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Abstract
Business improvement districts (BIDs)—special districts usually governed by business and property owners—have been portrayed by some observers as private governments serving narrow commercial interests and by others as policy tools—instruments employed by states and general-purpose local governments to mobilize resources and advance public purposes. We use data from case law, case studies of local practices, and a statewide survey of New Jersey's BIDs to argue that they can best be understood as genuine public-private partnerships that serve simultaneously as instruments of public policy which advance general public interests and as self-help entities which serve more particular interests.
Notes
a Statewide average SID size was 341 businesses, median 250, in 2000–2001 (n = 28).
b Statewide assessment/businesses ratios ranged from $185 to $2313 and averaged $678.
a Expenditures for Somerville include an average of $100,000 per year in matching grants for facade improvement projects, funded by a grant from Somerset County and not presented by the DMC in its budget as reported in above. For 2001, these county-funded facade grants totaled $111,890 and are included in the design and maintenance category of expenditures.
1. Mitchell, J. Business Improvement Districts and Innovative Service Delivery; PricewaterhouseCoopers Endowment for the Business of Government: Arlington, VA, 1999. Hoyt, L. The Business Improvement District: An Internationally Diffused Approach to Revitalization. Massachusetts Institute of Technology: Cambridge, MAhttp://web.mit.edu/course/11/11.204/www/webportfolio/inquiry/IBP_WEB_.pdf (accessed January 6 2005). Ratcliffe, J.; Flanagan, S. Enhancing the Vitality and Viability of Town and City Centers: The Concept of the Business Improvement District in the Context of Tourism Enterprise. Property Management 2004, 22 (5), 377–395
2. Mitchell, J., Supra note 1.
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8. By “partnerships” we mean cooperative arrangements of varying degrees of formality that “further the common interests of the partners beyond what is likely to be produced by the existing system or by each working independently.” Lichfield, D. Measuring the Success of Partnership Endeavors. In Public-Private Partnerships for Local Economic Development; Walzer, Norman, Jacobs, Brian D., Eds.; Praeger: Westport, CT, 1998, 97–119, 110. A preferred model of partnership is characterized by “mutual respect, equal participation in decision making, mutual accountability and transparency” between entities that cooperate in order to advance mutual interests but remain distinct and autonomous. Brinckerhoff, J.M. Global Public Policy, Partnership, and the Case for the World Commission on Dams. PAR 2002, 62 (3), 324–336. For present purposes, we draw a distinction between this mutual, balanced form of partnership and the “unequal partnerships” through which publicly assisted private redevelopment efforts have sometimes allocated costs and risks to one partner and benefits to another. Squires, G.D., Ed. Unequal Partnerships: The Political Economy of Urban Redevelopment in Postwar America; Rutgers University Press: New Brunswick, 1989.
9. For a good, concise discussion, see Houstoun, L.O., Jr. BIDs: Business Improvement Districts; ULI—The Urban Land Institute, in cooperation with the International Downtown Association: Washington, DC, 1997.
11. Traub, J. Can Associations of Businesses Be True Community Builders? The Responsive Community, Spring 1996, 29–38.
12. Ostrom, E. Governing the Commons: The Evolution of Institutions for Collective Action; Cambridge University Press: Cambridge, 1990 Ostrom, E.; Walker, J. Neither Markets nor Hierarchies: Linking Transformation Processes in Collective Action Arenas. In Perspectives on Public Choice: A Handbook; Mueller, Dennis C., Ed.; Cambridge University Press: Cambridge, 1997, 35–72. Ostrom, E.; Gardner, R.; Walker, J. Rules, Games, and Common-Pool Resources; University of Michigan Press: Ann Arbor, MI, 1994.
13. Gallagher, T., Supra note 6. Krohe, J., Supra note 6. MacDonald, H., Supra note 4.
14. MacDonald, H., Supra note 4.
15. Traub, J., Supra note 11.
16. Alexander, A. Business Improvement Districts: Progress Toward Implementation in the UK. European Retail Digest, March 2003, 13–15. Bradley, R. Downtown Renewal: The Role of Business Improvement Districts. PM: Public Management, February 1995, 9–13. Colley, S. Betting on BIDs. In American City & County, 1999; Vol. 114, 21–31.
17. Gallagher, T., Supra note 6. Krohe, J. Supra note 6. Mallett, W.J. Managing the Postindustrial City: Business Improvement Districts in the United States. Area 1994, 26 (3), 276–287. Zukin, S., Supra note 6.
