Washington, D.C., is on the verge of welcoming a new business improvement district (BID)—the Anacostia BID in the southeast quadrant of town—bringing the city’s BID tally to nine and presenting new opportunities to dramatically transform more neighborhoods and bolster the city’s overall economic well-being.
Business improvement districts are areas, created by state and local government, within which property or business owners pay additional property taxes. In return, the property or business owners share authority with government in determining how the money is spent to improve the area. The government and business community collaborate to promote safety, maintenance, public space improvements, economic development, and a host of other benefits. Cities and counties still provide basic services, but BIDs provide the supplemental services that great commercial districts need to be competitive.
Currently, Washington has seven BIDs and one community improvement district (CID)—BIDs serving downtown, the Golden Triangle, Georgetown, Capitol Hill, Adams Morgan, the Capitol Riverfront, and NoMa (North of Massachusetts Avenue), plus the Mount Vernon Triangle CID. The CID is unique among the districts because its special taxes apply to residential properties, as well as to office and retail holdings. Together, these districts raise more than $20 million annually to ease the burden on city government and provide services—from project planning and transportation to services for the homeless and special events—that help make their respective areas successful.
The Downtown BID, the city’s oldest and largest, was formed in 1997 and is a good example of how BIDs function. It was started just as downtown’s new multipurpose arena, now known as the Verizon Center, opened. “Back then, downtown was perceived as dull, dirty, and dangerous,” says Richard H. Bradley, the Downtown BID executive director. “Today, its transformation is linked to the BID’s ability to forge critical partnerships, act as a catalyst, provide bold leadership, and reposition the downtown brand to deliver a remarkable urban experience.” Developers were interested in opening new projects near the arena, which the Downtown BID helped make possible by ensuring that the quality of services matched the quality of the planned buildings.
Since the Downtown BID’s inception, the one-square-mile (2.6-sq-km) BID area—from Massachusetts Avenue (including the Walter E. Washington Convention Center) on the north to the National Mall on the south, and from Union Station on the east to the White House and 16th Street on the west— has improved in many ways. The downtown has added 61,000 office employees and 6,400 residents, and is visited by 6.3 million people annually. Rental rates for office space have risen 69 percent, and hotel rates have risen 47 percent.
Each year, the Downtown BID performs a net fiscal impact analysis showing the area’s impact on local government revenues through sales and property taxes. Together with the neighboring Golden Triangle BID area to the northwest, the Downtown BID generates $797 million more per year in tax revenue than it costs the D.C. government in services—a contribution that approximates the entire D.C. public school system budget.
In 2005, the city’s BIDs established a D.C. BID Council to discuss common concerns and coordinate strategies and activities; last year, the group filed articles of incorporation to become a nonprofit entity. The BID Council has identified priorities centered on public space, safety and security, planning and development, and transportation. It already has begun to work on street vending and newspaper box improvements; to partner with the National Park Service and the city to improve parks; to share information about homelessness; and to help guide the K Street corridor’s future. It also has begun to execute the Center City Action Agenda, a plan compiled by the D.C. Office of Planning that establishes new development and place making goals and extends the city’s urban core into emerging areas that can absorb the growth needed to sustain the city’s economic momentum and fiscal stability.
The city has made significant investments in Mount Vernon Triangle, NoMa, and the Capitol Riverfront as key areas for new development, with BIDs playing a crucial part of the strategy to encourage development in these areas. The BIDs also benefit from the U.S. General Services Administration’s (GSA) Good Neighbor Program, which supports urban development through community partnerships, with GSA negotiating contracts with local BIDs for security, maintenance, cleaning, and other services.
Greater Washington also has benefited from BIDs in commercial areas in northern Virginia (Crystal City and Rosslyn, both in Arlington County), and from similar urban districts in the Maryland suburbs (Bethesda and Silver Spring, both in Montgomery County). Earlier this year, the Downtown BID testified in favor of successful Maryland state legislation enabling formation of BIDs throughout the state.
