Posted by Robert Lederman on November 26, 1997 at 13:23:06:
from the NY Times
More Curbs Sought on NYC Business
New York Times, Nov 12, 1997
By VIVIAN S. TOY
NEW YORK -- Seeking to curb the
growing influence of business
improvement districts, the City Council
leadership is releasing a package of
proposals today that would make it
harder to create and maintain the
self-taxing districts and would also more
closely regulate them.
The proposed rules would be the first
major constraints on the districts --
widely credited for improving the quality
of life throughout the city -- since the
Council authorized them 15 years ago.
They would also force the 39 districts,
which often have broad management
discretion, to open up their management
practices and more actively involve
property owners within their boundaries.
In a report scheduled to be released
Wednesday, the Council found that
many property owners felt poorly
informed about district operations and
that some complained about
managerial abuses. Still others said
they felt their districts were
unnecessary, thus subjecting them to
an unfair tax. Under a BID, property
owners must pay a special tax that the
city collects and the business district then
uses to improve the district.
Property owners in the Grand Central
district, for example, contended that the
district's leaders carefully
orchestrated a vote to kill plans by
property owners to institute spending
guidelines. They also contend that the
leaders unilaterally dropped one of the
area's largest property owners from the
district's board because he opposed
some of their practices. The report
concluded that the district's leaders went
to great lengths "to obtain unfettered
control and power within the BID."
"After closely reviewing BIDs and
their operations, everything points to
the fact that there are abuses and
potential abuses that have to be
rectified," said Herbert E. Berman,
chairman of the Council's Finance
Committee, which produced the report.
"And as long as they have the imprimatur
of government, they should be required
to adhere to certain standards."
The Finance Committee now must draft
bills to enact the proposals, which have
the backing of Council Speaker Peter
Vallone and therefore are likely to be
approved by the full Council.
The report highlights a tension that has
existed since the BIDs were first
authorized. While the special districts
have been widely praised for using their
tax dollars to pick up garbage, hire
security guards, promote businesses and
otherwise supplement city services,
questions have been raised by
property owners and others about
whether the districts have become
mini-governments that operate with
too little oversight.
The districts' leaders, who have not seen
the Council's report, would not comment
in detail when told about the proposals.
But they have long warned against
overregulation, saying too much
municipal bureaucracy would make it
difficult for them to operate efficiently.
Rudy Washington, deputy mayor for
community development and business
services, said he had not yet seen the
report, but said the Giuliani
administration would review the
proposals. He noted that the
administration had already instituted
some limits on the districts, including a
decision last year to restrict the districts'
ability to sell bonds to finance
multimillion dollar projects.
"This administration supports BIDs
100 percent because they've made major
improvements to the city," he said. "But
we also realize that, like anything else,
there needs to be checks and balances."
While many of the Council's proposals
can be enacted through changes in local
law, some would require the approval of
the State Legislature because the districts
were created under state laws governing
special assessment districts.
State Assembly Speaker Sheldon Silver
said he was open to the Council's
proposals. "We'd be delighted to look at
anything that they think addresses the
problems and concerns in the city," he
said. "The ultimate goal is to be
responsive to the city and do the best that
we can to improve the business climate
and create jobs."
Times Square Business Improvement
District president Gretchen Dykstra ,
noted that the association last year issued
a Code of Professional Standards and
Practices. "It was an attempt by the BIDs
to come up with best practices and
guidelines for BID managers," she said.
The Council report acknowledges that
the association's code was intended to
"insure full disclosure, accountability,
democratic representation and power
sharing within all of the city's BIDs," but
suggests that the code is largely
ignored by some district managers.
One of the Council's proposals would
require each district to adhere to the code
in order to be certified by the city's
Department of Business Services.
A number of the proposals are intended
to correct problems the Council
encountered at the Grand Central
Partnership, one of the city's largest
Many complaints were directed at
the partnership's president, Daniel
Biederman, who also runs the 34th
Street and Bryant Park BIDs and
draws salaries from the three BIDs
totaling nearly $400,000. The Council
would like to prohibit Biederman and
anyone else from managing more than
one BID. Dan Pisark, a spokesman for
the partnership, said Biederman and other
district leaders would have no comment
until they had reviewed the report.
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