their coordination among often-siloed city agencies and local players, combined with the trust they build through communication and collaboration, helps to transform standardized agency approaches into more nuanced and nimble neighborhood service delivery.

Few actions would cost the city less, and benefit neighborhood partners more, than lifting the bureaucratic constraints that have the most dramatic and deadening effect on local groups. For larger BIDs, those constraints waste precious time and resources that could be going to serve the public. For many smaller partners in less-resourced areas, those constraints make innovation or expansion of responsibilities nearly impossible.

Address Common Pain Points

Certain categories of topics come up again and again. Whether large or small, these issues need to be addressed in order to enable BIDs to utilize their resources and time more effectively.

1. Insurance requirements are prohibitive

2. Bureaucratic burdens are excessive and adversarial

3. Access to power and water is difficult or costly

The areas discussed below are among the most common pain points that have come up through experience and engagement with BIDs and other community partners.

Example 1: Insurance Requirements are Prohibitive

“Insurance costs more than my entire budget.”

Administrative burdens that could be ameliorated include concession agreements, street use permits and processes receiving grants.

Concession Agreements

“The City’s Concession agreement is 61 pages long. The lawyers fees alone to review this could be tens of thousands of dollars.”

Plaza partners require a concession agreement with the City. The standard agreement is lengthy and often requires complex, potentially expensive negotiations. The standard form is written as an adversarial legal mechanism originally designed to extract value and protection from a for-profit entity making money off of a public asset (City land).

The City defines concessions agreements as a ​“grant for the private use of city-owned property for which the City receives compensation.” The fundamental problem with a concession agreement for local partners is that it is, as one City employee once admitted, ​“a square peg in a round hole.”

That is because in the case of public-space partners, the city is trying to incentivize a nonprofit partner to spend its own money and time on maintaining a public asset. And if any revenues are generated for the nonprofit by fees from a profit-making entity (for example, from a sub-concession food vendor or commercial event producer), those funds must be reinvested by the partner entirely on the public asset. Even in a place like Times Square, the revenues gained never exceed the maintenance and management costs. While further legal research is needed, existing City Franchise and Concession rules governing nonprofit concessions allow for the development and use of less cumbersome provisions. This should be pursued.

Permits

“I can’t get a rain date for my event!”

The City’s Street Activity Permit Office (SAPO) has told certain BIDs that it legally cannot give ​“rain dates” for events. This creates uncertainty in programming and adds additional cost burdens to BIDs. By not receiving a rain date, they would have to pay cancellation fees, for example to performers or rental companies, limiting additional programming for the community.

In other instances, BIDs that do not have a formal plaza concession agreement but who wish to have weekly programming have to secure and pay for new permits for each event, every week.

Other common complaints related to event permits include long lead times required by the City and limits on sponsorships and commercial activities.

Grants

“The City wants my board, which debates $500 expenditures, to accept a programming grant that represents 15% of my annual budget, but I won’t receive reimbursement until 14 months out?”

Both the timing and the paperwork required for BIDs and small partners to receive City grants make them prohibitive for most small organizations. They have neither the staff to handle the reporting requirements nor the financial wherewithal to be reimbursed 6-12 months after expenditures are made.

Example 3: Access to Power and Water is Difficult or Costly

“DOT asks me to water the flowers in the planters that protect pedestrians, which I am happy to do. Yet I have to pay Department of Environmental Protection for that water!”

One of the key ways to enliven public space is to beautify public spaces with plantings and provide regular programming such as music or performances. These amenities activate the public realm and can help drive foot traffic to district businesses. Groups need access to electricity and water in order to successfully manage these amenities and public programming. Unfortunately, this places additional costs on district partners such as requiring BIDs to pay Con Edison for power acquired through a ​“pole tap” or paying fees to the Department of Environmental Protection for water usage. Groups then default to using noisy, polluting generators, which must then be stored somewhere safe after the fact. Plantings are left without care, or else groups must divert funding from other programming to pay fees to the City in order to properly maintain public space.

While these rules were often developed and evolved to address particular needs, they have become cumbersome and need to be overhauled. Removing these pain points – which are baked deep into the bones of different agencies due to a mix of past practice, precedent, regulations and laws, will be far from easy. New regulations should be adopted that support nonprofit partners in maintaining and programming public assets for the public good, and not stifle their efforts.

The next section of this report outlines an approach to change, in the form of a special Task Force overseen by the new Chief Public Realm Officer. One key argument that Task Force can employ – and what success could look like, is described below: A Trusted Partner Program. Its core assertion is that pain points should be reduced for BIDs that are already subject to exceptional oversight and a track record of building trust.

REDUCE ADMINISTRATIVE BURDENS THROUGH A TRUSTED PARTNER PROGRAM

Pre-Qualified partners are common in contracting, such as the City’s Design Excellence Program. That and the US Department of Homeland Security’s Trusted Traveler Program, for example, provide frameworks for easing administrative hurdles for both applicants and agencies running the programs. These examples highlight concepts that could streamline processes and make them more predictable - or even expedited - for place-based community partners.

