Business Improvement Districts, or BIDs, are city-approved formal organizations whose mission to provide local businesses with a cleaner and safer environment. But for some property owners and commercial tenants, they are just another tax collector.
That seems particularly true the Fulton Street Business Improvement District in Brooklyn, known as the Fulton Area Business Alliance. The District covers a commercial strip from Rockwell Place in Fort Greene to Classon Ave. in Clinton Hill (see map). The Alliance has made its mark in part by expanding the size of the district, and it continues to levy increasing assessment fees on the property owners and merchants inside its boundaries. But many of them question what benefits them in return.
For example, Mabadeje Ganiu Demu, a property owner, pays an assessment of $4,000 for four buildings in Fort Greene, including an empty lot and a building under construction. “It’s sucking our blood,” said the Nigerian immigrant, who came to Fort Greene in 1984. “Nothing improved since the BID was formed. They are providing services that make no significant change.”
Rocky Widdi, owner of the Met Supermarket on Fulton near St. James Place in Clinton Hill, pays up to $15,000 a year in taxes. This includes BID assessment fees of $1,350, according to his property records. In return for the mandatory fees, the Alliance is supposed to bring extra security and sanitation services, and promote businesses in the shopping strip. Widdi doesn’t see that. “For what? Where’s the marketing for our business? Where’s the security that they said they would bring in to our street?” he said. “As business owners, we pay taxes, taxes, and more taxes. So why do we need to be taxed again?”
The city approves an increased budget
According to the New York City Small Business Services department, all businesses within a designated Business Improvement must pay the district’s assessment. The fees fund the operating budget of the district. In the case of the Fulton Area Business Alliance, last March the City authorized a large increase in the annual amount that can be spent by the Alliance, from $300,000 to $500,000. The average annual assessment was $1,569.28 prior to the expansion, and that average rose to $1,902.27. Some Alliance members, including Widdi, whose fee went up 10 percent last July according to his property records, are concerned that the fees will hike up further.
He says he feels trapped. Widdi’s family members also own a property on Fulton St., between Cambridge Pl. and Grand Ave., where they pay assessment fees for seven commercial tenants. “We can’t opt out of this, or you’ll get a lien on you building and eventually lose it,” he said.
Phillip Kellogg, executive director of the Alliance, explains the new assessment formula this way: Previously, the fee was calculated at $48 per linear foot with an additional property fee of $120 for properties in the corner of a street. Now, 80 percent of the fee is derived from the old footage formula, with the rest from assessed value.
“The Alliance’s previous assessment formula of ‘Frontage Only’ meant that a property would be charged the same assessment whether it was a vacant lot or a new mixed-use development eight-stories tall,” Kellogg said. The new assessment will allow the highly developed property to pay more, in order to align with the increased population and demands on services they will be generating. “It will help make things more equitable,” he said.
Kellogg says that the increasing population in the area has put an increased demand on services. He noted that the Alliance had not pursued an assessment increase since its formation. “Raising the assessment cap will allow flexibility to expand its services to the District, as determined by the board,” he said. The executive director promised additional marketing efforts, targeting both residents in large new developments and existing residents, in order to drive more foot traffic to the commercial strip.
Jessica Stockton Bagnulo, an owner of Greenlight Bookstore in Fort Greene, at the corner of South Portland Ave. and Fulton St., said she pays $940.87 a year for assessment. She considers the fee significant, but not unreasonable. “The process of improving Fulton Street as a commercial district isn’t instantaneous; it takes years of all of us putting into the BID to improve the traffic and vitality of this corridor, and I think it’s worth it.”
The Fulton Area Business Alliance, formed in 2008, collects the assessment fees from property owners of 207 ground-floor retail businesses in all. The executive director said that no budget increase is on the horizon. “The District will not increase their operating budget beyond the current budget amount of $375,000 unless there is a strong necessity.”
Assessment fees passed on to commercial tenants
In many cases, the assessment fees to property owners are passed on to commercial tenants. Tenzin, who only wanted to be identified by his first name, is the owner of the Green Planet grocery store in Clinton Hill. He says he does not know how his assessment fees are calculated, but the overall payment of the property tax and the assessment fee that are passed on from his landlord seems to him to be increasing. “I’m paying $4,000, one-third of those payments which my landlord should be paying. Those taxes doubled since 2008, for benefits that I’m not seeing.”
