Another BID at Improvement

Several months after City of Pittsburgh voters opted to increase their property taxes in order to fund the Carnegie Libraries and after residents and businesses in the South Side never got a chance to see if a Neighborhood Improvement District (NID) concept would come to pass and what higher taxes would do for improvements in that part of the City, the next improvement district is being proposed in Lawrenceville this week in City Council.

There are still only two improvement districts in the City, one in Downtown and one in Oakland. Others have been tried in East Liberty, West End, and the aforementioned South Side. If the opposition to the proposed Lawrenceville BID reaches the point where 40% or more of the affected property file objections to the plan then the BID plan does not move forward.

According to published reports the fee assessed on businesses would be based on the linear storefront width rather than on property value which would likely see big changes as the new assessments would likely be in effect about the time the approval process would be completed.

Opening BID

If the legislation passed this week by City Council becomes law, the business improvement district for Downtown Pittsburgh will be extended for another four years through 2016. It has been in place since 1996 (amended six times since then) with a special assessment levied on the land value of commercial properties within the district for "administrative services and improvements". If approved, the BID will have existed two decades when the next term is completed.

The Pittsburgh Downtown Partnership (PDP) acts as the agent for the BID and carries out services related to the District. The renewal of the BID comes one week after the PDP announced its new CEO.

A 1996 study by the Allegheny Institute showed that the initial expenses were slanted more toward marketing/advocacy than cleaning/security, the exact opposite of the situation in other improvement districts around the country at the time. The study asked "if the primary purpose of the BID is to make the downtown cleaner and safer, then why is such a disproportionate share given to marketing, advocacy, and administration as contrasted with the other successful BIDs?" That year $558k of the $1.270 million budget (44%) went toward "security and cleaning".

Has that situation changed? In the PDP’s 2011 business plan the BID expenditure total stands at $1.476m, about 16% higher than 1996. This year, "clean and safe" expenses are $959k, or 64% of total spending. So it is accurate to say that a higher percentage of resources are being devoted to what could be termed the core functions of the BID. "Marketing" was $240k, or 16% of total expenditures.

But comparing the growth rates of these two functions from the PDP budget shows that while "clean and safe" grew 9% from 2007 through 2011 (audited compared to budgeted) "marketing" grew 43% from $167k to $240k. Total BID expense (clean and safe, marketing, housing, planning and economic development, transportation, and administration) grew 13% over the same time frame, from $1.305 million to the aforementioned $1.476 million. All categories were dwarfed by the growth in administration, which nearly doubled from $93k in 2007 to $183k in 2011.