The City could reduce administrative burdens for BIDs by establishing a form of ​“Trusted Partnership”, setting certain criteria with respect to a BID’s history, governance, transparency and community support. BIDs are already subject to numerous conditions under their existing master contract with the City, and the NYC Department of Small Business Services (NYCSBS) already has exceptional information about and oversight of BIDs. Moreover, BIDs that have recently expanded or increased their assessment cap would have had to go through a public process associated with enacting that increase. So some ​“trusted partner” eligibility criteria could be established that help equitably qualify BIDs for a partnership program based on existing standards they are already meeting.

Crucially, we must further equity and avoid writing these ​“prequalification” criteria in such a way that only the most resourced BIDs and neighborhoods could meet them. Agencies may want to only ​“reward” entities that can bring more resources to the table. But that would only serve to further the gap between well-established groups and those that are less-resourced. NYCSBS and partner agencies would have to determine proper eligibility criteria but ensure they are transparent and not unduly burdensome for smaller BIDs.

Meeting some or all of the following could serve as a starting point:

• BID has a Master Contract with SBS

• BID has fulfilled core governance and transparency requirements of SBS contract for last 5 years

• BID has had a budget cap increase or expansion approved by City Council legislative action within the last 10 years

• City Council representative on board endorses Trusted Partner application

• Borough President endorses Trusted Partner Application

• SBS endorses Trusted Partner application

• DOT endorses Trusted Partner application

• Parks endorses Trusted Partner application (where applicable)

• Comptroller endorses Trusted Partner application

• BID has managed or programmed an Open Street or Plaza on more than 3 occasions during the prior fiscal year

Additional criteria could be established that would unlock additional support:

• BID is operating in an area which DOT’s Plaza Equity Program classifies as Medium or High Need or meets equity criteria used by entities like the City Parks Foundation

• Smaller BID agrees to incremental assessment increase to secure matching funds from the City

• BID has participated in at least two SBS capacity building or educational seminars during the last year

The City would have regular opportunities to assess groups’ ​“Trusted Partner” designation through a regular renewal process. In addition, there may be tiers of trusted partners with an equity lens. For example, some ​“benefits” may be made to flow more easily, or constraints lifted sooner on the basis of need. Groups just starting out may be provided a starter agreement that simplifies the process and enables a pilot phase to establish themselves without going through onerous administrative hurdles. NYCDOT’s OneNYC Plaza Equity Program can serve as an example. Through this effort, the agency looks at public space experience, annual budget, amount of foot traffic and neighborhood income when developing tiers of High, Medium and Low Need plazas. These designations then unlock a range of different services and support based on need ranking.

“We don’t get that reciprocal consideration. They say we are partners but their actions show they don’t really trust us.”

The key is to look at this through the lens of supporting and catalyzing the entities helping to implement best practices for public realm management, especially in less-resourced areas. BID partners often feel like the City is adversarial and inclined to start with ​“no” when they request improved processes or permission to innovate. We must find a new way of thinking that is consistently looking for ways to say ​“yes” instead.

It is important to note that making things easier for ​“Trusted Partners” involves no new expenditure of City resources. In fact, the streamlining and elimination of redundant review processes saves the City staff costs and time.

There is, of course, a necessary expenditure of institutional resources that is the typical way to jump start the process: a directive from the Mayor’s office — in the context of fulfilling the Make New York Work for Everyone action plan — to authorize the Chief Public Realm Officer to convene a task force of key players across agencies and sort out issues and to make it happen. It could also be in the form of an Executive Order authorizing a Pilot Trusted Partner Program in which certain practices or regulations are temporarily waived and evaluated 12 and 24 months out - similar to how the open streets and outdoor dining programs were implemented during the pandemic.

What would be the components of a Trusted Partner Package?

Take the greatest incentives from existing partner agreements with public space partners, and use those as a starting point for what could be offered. These incentives exist because they work, so instead of diminishing favorable terms, we must expand them to more groups to further an equitable approach to public realm management.

Many of the most favorable provisions with respect to insurance, concessions, revenue capture, permitting, in kind support and the like can be found in select agreements with the Parks Department. They were the first to pioneer new partnership paradigms through numerous agreements over the past several decades. Entities like the Central Park Conservancy, the High Line, Bryant Park Restoration Corporation, Prospect Park Alliance and the City Parks Foundation all have been granted greater flexibility and protections, because the City has recognized the scope of their contributions. In recent years, DOT and SAPO have similarly granted greater flexibility to some, but not all, public space partners.

Such provisions could enormously empower partners, advance equity, and enliven and improve public spaces in every corner of the city. Similarly, there are some provisions in BID agreements where the starting point could be to extend incentives to less-resourced groups with support on how to be responsible partners.