Taxes passed on from property owners can be a burden to small business owners who are already in an economic downturn. Within one block on Fulton St.—between Saint James Pl. and Washington Ave.—three stores went out of business earlier this year: Crossfit Kingsboro, Brooklyn Victory Garden, and Cochinita. The ground floor spaces remain vacant. Tess Gill, who owned Brooklyn Victory Garden, left a note on the door of the vacant space: “Five years was a long run, but it’s time to move on. We’ll miss feeding you.”
“I’m one of the survivors,” said Andrew Thompson, owner of Golden Krust Caribbean Bakery, adjacent to the closed stores. Thompson said the margin to stay afloat is very thin. As he sees it, the assessment fee is “just another burden, considering other costs such as the rent, property tax, utility fees, insurance fees, payrolls, and tickets from the sanitation department for garbage thrown out in the storefront.”
Thompson underlines the fact that he did not agree to be part of the District when it was formed in 2008. “An assessment fee is just another tax that was just thrust onto us,” he said. “We don’t have enough time to raise any concerns. We’re busy trying to survive.”
Opinions about the Business Alliance seems to depend in part on location. The commercial stretch in Fort Greene—between Rockwell Pl. and S. Oxford St.—seems to be thriving, but the complaints against the Alliance mostly comes from the Clinton Hill area of Fulton St. There are nine new buildings with retail spaces on the ground floor, in the area, according to DNA info’s recent report. Thompson said the gentrification process is bringing new businesses into the shopping strip. “But at who’s expense?” he asked.
Last July, the boundary of the Alliance was extended to include, among other structures, Brooklyn Music Academy, and a new 53-story residential tower—Ashland—in the Brooklyn Cultural District.
David Rivera, a property owner of 852 Fulton St. since 1995, is a supporter of the Alliance District. He says that small business owners should meet the new demands that the new type of residents are bringing in for the neighborhood, for the common good. “We have more mid-class consumers in the strip, and the small businesses have to keep up,” he said. He is also a newly recruited Board member of the Alliance. Rivera says he has seen mom-and-pop stores diminishing, but he has also seen some businesses that are flourishing since the formation of the Alliance, including more restaurants.
A Lack of Communication
The area of the Alliance stretches 37 blocks. Keyfood supermarket owner Widdi said that the long stretch makes it harder to maintain security and a clean environment. “How would a security contractor cover all those blocks?” he said.
The Fulton Business Alliance does not spend for additional security, unlike some other City Districts, according to the Small Business Services departments’ BID annual report. But the District secured outside funding from grants to install streetlights and cameras in multiple locations. Kellogg, the executive director, underlines that the Alliance obtained external funding last year that adds up to 40 percent of the operating budget.
The Alliance hired four sanitation workers for street cleanup in 2015. Those workers covered all 205 storefronts. Widdi, however, claims that he sees fewer New York City sanitation vehicles to clean the streets in the District than in areas outside the District boundary. However, the City’s Sanitation Department contradicts this argument. Belinda Mager, a spokesperson of the Department said in an email interview, “Establishment of a BID does not result in reduction of mechanical broom service, litter basket collection, service, etc.” The Department emphasized that the Alliance’s cleaning service is supplemental, and that property owners should still be monitoring and cleaning the sidewalk and the area 18 inches into the street.
Kellogg said that the District will continue to pursue a variety of strategies for security, through engagement with law-enforcement agencies and the community. As for supplemental sanitation services, the District added extra workers and hours during this summer, he said, to cover high-traffic areas during the evening.
Thomson, the Golden Krust Bakery owner, sees a communication problem. He says that the District should communicate with business owners about its services, and explain the updated assessment fees. He says outreach from the Alliance is rare. “There’s no communication. Occasionally some had visited my store asking for donations for holiday events. That was it.”
As required, the Alliance has held two information sessions since 2015 to provide opportunities for community input on proposed changes, including the expansion and the new assessment formula. Kellogg said there was just one participant in one of those sessions, other than dozens of board members.
“Can we do more? Yes, that’s part of the plan,” said Kellogg, emphasizing that he will push more door-to-door outreach.