18. Pack, J., Supra note 5.
19. Levy, P. R., Supra note 4. Levy, P.R. Making Downtowns Competitive. Planning, April 2001, 16–19.
20. Alexander, A., Supra note 16.
21. Levy, P. R., Supra note 4; 130.
22. Levy, P. R., Supra note 4. Levy, P. R., Supra note 19. An anonymous reviewer points out that an alternative arrangement employed in such places as Atlanta, Denver, Seattle, St. Louis, Houston, and Raleigh, is for BID stakeholders work through companion membership organizations to address policy issues, while keeping the BID organizations themselves nominally focused on day-to-day service and management activities such as security and sanitation.
23. Gallagher, T., Supra note 6. Why RiverCenter Should Be Abolished. triCity News (Asbury Park, NJ), June 24, 1999, 6–7.
24. New Jersey's statute uses the terminology “special improvement district.” Practitioners in New Jersey tend to use the state-specific term “special improvement district” interchangeably with the more generic term “business improvement district,” and we have adopted that practice here as well.
25. An Act Authorizing Municipalities to Undertake, Develop, Construct, Operate and Finance, as Local Improvements, Pedestrian Malls, and to Create Special Improvement Districts and District Management Corporations, and Supplementing Chapter 56 of Title 40 of the Revised Statutes, L. 1972, C. 134, Amended by L.1984, C. 151, Sec.1. In New Jersey Statutes Annotated (N.J.S.A.), 1999, sections 40:56–65 to 89 as amended.
26. New Jersey's 566 incorporated municipalities collectively encompass the total land area of the state.
27. This reliance on a “discretion” approval test rather than the more usual “petition” or “objection” methods of approval makes the New Jersey statute somewhat atypical in the United States., as two anonymous reviewers pointed out.
28. 2nd Roc-Jersey Associates, 3rd Roc-Jersey Associates, 4th Roc-Jersey Associates, and 5th Roc-Jersey Associates, and Shav Associates v. Town of Morristown, Morristown Partners, Inc., and Director, Division of Local Government Services. N.J. Lexis, Supreme Court of New Jersey, 1999, 545.
29. Ramon Gonzalez, et al. v. Borough of Freehold. New Jersey Appellate Division, 1994 (unreported).
30. The explanation for this apparent contradiction appears to have been a lack of communication between the onsite property manager and the initiator of the lawsuit. Not all of the owners of Headquarters Plaza were involved in actively overseeing regular operations at the complex during the period when the onsite property manager was helping to organize the SID, and one key owner apparently was startled to receive the initial assessment bill.
32. McNally v. Township of Teaneck. N.J. Lexis, Supreme Court of New Jersey, 1977, 253.
33. Louis Fanelli and Louis Sheperd, Robert Briggs, and Raymond Wylie v. City of Trenton, and Trenton Merchants Association and Central Trenton, Incorporated. N.J. Lexis, Supreme Court of New Jersey, 1994, 493.
34. Burchell-Listockin and Associates, Supra note 31; 25.
39. Interestingly, in the case of Red Bank, a number of the DMC activists began moving into the borough in the late 1990s and early 2000s, from surrounding communities.
40. Walker, J., Supra note 4.
41. Briffault, R., Supra note 35.
45. MacDonald, H., Supra note 4.
46. Salamon, L. M., Supra note 7.
47. Lakoff, S. A., Supra note 3.
49. Denhardt, R.B. Theories of Public Organization, 3rd Ed; Harcourt Brace College: Fort Worth, TX, 2000. Kirlin, J.J. The Big Questions of Public Administration in a Democracy. PAR 1996, 56 (5), 416–424.
52. Zukin, S., Supra note 6.
53. Baer, S. E., and Marando, V. L., Supra note 5.
54. We thank an anonymous reviewer for pointing this out.
55. The reorganization of New York City's large, politically powerful, and highly successful Grand Central Partnership under pressure from Mayor Giuliani illustrated this in practice. See Bagli, C.V. Business Group Fails to Mollify Giuliani. The New York Times, September 24, 1998, B5. Pristin, T. After Guiliani Foes Quit, Business Group Drops Plan to Reorganize. The New York Times, December 24, 1998, B7. Pristin, T. Finance Commissioner to Head Grand Central Business Group. The New York Times, January 21, 1999, B7.
56. Barnekov, T.K.; Rich, D. Privatism and Urban Development: An Analysis of the Organized Influence of Local Business Elites. Urban Affairs Quarterly 1977, 12 (4), 431–460. Squires, G. D., Supra note 8. Stoker, G. Regime Theory and Urban Politics. In Theories of Urban Politics; Judge, David, Stoker, Gerry, Wolman, Hal, Eds.; Sage Publications: London, 1995, 54–71.