The following are examples of benefits that some partners have already been able to receive. Conferring these benefits to trusted BIDs will reduce administrative burden and expand neighborhood impacts:

• Full indemnification of community partner

• Full or partial retention of concession revenue without complex parallel agreement

• Enables partner to operate a concession

• Does not require approval for sub-concessionaire

• Facilitates entering into a sole-source concession agreement with a nonprofit partner

• Does not charge for electricity or water used for programming and maintenance

• Allows for holiday lights without complex side agreement

• Allows for unrestricted micro grants through intermediary non-profit

• Waives multiple permit fees and multiple permit requirements

• Waives event fees for partner

• Grants year-round event permit for partner programming

• Allows partner to choose sponsors and set sponsor fees

• Allocates some portion of concession or revocable consent fees to go to partner

• Permits storage containers for furniture, equipment

• Gives direct unrestricted programming grants for High Need Partners

• City pays third-party intermediary to provide supplemental services for High Need Partners

Additional actions that could be taken include:

• Reduce administrative overhead

  • Use the least restrictive agreement and most empowering template, whether license, management contract, concession agreement or District Plan.

  • Pilot a new omnibus agreement, or incorporate simplified elements of other agreements into the NYCSBS master contract with a BID as exhibits or riders, or as additions to the BID’s District Plan, in lieu of those other agreements.

  • Enable automatic pre-approval or allow freedom to choose subcontractors or sub-concessionaires to perform maintenance or implement programs or services, including those that may generate revenue.

  • Implement a more flexible seasonal or year-round master event permit from CECM/SAPO which allows for variable fees and sponsorship which can be retained by the BID, subject to certain parameters.

  • Create a Consolidated Public Place Regulatory Framework, building off the legal concept of ​“public space” designation in the zoning text, holistically integrating multiple overlapping public space regulations so that they more closely mirror the case law and uniform practice of the Department of Parks rules.

  • Address concerns with interpretation of USDOT rules and other regulations to develop an easier approval process for overhead and holiday lights (especially if they precisely match the characteristics and specs which have been ​“grandfathered” in other areas for decades).

  • Pilot Public Space Innovation Zones which waive or test new regulatory and enforcement paradigms to fast track new public realm innovation.

• Fee retention

  • Make it easier to capture revenues from commercial activities overseen by the partner, provided they are put right back into the public spaces, than is currently possible under NYCDOT Concession, SAPO or NYC Parks rules.

  • Allow receipt of certain City grants using the existing NYCSBS contract with BIDs rather than via a new contract or funding agreement.

  • Mandate 25% advance funding or bridge loans which the City makes available to certain nonprofit service providers in less-resourced areas, to address cash flow concerns, especially with regards to current timing lags associated with expenditure reimbursements.

  • Allow participation in Mayor’s Office of Contract pilot initiatives to improve contracting and funding processes for trusted nonprofit vendors and partners.

  • Earmark a certain amount of fees received by SAPO from commercial promotions, events and sponsorships to support smaller partners in less resourced areas, rather than going to the general fund.

• Utility access

  • Facilitate no-fee physical access to City resources, such as electricity (“pole taps” or free-standing outlets) and water (fire hydrants), which are essential for a less-resourced partner to provide public space programming and maintenance.

  • Allow the use of select curb space for storage of street furniture and event infrastructure elements, or integration with curb lane permissions granted by the outdoor dining and open streets programs.

• Convene agency officials and community partners together regularly for knowledge sharing and training.
  Convene annual or bi-annual knowledge sharing and training with City agency partnership and placemaking peers. This would include City leaders working across comparable agencies and their partners. In addition to the resources shared above, examples of this work include:

  • NYC Department of Small Business Services (NYCSBS) - In 2019, engaged NYCDOT, NYC BID Association and the Public Policy Lab to co-create the Collaboration in the Public Realm process. This was meant to increase two-way communication between BIDs and NYCDOT to help better inform planning, outreach and policy implementation.

  • National Association of City Transportation Officials (NACTO) - Connects cities and their transit agencies around issues of urban mobility and street design to further evolve the transportation field.

  • City Parks Alliance - Conferences and events to bring together Parks commissioners and community partners.

  • International Downtown Alliance (IDA) - Examines and leads workshops on municipal partnerships.

  • Placemaking Europe - The Cities in Placemaking program provides a new and sustained two-year knowledge-building effort which links city officials overseeing placemaking efforts and partnerships.

• Explore and Pilot New Mechanisms to Integrate and Improve Place-Focused Service Delivery.
  Interagency coordination challenges among city agencies and place-based nonprofits can lead to frustration, inefficiencies and redundancies. Since the start of DOT’s plaza and Open Streets programs, DOT and SBS staff have tried to develop effective working relationships with public space partners despite institutional obstacles. However, in the absence of detailed understanding, institutional constraints contribute to community exasperation and limits the ability to adapt projects and programs to neighborhood needs. Although daunting, certain avenues for improvement could be explored:

  • Advance and accelerate the use and tracking of open source neighborhood-based indicators and develop partnerships between the City’s tech sector and public realm partners. These could expand on models already implemented such as the Neighborhood Stat program NYCSBS-funded storefront occupancy and vacancy data mapped by LiveXYZ. For example, information about public space noise, code or sanitation violations across agencies by a particular business or location could be aggregated to identify ​“hot spots” that need additional attention. Similarly, knowing which small businesses in a district are receiving supportive grants from the City or State could enable more coordinated support and promotion.

