Some Observations And Perspectives On A Downtown BID

I guess it is no great wonder that people are bugging me for a take on the proposal by our Downtown advocacy organization for a Business Improvement District.

In the career from which I retired back in 2009, I was an executive overseeing BID-like Community/Destination Marketing Organizations (DMOs) first as a non-profit contractor in Spokane, then as a voter-designated non-profit in Anchorage and most recently as a public authority in Durham, as these organizations are established in North Carolina with yet another layer of accountability.

DMOs date back 115 years but didn’t really become BID-like until the 1960s and 70s about the time my career launched and near the same time the first traditional BID such as the one proposed for our Downtown originated in 1974.

Traditional BIDs designate a special district wherein owners of both personal property such as vehicles and real estate are are levied a higher tax to fund services to benefit only that district.

DMO’s are BID-like because beginning in 70’s they transformed from being funded by public grants and private memberships to being self-funded by a dedicated special sales-type tourism development tax levied on the rates paid by the 20% of visitors staying overnight in commercial lodging facilities.

The special tourism tax was pioneered and dedicated to funding community-wide marketing of the jurisdiction where they were collected (not just a specific types of businesses or sub-areas) by generating visitor-centric economic and cultural development back into that jurisdiction. DMO funding is now also increasingly supplemented by tourism BIDs or special prepared food and admission taxes to spread the cost over more of those who benefit.

In summary then, both types of BIDs levy a special tax either on a specific consumer or property owners in a specific district to fund services specifically to benefit only the jurisdiction (district or community) where they were collected.

Granted, I’m a bit out of touch since I retired but given my background, and after reading and listening to presentations here are what I see as a few pros (positives) and a few cons (concerns) regarding the proposal for a Downtown Durham BID:

First the Pros:

• As with anything Downtown Durham Inc. (DDI) does the proposal for a Downtown BID is very well thought out as well as open and transparent from what I have seen. Apparently tentative votes to approve have been secured but there is still time and I believe a willingness to embrace public comment and make adjustments.

• With the proposal to deploy 40% on overall appearance, DDI grasps something not yet reflected by our local governments. As a comprehensive overarching strategy, appearance can reduce crime, improve public health, extend the life of infrastructure, increase tax valuation, engender positive perception and pride, lower barriers to economic development and much more.

• DDI has good reasons for proposing to team with an out-of-state contractor to handle the BID services even though a local or locally-developed alternative, had they existed, would leverage more economic return for taxpayers. As BID-like organizations did under my watch for marketing intelligence services, it can be valuable to have outside perspective and objectivity or as a means to glean “best practices” when an endeavor such as the proposed Downtown BID is new to the community. This contractor appears to know its stuff.

• A BID is much fairer overall than piecing together public grants and memberships because everyone participates in both the costs and the benefits. It promises the level of maintenance for public space throughout Downtown equal to that now privately funded by developments like Brightleaf Square, the headquarters for Self Help and Measurement Inc., Peabody Place, American Tobacco, City Place, TND Partners and many others.

• The proposal promises to respect and foster the genuine and authentic texture so much a part of Durham’s unique sense of place and overall brand including Downtown. I trust that DDI’s current executive will embed that value so deeply that these funds will never be turned around by future administrators or governing boards who might be tempted to make Downtown too slick and shinny or Vegas-esque.

• The proposal promises to foster indigenous events that leverage Durham’s unique sense of place and BID funds give Downtown the means to be self-reliant while stretching resources by respecting and leveraging the strengths of other organizations with missions to be community-wide in scope.

Now a few concerns:

• Often elected officials across the country including a few here at home seem resentful of special, dedicated taxes. Money is power to them and a few always seemed determined to find crafty ways to undermine or redirect dedicated funding even when it subverts public policy. Ironically, some Downtown Durham interests have even been complicit in undermining the public policy marketing use for which the special tourism tax was meant to be dedicated. As opponents of this proposal fear, the integrity of a Downtown BID may be no less invulnerable as officials come and go in the future.

• Feelings are mixed about DDI being the City’s and County’s conduit for the BID funds. It has been a stroke of genius for local governments to underwrite the organization’s relentless focus on advocacy/public policy such as keeping officials and community-wide departments ever-vigilant of revitalization, closing gaps and overcoming barriers. I hate to see that focus diluted and maybe there are both/and alternatives that will allay some of those opposed where BID funds are administered by DDI while under the governance of an inclusive and publicly appointed, resident-only board, while DDI’s private self-appointed board continues to oversee its advocacy mission. Regardless it is time DDI underwent third-party accreditation.

• Understandably non-Downtown taxpayers are eager for the returns promised on investments from hundreds of millions of dollars shouldered community-wide by businesses and residents as well as visitors to get this small but significant geographic area back on its feet. Deservedly they may feel it is time to be recompensed if there is room for an extra assessment. But Downtown has a ways to go yet and as long as these non-Downtown taxpayers are shown respect and recognition by Downtown, I think they understand the need to be patient.

• The promotion proposed for the BID appears over-reliant on advertising maybe because it is simpler to explain and gives many an ego rush but ads are just one component of promotion and with limited credibility because it is “you talking about yourself.” Hopefully, whatever promotion mix is used with BID funds, will be comprehensive and data-driven and synchronized to leverage with the overall marketing of Durham. Ads can work fine to pull residents Downtown for events and as a very efficient “twofer” within the visitors guide to both harvest Downtown’s share of existing visitors and reach the nearly 8 in 10 business executives who, according to national studies, shop a community first as a visitor before making official contact about relocating a business.

For nearly a decade and a half, I have urged creation of a BID for Downtown Durham and while I truly do understand and empathize with the concerns being raised, I believe this is a sound, equitable proposal and the dawn of a new era.