Supporters of creating a business improvement district for downtown Watertown believe it would enhance the area and lure foot traffic.
Those who own business property within the district would be assessed a certain amount to pay for the services to be provided and the personnel to oversee them. These property owners could then take a deduction for their assessments on their taxes.
“A business improvement district provides services that enhance the area it encompasses like daily trash pickup, improved snow removal, event coordination, collaborative marketing and beautification projects,” according to a story published Oct. 22 by the Watertown Daily Times. “Districts are typically financed through an assessed fee or [levy], and the payment rate would be assessed against the property owner, although it could be passed on to tenants.”
Joseph A. Wessner, president of the Watertown Downtown Business Association, is the chief proponent of this plan. Members of the organization have discussed the idea for more than two years. In November 2018, former City Manager Richard M. Finn advised the group to consider such a proposal.
“BIDs improve the look and feel of their districts. Street cleaning and decorations, public art, events and festivals all contribute to make the district a destination. Look up Wilmington, N.C., or Geneva in Western New York — they both have BIDs,” Wessner wrote in a column on this page Feb. 25. “The added foot traffic and visibility of BID employees, improved signage and cleanliness contribute to a feeling of security for residents and visitors to BIDs. Check out Auburn and Ithaca — they have BIDs as well. BIDs attract businesses. They have extremely high occupancy rates for commercial spaces. The average BID runs about 90% to 95% full occupancy for retail and residential spaces. Who wouldn’t want to be in a neighborhood that is clean, active and safe?”
There is no doubt that BIDs have some appeal. But not every property owner within the proposed district is on board with the idea. The plan has more than a few detractors.
“Donald G.M. Coon III, managing partner in 200 Washington St. Associates, which owns two large downtown office buildings and the Paddock Arcade, expressed some of the reasons why he and other bigger property owners have not signed the petition. The owners with the most downtown property already do some of those services on their own, such as snow removal and cleaning sidewalks in front of their buildings, so what the BID would provide would be redundant, he said,” according to a story published Feb. 27 by the Watertown Daily Times. “They don’t see the benefits of the district that some smaller property owners might, he said. The BID would have an annual budget of $194,000, funded by its members through a special assessment billed to property owners. That works out to $2.62 per $1,000 of the assessed value with a cap of $5,000 per property. Residential properties up to three units per building are exempt from the levy. Under that formula, it would equate to a [20%] to 25% property tax rate on the buildings that Mr. Coon and his partners own. It would cost about $22,000 a year, he said.”
While the assessments would be tax deductible, property owners would still need to come up with the money for the assessments beforehand. In addition, there’s no guarantee their taxes would be reduced by a corresponding amount through a deduction.
They also could pass these costs on to their tenants, but that could make leasing space in downtown buildings less affordable.
In addition, fees paid by property owners would become part of Watertown’s budget. This may well work against city officials trying to keep the budget below the state-mandated tax cap.
There also is a question of liability regarding a BID. If an incident causing injury or property damage occurred within the district, would all property owners share responsibility now that they are collectively striving to keep sidewalks clear of snow and debris?
And how would tasks such as snow removal be prioritized for individual businesses? Should they clear the snow off their land when it’s necessary or wait until a crew hired through the BID to finally come to do the job?
Snow removal can be an expensive undertaking. Will the BID’s annual budget be adequate to finance this for all participating businesses?
Are government-owned buildings exempt from the assessments? Would BID participants still be responsible for the maintenance of these sites?
Land owned by nonprofit organizations within the district wouldn’t be subject to the assessments. Yet these groups would still benefit from the BID efforts at the expense of property owners who pay the fees.
Downtown has plenty of advocates who already work together and could work together better. Another committee to rule downtown doesn’t make much sense.
Much of the revenue raised through a BID would go toward paying an executive director to manage the program. Would this merely create a new position to oversee work that could be performed by businesses within the district on their own?
We appreciate the desire to see more done to enhance downtown, and BIDs have worked in many communities throughout New York. But it’s not a good fit for Watertown at this time.
Much has already been done to improve this area. We’re seeing projects undertaken that are being financed through the $10 million the city received through the state’s Downtown Revitalization Initiative. Property and business owners who become more engaged could accomplish at least some of the goals outlined with creating a BID such as sponsoring more events and beautifying downtown.
The novel coronavirus pandemic has hit everyone hard. The economy has not recovered from government measures that needed to be implemented to ensure public safety.
So the BID proposal should be shelved for the time being. Let’s get the region back on track financially and see how downtown enhancement efforts already underway fare over the next few years. Then we can revisit this idea to see if it’s warranted and feasible.