  • Through contracting and management agreements, pilot devolving certain activities (and revenues related to those activities) to qualified place-based partners within their districts, as a way of (a) empowering community partners; (b) leveraging private and civic sector resources; and © piloting improved and better integrated methods of service delivery at the neighborhood level. This could include things like reimbursement agreements for certain supplemental services (like repairing or replacing trash receptacles or placing and removing barricades on Open Streets) or co-operative code enforcement to reduce burden on agency staff.

• Address and simplify the challenges with public space regulations and enforcement. One of the things that makes integrated public realm management so difficult is the incredibly complex regulatory and legal frameworks governing streets and sidewalks, most of which were designed to accommodate transportation throughput alone. Possible actions to explore could be:

  • Examine regulatory issues, such as overlapping street and sidewalk codes across agencies, which are ill-suited to current public space, commercial and free-speech activities. Match simplified regulations governing streets with the integrated public space management framework in Parks Department regulations, which take into account a complex mix of civic, commercial and throughput activities. Explore the conceptual and legal framework of ​“Public Place” designation in certain land use regulations.

  • Implement Public Space Innovation Zones to pilot alternative regulatory and enforcement mechanisms in different communities and contexts to test new paradigms with respect to programming, commercial activities and civic activity. Develop a values and outcomes-focused framework for public space regulation addressing several key variables: placement, pricing, partnerships and protection/enforcement. Use the lessons learned from those pilot programs to adapt citywide rules.

  • Explore removing enforcement for non-safety issues away from the police department and focus on education and technical support. Pilot explorations could include the integration of certain enforcement teams across city agencies by place, or collaborations among agencies, BIDs and businesses.

  • Combine innovative practices into a placemaking ordinance after successful pilot phases, as has been done in San Diego for permitting and curb management.

• Simplify, Modify and Evolve the City’s Core Contractual Relationships.
  The amount of time and resources spent negotiating, modifying and working around enormously complex legal agreements and endless ​“what-if” scenarios could be better spent creating vibrant public spaces. Simplifying and reducing the number agreements would be a huge step forward.
  
  Agreements to be examined would include, but not be limited to: SBS/BID master contracts, BID District Plans, Franchise and Concession Agreements (including Plaza Maintenance Agreements), License Agreements, Streetscape Amenities Maintenance Agreements, Street Seats Maintenance Agreements, SAPO Permits, Open Streets Maintenance Agreements, Greenstreets Maintenance Agreements, Greenmarkets Agreements, Artwork Maintenance Agreements, Artwork Installation Permits, Sign Maintenance Agreements, etc.
  
  The criteria for simplifying such agreements would relate to how they create more vibrant public spaces and places by leveraging private and nonprofit community resources.

Launch City-affiliated public-private partnership to build the capacity of local organizations to help DOT and SBS support commercial corridors, spur innovation and help BIDs and other place-based partners manage streets, sidewalks and plazas. To succeed, it must be a citywide nonprofit linked to but not wholly controlled by the City, expanding its ability to implement innovative programs and support partners, especially those with less resources.

Across the country, citywide parks nonprofits have proven to be a critical tool to address park equity issues. Such partners provide grants, umbrella insurance, legal support, technical assistance, fiscal sponsorship, economies of scale and opportunities for innovation far more flexibly than city agencies. They can leverage philanthropic dollars, and efficiently channel government support to a myriad of smaller neighborhood entities which would not have the capacity or interest to pursue government grants directly. For example:

• In New York, the City Parks Foundation (CPF) Partnerships for Parks program provides a partial model for supporting smaller public space partners and addressing the equity gap between many well-resourced larger parks and smaller neighborhood ones. For example, CPF’s Parks Equity and Green Fund programs tapped new philanthropic dollars and created a growing mechanism through which City officials could more easily distribute grants to smaller neighborhood groups and parks and fund some City positions at CPF that support them. All aspects of the process were made easier: far less paperwork for a small neighborhood group, easy assessment of capacity by CPF because it had years of experience with the groups, greater flexibility for any group that changed course during the grant. CPF took on the responsibility of bridging the strict needs of the City with the flexibility of on-the-ground partners.

• The New York Restoration Project provides support for 52 community gardens in New York, while in Chicago, NeighborSpace works as a land trust providing support and ownership to community gardens. In both cases, the larger, citywide entity provides the gardens with an array of umbrella services, including insurance, technical assistance, a mechanism for channeling CDBG or philanthropic funds, and a collective voice to negotiate with the City, which would have been much harder for the micro-garden groups to obtain on their own.

