Why should commercial property owners in a specific area of Alexandria be required to pay higher real estate taxes than those throughout the rest of the city? Wouldn't this put businesses located in that area at a cash flow disadvantage to those located outside such a designated area?
Those two questions have been raised concerning the proposed establishment of Alexandria's first Business Improvement District. They will be posed to City Council this fall when they are asked to formally establish the BID and impose a tax of $1 per $100 of assessed value on each Commercial property within BID boundaries.
Those parameters are defined by the BID Steering Committee as the length of Old Town's King Street from the river to the Metro station and one block on both sides, north and south, to the middle of Cameron and Prince street. At Washington Street, an additional two blocks, north and south, will be within the BID.
If approved by council, the city will collect the funds and turn them over to the BID governing body to carry out the organization's anticipated programs. It is estimated by the BID Steering Committee, composed of commercial property owners in defined corridor, the assessment would raise approximately $1 million annually.
If the BID concept is approved by council, membership for those with properties in that area would be mandatory. It is this element of the proposal that appears dictatorial to some. They argue for a voluntary membership. Proponents insist that would not work.
A major proponent of the BID concept is Ronald Kaufman, president, PMA Properties, with holdings in Old Town and Del Ray. He is serving as chair of the BID Steering Committee. "Because of my involvement in Old Town," he said, he saw first-hand "that businesses were not doing as well as before."
"Twenty five years ago King Street and Old Town were much more attractive and vibrant," Kaufman said. "Then it seemed to deteriorate. We believe that the private sector is much better equipped to reverse this trend."
"If we accomplish this we can transform the city," he said. "All the BID wants is to have some equity in this revitalization."
What would this money pay for? As listed in their promotional literature:
* Street/sidewalk cleaning
* Increased public safety
* Addressing parking challenges for shoppers, employees and residents
* Planting more trees and flowers
* Marketing Old Town with banners, brochure and visitor information
"Right now the city is only able to do so much. The BID will increase city services. The more services, the better looking the area, and the more appealing it is to residents and visitors alike," said John Irvine, Steering Committee member and manager of the concept.
"We are communicating with all commercial property owners in this area to see if they are in favor of this," Irvine said. He reported to the committee that as of early Aug., 1,600 brochures have been mailed to licensed businesses in the BID area.
"So far we have received overwhelming support," Irvine said. "But, it should be emphasized that residents in the BID area will be paying nothing. Only commercial property owners will be paying."
ONE OF THE COMMITTEE'S major concerns is to address the perception that Old Town lacks adequate parking, thereby discouraging shopping. They see this as particularly true in the Upper King Street area.
"There is no master plan for parking in Old Town," Kaufman said. "Our congestion is somewhat due to employees parking on the street. We need better signage and garages need to stay open longer and get employee vehicles off the streets."
According to BID statistics, there are over 6,000 parking spaces in the commercial core of Old Town.
From 2001 through 2004 during the Christmas holiday season street parking was free after 5 p.m. This was initiated at the behest of the Alexandria Convention and Visitors Association to promote shopping in Alexandria and to compete with free mall parking. That was discontinued in 2005 to provide $125,000 for city coffers to promote ACVA's holiday promotion campaign.
Goal number two of the BID's business plan is to smooth over the parking, transportation and pedestrian situation in the middle of Old Town's business area. They plan to accomplish this by:
* Creating a parking management plan
* Working to facilitate sharing of existing parking facilities
* Providing additional parking on available space
* Working with business to maximize the use of public transportation and offer alternatives to personal vehicles
SEVERAL OF THE BID GOALS mirror those of the established commercial/retail aims of KSMET, the business association representing many merchants on Upper King Street, and ACVA. These include: sponsoring or accommodating community activities and events; publicizing those events; improving visitor/tourist access and information; and attracting a broader range of retail, services and amenities for the business and residential population.
In addition to KSMET president, Lois Walker, five other current or former KSMET board members serve on the Steering Committee. The activities of ACVA are not mentioned in the plan.
As defined in their draft Operating Plan, the proposed boundaries of BID encompass assessable properties valued at $1,083,733,200. Within this group are 41 commercial office buildings, five hotel properties, 49 restaurants and an array of other businesses ranging from financial institutions to warehouses. Approximately 1,300 businesses are located within the BID boundaries.
Also included within its parameters are tax-exempt properties with an estimated value of $218,694,000, residential properties assessed at $72,490,400 and vacant land with an estimated worth of $13,537,200.
If approved by City Council, the BID will be governed by a Council of Directors, elected by the membership of the corporation, which will be composed of the owners of commercial property in the service district, according to BID's draft Operating Plan. Daily operations will be the responsibility of an executive director hired and supervised by the Council.
Initially this council will consist of 25 members: 13 commercial property owner representatives and six commercial tenants, both elected by the BID Council, and six City Council appointees.
It will issue an annual report on its progress to the City Council and membership. As stated in the draft plan, "The term of the Old Town BID will begin following approval by the City Council." They are aiming for a start-up date of July 1, 2006.
However, all of these plans are subject to approval and potential modification by City Council, According to City Attorney Ignasio Pessoa. "It will be up to City Council, following the public hearings, to make the final determination as to details," he said.
A demonstration of what the BID hopes to accomplish is planned for the 700 block of King Street in the near future. Under the leadership of Kaufman, merchants and property owners in that block hope to turn it into a showplace that will highlight what can be done throughout the BID.
"It's been very interesting to see how you can get a whole block to work together as a team when you spend a little time with them," Kaufman told the Steering Committee at their Aug. 22 meeting.
Additional information is available from property owners who have already signed on. They can be identified by a new BID logo, in green and white with the word "Yes."
There is also a BID Web site available at www.OldTownBID.org.