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Businesses BID on More Taxes

Some commercial property owners see need to supplement city services.

This fall, Alexandria City Council will be asked to approve the City's first Business Improvement District — or BID. Based on recommendations in the King Street Retail Study, the BID's Steering Committee plans to seek its formal establishment and the enactment of a $1 million per year commercial property assessment to finance programs.

"This is the means to implement the King Street Retail Study," said Thomas Fairchild, business facilitator, City Manager's Office, at the Aug. 22 meeting of the BID Steering Committee. Held on the second floor of Landini Brothers Restaurant these meeting are held every Monday afternoon and are open to the public.

He also emphasized, "State law clearly states that city services can not diminish as a result of action by a BID." All BID services will be in addition to ongoing city services.

Right now BID representatives' appearance before City Council is "tentatively penciled in for Nov. 12," according to Mark Jinks, assistant city manager, Fiscal and Financial Affairs. "The business community is now getting down to a level of specifics. You want to have programs that are coordinated," Jinks said. But, before this can happen there will need to be public hearings and a formal vote by council.

"BECAUSE THEIR PLAN focuses on a real estate assessment, it must be activated in 2005. That requires defining the boundaries and other details prior to Jan. 1, 2006. And, Council has to define the 'Special Services District' as to what properties within those boundaries are subject to the tax. The actual implementation of the tax comes within the budget process the end of next April," he said.

City Attorney Ignasio Pessoa verified that a tax on a select group is permissible "as long as that group is directly benefiting from the tax." He also noted that this process can be accomplished in a mandatory manner as being suggested by the BID Steering Committee or on a voluntary basis similar to a non-profit trade association.

"The latter type BID is usually established were there are several large land holders. When there is a large group of land holders and multiple tenants, BID's usually come about as the one being proposed for Alexandria," Pessoa said.

However, as with most initiatives in Alexandria, the need for citizen involvement is imperative if there is any hope of it being implemented. "This is something the city has been working on and there really wasn't any citizen involvement. Then Lois Walker invited me to get involved," said Poul Hertel, a member of the King Street Retail Study Task Force.

"My concern was that this is public space and I felt compelled to get involved so the city did not give away its responsibility. This will certainly be a benefit for business and I don't see any problem with that," he said.

"The only question is how much authority are we going to cede this group. And, the by-laws should keep citizen concerns in mind as well as addressing historic concerns in this area," Hertel said.

THE IDEA TO ESTABLISH a BID for Alexandria grew out of the study undertaken by the city Department of Planning and Zoning through Development Economics of Washington, D.C., and the Odermatt Group of Berkeley, Calif., known as the "King Street Retail Study." Completed in 2003 it addressed the perception that King Street was "dying" with excess vacancies and a loss of commercial development.

That study contradicted common misconceptions and, in fact, proved just the opposite. However, Eileen Fogarty, director, Alexandria Department of Planning and Zoning, admitted at the time of the study's release that the upper part of King Street was doing better than the lower part. "But, overall, there has been no significant loss of commercial/retail enterprise," she said.

The study also noted that between 1996 and 2003 more than 60 million square feet of new commercial space came on line in surrounding jurisdictions. They cited Pentagon Row at 300,000 square feet retail and 504 apartments; Clarendon Market Common at 260,000 square feet retail and 387 apartments; and Shirlington at 143,000 square feet retail.

Revitalized Georgetown was touted as a major challenge to Alexandria because its physical configuration and mixed uses most mirrored Old Town. It has established a BID.

Among the recommendations of the "King Street Retail Study" were the following:

* Consider a business improvement cooperative organization

* Create a steering committee made up of block captains to ensure all actions are coordinated.

(Editor's note: How the proposed BID is potentially structured to operate and be governed will be addressed in Part 2. Also, BID's goals and how these complement or duplicate actions by the city or other organizations will be explored.)