There are other models in New York of citywide nonprofits which are independent of government but work very closely with it. They tap both public and philanthropic funds and work with smaller, often place-based nonprofits to provide broad-based institutional support. They often facilitate and incubate innovative pilot projects that catalyze new government programs. For example, the Fund for the City of New York provides bridge financing to smaller nonprofits that would otherwise experience severe cash flow challenges due to the City’s slow reimbursement practices. Likewise, the Midtown Community Court’s private and philanthropic dollars have allowed for the piloting and creation of alternative-to-incarceration and restorative justice programs for low-level and non-violent offenders—within the publicly-funded court system.

A critical reason for the success of these entities is their hybrid nature. Here are the key characteristics of successful ones, and the reason they won’t succeed if they are wholly controlled by the agencies and entities they partner with:

• They are largely independent nonprofits, but with direct and strong formal links to both government and the private sector.
  Most of the power of successful entities derives from their ​“soft” power in identifying and aligning overlapping interests and initiatives among often combative and competitive entities. At their best, they and their leadership create consensus and common action – so often fractured or siloed – among different parties whose risk aversion or innate self-interest hampers progress. That consensus happens in part because the ideal organizations have board, funding or legal structures which require them to meet the needs of and be responsive to multiple stakeholders (and, de facto, multiple bosses).

• They help government leverage private and philanthropic dollars – but only if they are perceived to be quasi-independent.
  Private and philanthropic donors understand that government has the depth, breadth and authority to make lasting and systemic change. For an agency, an initiative that faces bureaucratic or political challenges can be more easily and effectively piloted using private dollars, which ameliorates risk should the initiative prove not viable. At the same time, philanthropies and private sector interests are usually resistant to give significant grants directly to government, or an entity solely controlled by government. Thus, an independent entity has greater potential for fundraising.

• Quasi-independent entities can be more innovative.
  Because they are freed from many governmental constraints, these entities are able to be nimble, nuanced, and risk tolerant in ways that government cannot be. Just as important is the creative synergy created by the de-facto forced collaboration of private, nonprofit and public sector stakeholders, and the ability to more easily test and measure new initiatives. Initial ideas come from all three sectors – very often from agency leaders themselves – who rely on the partner entity to get them going quickly. In addition, nonprofit partner entities can provide critical programmatic continuity and institutional memory when administrations change. On the flip side, some partner entities that are not independent primarily end up being mechanisms for agencies to quickly – and perhaps only – address immediate short-term, non-strategic needs, like buying equipment for City employees.

• Wholly-controlled entities risk becoming suspect.
  Sometimes such entities are perceived or accused by the media as unaccountable ​“slush funds,” without an independent accountability that ensures funds are appropriately used for mission-relevant expenditures.

• A neighborhood-focused nonprofit can be more responsive to neighborhood needs.
  Large government agencies that have to deliver services across the entire city, driven by policies and procedures often crafted by OMB and the Law Department to work across multiple agencies, often default to one-size-fits all programs. Yet that very phenomenon means that nuanced, nimble and neighborhood-driven programs are far more difficult to execute by the same agencies.

A citywide nonprofit whose mission is to channel resources, expertise and innovative practices to place-focused nonprofits like BIDs can do more to help them respond to the particular needs in their neighborhoods. Start-up and recurring funding for this entity could come from the accumulated and ongoing interest payments on late BID assessments, which arguably can only be used by BIDs since they are derivative of the assessment. Such funds have historically been held in a separate fund for SBS and the BIDs, rather than going to the general fund.

BIDs and other place-based community partners create vibrancy and economic activity in a way that builds on distinctive local assets. They also have political and community support beyond their base of commercial funders. Equally significant, they improve the efficacy and efficiency of government service delivery in ways that make them more nuanced and responsive, while amplifying local assets. Nevertheless, they still have limitations, and they struggle to sustain themselves, especially in communities that are less resourced or lack a solid economic foundation.

There is an immense interest among philanthropic and policy circles in community wealth building that is driven by and responsive to unique neighborhood needs. Such wealth-building raises critical questions about how to best balance investment and inclusive growth:

• How to make struggling places more vibrant and prosperous without erasing or displacing existing residents or local businesses, and protecting community assets?

• How to keep the wealth created by that new economic activity in the community, and ensure that it is used to serve the public interest through an equity lens?

• How to find the funding to start and sustain the catalytic, place-centered activities which drive positive and inclusive change?

While there is no single solution or mechanism to address these concerns, there are a range of concepts and tools to explore. Many of these ideas may need adaptation to work, and some new institutional, tax, regulatory and financing tools may have to be created to complement what exists, but they are nevertheless instructive examples of approaches the city can take in this context.

The ideas touch on three main themes:

• Find mechanisms to capture the value of economic activity generated by local groups and channel it back to them.

• Make it easier for community-based nonprofits to sustain themselves and prevent displacement by helping them acquire land and assets at below-market rates.

