Staff Reporter

Business improvement districts, widely hailed as a means to revive struggling retail areas, are turning out to be easier said than done.

Although 39 such districts, known as BIDs, were in various stages of formation in Los Angeles last year, only six were actually approved by the city.

In the San Fernando Valley alone, nine BIDS proposed in mid-1996 remain on the drawing board.

“I figured they’d all be done in six to nine months,” said business owner Walter Prince of Northridge, an early advocate of BIDs in Granada Hills, Northridge and Chatsworth.

Under a BID, property owners and/or merchants in a commercial area are typically assessed an annual fee to pay for street improvements, security guards and other measures designed to promote commerce.

Prince and others blame the delays on several factors including the difficulty of getting the participants to tax themselves, particularly with the recession fading from memory.

“It’s always harder to do it in a good economy,” said Nancy Hormann, a Sherman Oaks-based consultant who helped form California’s first BID in downtown Sacramento and who is working on several in the Los Angeles area.

The districts “are always easier to form when people are in a desperate situation,” she said. “It’s always harder to sell people on protecting their investment than building their investment.”

Other reasons cited for the delays include the cumbersome approval process, which is blamed for killing momentum.

“Once you’ve got them going on it, you’ve got to move,” Prince said. “If you drag these things out too long, people just lose interest in them.”

Currently, there are 11 active BIDs in the city, in communities including Hollywood and Larchmont Village.

Earlier this month, members of the City Council citing the ability of a BID to markedly turn a faltering business district around approved a streamlined process for getting one approved by the city.

The Business Improvement District Policy is intended to streamline the process by establishing clear guidelines for getting a district approved rather than the hazy, complicated process it has been and by using an inter-departmental task force to oversee the development of BIDs.

Those familiar with the BID process say that will help, but that the biggest obstacle remains convincing businesses of the need for a BID and in getting them to reach a consensus over how it should be structured.

“BIDs are not easy to put together,” said Larry Kosmont, whose Kosmont & Associates Inc. helped form the Century Corridor BID last year.

“The first thing you need is a high level of cooperation between a variety of property owners, and that’s not always easy to get,” he said.

Prince agreed, noting that the consultants who help put together the BID packages have a tough job.

“You’re talking to independent business owners and property owners who all have their own ideas,” he said. “You have a lot of independent minds who are not used to other people telling them how to do things.”

In the city of L.A., there are actually two types of business improvement districts: standard BIDs, which are funded by assessments collected from business owners within a district’s boundaries, and property BIDs, which are funded by assessments attached to the property taxes of those who own buildings, parking lots and other property in the district.

Part of getting cooperation between various business or property owners often involves simply educating them that the assessment is not a city-levied tax, and that they have control over how the assessed money is spent.

But even with that knowledge, many still view the additional money they spend which is often based on such things as how much street frontage a business has as a tax.

“Many property owners are reticent to get involved in a process that results in an additional tax bill,” Kosmont said.

Nevertheless, city officials say, BIDs are more popular than ever, particularly given the success of districts both inside and outside the city a section of Hollywood Boulevard, the Fashion District in downtown L.A., Old Town in Pasadena and Third Street Promenade in Santa Monica.

“L.A., I think, got a slower start than other cities in getting the initial process going,” said Deborah La Franchi, an assistant deputy mayor who specializes in promoting BIDs. “Now that there are definite success stories within L.A. that they’re learning from, it’s steam-rolling at this point.”

While the success of other BIDs may help move those in the planning process along, future BIDs may have a bit more difficulty. That is because L.A. city seed money for starting BIDs typically a one-time $15,000 to $75,000 grant that BID organizers use to help pay consultants recently ran out.

La Franchi and others are now looking for funds in the city’s general fund and other sources to provide seed money for future BIDs.

“Any new BIDs at this point coming in, there’s nothing available for them,” La Franchi said of the seed money, which BID organizers are required to match. “But that doesn’t mean they can’t start the process.”

No posts to display