• Provide direct government subsidy for placekeeping and placemaking activities in less-resourced communities to spur nonprofit innovation and private sector investment, without government subsuming those activities.

Two key approaches can help capture the value BIDs create and enable them to re-invest in their communities. First is the expanded use of residential assessments. Second is to implement a proactive funding strategy that promotes equity.

Encourage Greater Use of Residential Assessments

Under New York State BID law, there are no constraints on residential assessments. Historically, however, there was little or no actual residential assessment being paid, even though it was enabled by many early BIDs’ District Plans and assessment formulas.

But in New York City and elsewhere, residential assessments are becoming increasingly common as an additional source of revenue. According to a recent IDA survey of North American BIDs, 51% percent of them have some form of residential assessment. Recent NYCSBS information indicates that 17 of 76 BIDs in the City have some mechanism currently in place for assessing fully residential buildings. Across those 17 there are a range of assessment mechanisms and formulae in place, all permitted under existing law and more BIDs are planning to add a residential component. Beyond those 17 BIDs that fully assess residential buildings, an additional 20 BIDs incorporate the use of Assessed Value in their formulas and fully assess mixed-use properties, thereby implicitly assessing the value of residential uses.

In the last year a new Alliance formed in a primarily residential area in Manhattan and another entity whose primary focus will be maintaining newly created public space in Brooklyn will draw most of its assessment dollars from residents. This means that the things that BIDs do well – public space management and programming, and improving coordination and responsiveness of government services at the neighborhood level – also serve and benefit non-commercial areas. Even though they are created under current BID laws, they do not need to primarily serve businesses and can be a mechanism for enhancing places and public spaces across the city.

Provide direct government support through grants or contracts.

The Neighborhood 360 program and the Small BID Support Grant programs already use tax levy dollars to give grants and support to smaller, less-resourced BIDs. However, as currently structured they act as semi-restricted funding. Regulations should be changed to enable BIDs to use the funding more flexibly to meet the needs of their district. Another possibility could be having a portion of district property taxes partially or fully match assessment funds, on a sliding scale linked to the district’s LMI or other indicators, for ​“Trusted Partners”. In other cities like San Diego, a portion of business license fees and parking fees are directly reinvested back into the areas from which they are derived.

Provide service delivery contracts to BIDs for their maintenance work.

Another option is to provide funds to BIDs through a service delivery contract. A conceptual version of this already happens with DOT through its plaza maintenance program with the Horticultural Society. This provides cleaning and horticultural services for plazas and Open Streets that do not have a BID or other community partners. Agencies that typically handle or fund services that BIDs take on should directly finance the BIDs activities or provide reimbursement for services delivered. The citywide nonprofit could facilitate distribution of funds earmarked for services and be charged with contracting out if BIDs require technical support similar to the Horticultural Society.

Such tools exist in numerous other cities, and for a variety of services. For example, Washington, D.C. introduced a reimbursement program in the early 2000s (See Case Study below). The Hollywood Partnership recently opened a Community Dispatch Center which receives city funds, integrating at the neighborhood level formerly disparate government and nonprofit services. In Newark, the BID carries out low level code enforcement in exchange for receiving a portion of the collected funds.

In other cities, BIDs receive a ​“Management Fee” for staffing a particular asset or for being the city’s implementing agency linked to an alternate funding source. For example, many BIDs not only receive funds from a municipal parking garage within their district, but also receive additional fees for staffing and running it. In numerous other instances, the local BID has a contract to implement the projects or goals of a Downtown Development Authority or a Tax Increment Financing District. Those entities are almost always government entities created to generate finite funding streams for special projects. To get the job done efficiently, responsively, and in coordination with other placed-based entities, they often pay the BID to do the work.

Channel financial and institutional support through a new citywide entity or other nonprofits.

Perhaps the most valuable support can be financial. Some can be City funds that match philanthropic or private-sector grants for special purposes or pilot programs. To fulfill the City’s equity goals, direct regrants paired with technical assistance can build local capacity. A citywide nonprofit entity can achieve economies of scale in delivering or contracting with the City to deliver certain narrow, non-neighborhood-specific, services across multiple BIDs (as the Horticultural Society does for plazas without local maintenance partners). Similarly, the City could contract or give grants to the citywide entity to provide insurance, legal, design or other technical support services. For example, the Boston Director of Public Realm offers an ​“On-call Design Consultant” who can be consulted for free up to three times.

Another example is the government funds which go to the Toronto Association of Business Improvement Areas (TABIA). It has received millions of dollars of provincial and federal funding to provide broad services to Business Improvement Areas. Programs range from helping small businesses through a Digital Main Street program to grants to do façade improvements. With recent U.S. federal bills and programs, there may be additional and similar opportunities for distributive grants through City agencies and a citywide partner.

Add value capture mechanisms as additional funding streams.

One of the most promising avenues to explore, is to combine the self-levy ​“BID” mechanism with other revenue streams. In general these ideas have a common thread: that revenues which derive from economic activities in a district, which are in part happening (or will happen) as a result of public space and place-centered improvements implemented by nonprofits, should in part stay in the district or be committed to reinvestment in less-resourced districts. This is to create local wealth, to mitigate potentially adverse impacts such as displacement, to sustain local improvements, or preserve community assets.

New York State BID Authorization law already broadly defines the concept of ​“User Rights.” This gives BIDs the right to capture revenue from certain commercial activities that occur as a result of their public space stewardship. These revenues are meant to help cover ongoing costs. For a variety of reasons over the years, the practice of User Rights’ revenues was not expanded, but contracted.

Nonetheless, the original state provisions are mirrored and amplified in a section of every BID Master Contract with SBS, entitled ​“User Rights Generally” which states:

“The City hereby grants to the DMA, subject to the prior written approval of SBS and the limitations hereinafter set forth, the right for the DMA to undertake, or permit, commercial activities or other private uses of the streets or other parts of the District in which the City has any real property interests (“User Rights”); provided, however, that the activities to be so undertaken or permitted by the DMA pursuant to its User Rights (“Street Uses”) shall be in accordance with thePlan, be subject to all applicable laws including, without limitation, Chapter 14 of the City Charter And be authorized by the appropriate City agency having jurisdiction thereof.”

While there are qualifiers and constraints in the current SBS language, it is clear that the intention of the original legislation was that BIDs maintaining streets, sidewalks and plazas could capture revenues from commercial activities in those spaces in order to help cover their costs. These concepts, combined with the allowed exemptions in concession rules for ​“not-for-profit concessions,” could potentially free BIDs from the current cumbersome concession rules, and should be further explored.

Within New York City, there are also a variety of examples of other ways in which revenues from commercial activities within a public space – most often parks – are kept in whole or in part by the entities maintaining those spaces. In some cases, as with the Central Park Conservancy, a portion of City concessions is earmarked to cover park maintenance. In other cases, as in Prospect Park, Bryant Park, the High Line or at the Green Markets, commercial revenues from certain activities can go in part or entirely to fund the public space manager. This concept has been embraced by DOT and the Citywide Events Coordination & Management (CECM) office through concession agreements with plaza partners and for certain event fees. By and large, however, the condition and terms of the legacy parks agreements are more flexible and generous than the DOT concession template, and many smaller BIDs—much like smaller parks groups—have not been able to take advantage of these mechanisms in the same way. The city should expand upon the precedent that has already been set.

Value capture tools need to be redistributive to address existing inequities.
Areas that already have more resources and economic activity will generate higher impact fees or taxes than LMI areas. Some part of the incremental revenues captured from more prosperous areas should also be redistributed to LMI areas, rather than just go to the City’s General Fund. Linked to this idea should be that place-based neighborhood nonprofits, focused on the public realm, should exist in far more neighborhoods - an issue that a citywide nonprofit could help address.

The following ideas and examples further illustrate the variety of potential options that have found success in other places, which the City should consider adapting:

Parking revenues or other street or sidewalk-based fees

The City of Austin used a small EPA grant to pilot a Parking Benefit District (PBD) in the West Campus area beginning in 2006. The city installed 96 parking meters in the neighborhood, and committed 51% of the resulting revenue to local investment. In the program’s first year, meters generated $163,000 for the PBD, money that was used for sidewalk and curb enhancements, benches, crosswalks, transit shelters and bike lanes. As revenues grew, so did support for the PBD approach - in 2011 Austin approved a city ordinance to create a permanent program that allows any neighborhood to apply for a PBD, and use revenues for community improvements.

Austin’s experience mirrors that of a similar program in Pasadena, CA. The city created a PBD in the Old Pasadena area in 1993, partnering with the Old Pasadena Management District BID to identify spending priorities. The BID focused on improving sidewalks and streets, planting trees and installing historic lighting, along with parking, maintenance and safety projects. Parking meter revenues yielded an astounding $1.2 million in the program’s first year, and almost $1.5 million by 2011. The increased traffic turnover was also a boon to local businesses - in the five years after the Parking Meter Zone was established, sales tax revenues in the area quadrupled.

“If not for our parking meters, it’s hard to imagine that we’d have the kind of success we’re enjoying,” Marilyn Buchanan, chair of the district’s parking advisory committee, told SFGate in 2005. ​“They’ve made a huge difference. At first it was a struggle to get people to agree with the meters. But when we figured out that the money would stay here, that the money would be used to improve the amenities, it was an easy sell.”

Similar programs exist in various other cities, including Houston, Hartford, CT, Portland, OR and Ventura, CA. Most recently, Los Angeles approved a pilot program in 2019 that commits 15% of parking meter revenue in the Westwood Village and Lincoln Heights area directly to the local BIDs.

In many of the above examples, meters were installed at parking spaces that were previously free, generating new revenues and advancing broader transportation goals. But relying on parking meter revenues poses potential risks. It may incentivize local organizations to fight against transit or street design interventions that eliminate street parking or transit lanes. To avoid this, one could expand this approach to dedicate a portion of all fees derived from commercial or private curb use, including taxi stands and outdoor dining fees. If carefully designed, such programs can dovetail with other city goals such as reducing traffic congestion and idling, supporting local businesses, and even creating new public spaces for communities. Revenue generated from parking meters on Hartford’s Pratt Street, for example, funds an open streets program on the very same street.

In this way, a city can ensure locally-focused investments offer citywide benefits. A parking meter or outdoor dining revenue program could be part of a more comprehensive strategy for competitively pricing the curb, (in areas that are less economically robust, fees should be more modest). The city could mandate that revenues generated from such programs be directed toward services that support pedestrians, cyclists and transit riders, or expand the investment area beyond the immediate commercial district to the surrounding neighborhood, to ensure local residents feel the benefits, too.

Tax increment financing (TIFs)

While they are more volatile than BID assessments, TIFs have the advantage of only capturing incremental revenue within their district lines.

They are especially common in the Midwest, from Memphis to Chicago (which has hundreds of them). Texas has Tax Increment Reinvestment Zones, and Idaho has Revenue Allocation Areas. They are typically used for capital improvements, but in certain states they can also be used for the ongoing maintenance of those improvements.

In some cases, they issue bonds to build revenue generating improvements – like parking garages – that then are used for funding public space maintenance and programming in the TIF area (the Long Beach , CA BID gets 15% of its revenue from this). Some have posited that TIFs could be used to build commercial properties which, combined with the notion of a Community Land Trust, could be conveyed at below-market values to a community nonprofit which keeps the proceeds.

In some places, like North Carolina, there are synthetic TIFs. This is when incremental tax revenues above a baseline are allocated for special geographically-limited expenditures, but there is not a multi-year legally binding commitment of those funds (e.g. to be used to pay off bonds in 30 years). These are easier to create and are less legally binding but provide another option to use incremental revenues to fund current improvements. Conceptually, some modest form of synthetic TIF (or something like it) could also be a tool for funding the non-capital expenses – like public space maintenance and programming – which generate economic activity.

Prosper Portland, Portland’s economic development agency, is taking the TIF concept one step further with the November 2022 authorization to create a new form of neighborhood-driven TIF. Their website notes that:

“In 2018, a coalition of community-based partners in the Cully neighborhood approached Prosper Portland to explore a community-centered TIF district creation process that could lead to a new TIF model that centers historically underserved, marginalized and underrepresented community voices in the TIF district creation process. To that end, we participated in a co-creation model that centered those most vulnerable to displacement with an explicit goal of stabilization. As growth comes, we want to ensure all Cully’s residents can stay and benefit from the prosperity that growth can bring, rather than be pushed out and replaced by it.”

An element of the program, part of Portland’s Neighborhood Prosperity Network, is that ​“through grants, training, and support from Prosper Portland, each Network organization is responsible for planning and implementing projects to improve the local commercial district.”

Hybrid entities

In a handful of cities, a wide array of place-management tools and funding mechanisms are effectively managed by one entity. In Wichita, Community Improvement Districts can levy both an assessment and an incremental sales tax. In Grand Rapids, the downtown organization combines and manages multiple entities with different revenue streams, while Houston’s downtown organization coordinates several entities that work in concert and draw funds from different sources. In Cincinnati 3CDC is a combined BID and nonprofit development entity. While such massive hybrid entities are not applicable for small BIDs, the idea of some mix of complementary entities providing mixed revenue streams could be explored. Alternatively, the proposed citywide entity could potentially draw funding streams from multiple sources or entities – or receive them from the City, to then redistribute more broadly

Citywide special fees that directly support public spaces or small businesses

In Germany every business must pay a fee to the city chamber of commerce. While that facilitated the recent creation of BIDs as place-management entities, it would be highly controversial here. But San Diego’s diversion of a portion of its existing annual small business registration fee, distributed in a progressive way, is not conceptually dissimilar. Some cities, like Minneapolis, levy a citywide fee for their parks. Such a de minimis fee could be linked to a broader set of incremental public realm improvements implemented by a citywide nonprofit.

Community Land Trusts

Many philanthropies, urban think tanks and entities who have supported Community Development Corporations are increasingly examining different tools for community wealth building. One such tool is that of a Community Land Trust. The 11th Street Bridge Park in Washington, DC, is one of the most cited initial experiments. They developed an Equitable Development Plan which led to the creation of a Land Trust. While conversations related to land trusts often focus on creating affordable housing and retaining residents, they can also potentially address sensitivities BIDs face about generating economic activity without displacing people and businesses.

Community Land Trusts envision a community-centered and place-centered nonprofit owning key assets, from which some market revenue can be generated, but which can also allow for below-market activities or businesses which helps to retain small local businesses. This is similar to the creation of land trusts to save New York Community Gardens, or with the New 42nd Street nonprofit in Times Square.