Business Improvement District threatens U-District

by John Fox and Carolee Colter, Seattle Displacement Coalition – February 26, 2015

U of W & big property property owners push for $4 million BIA to fund promotion of the UDistrict as next high density hi-tech ‘hub’ – and expect several hundred small property owners, small businesses, (including many minority-owned shops), and low income tenants to foot much of the bill – to effectively subsidize their own displacement.

Business Improvement Areas (BIAs) can be useful tools for neighborhood business districts in need of an infusion of dollars to pay for important public services that government may not be able to adequately provide. 

Authorized under state law, BIAs allow small businesses and property owners to tax themselves a little extra to improve their community — for street cleaning, a marketing campaign to attract more shoppers, hiring someone to coordinate neighborhood events, public toilets or added security. 

After agreeing on priorities and costs, area businesses draw boundaries around their shopping district, usually a block or two on each side of a major business strip, and ask the City Council to approve creation of the BIA. The city then authorizes an additional increment of property tax to run indefinitely or a set number of years, spread across all commercial properties within these boundaries, including condos but not single-family homes. Everyone pays, and everyone is happy. 

That’s how it’s supposed to work, but the tool can be abused. A few large property owners can gerrymander the boundaries of the BIA, then only vaguely define upfront how the BIA dollars will be spent and monopolize spots on the decision-making board, controlling where the money really will go. Then small businesses and apartment residents find themselves getting taxed for things that don’t serve them at all.

This is precisely what’s happening now in the University District — only here, one large property owner, the University of Washington, is dominating the process. 

The ‘partnership’

With the support of just enough private property owners and city planners in the Office of Economic Development (OED), the university has proposed a BIA that spans the entire community from the freeway on the west to the campus on the east, Ravenna on the north, to Union Bay on the south. Most of the properties to be taxed, including a large number of condominium owners, are blocks away from the Ave (University Way Northeast) and the business district itself.

In fact, city documents indicate that many property owners within the BIA were not even consulted before the petition for the BIA was submitted to the City Council, where it’s now being reviewed. Under BIA rules, a petition can come from representatives of half of the taxable value — not half of all property owners. 

The UW owns more than 45 percent of the taxable value within the BIA and, by arm-twisting a handful of others, easily reached 65 percent. But most property owners, especially in the northwest section of the proposed BIA, to this day don’t know what they’re in for.

The new BIA will raise an estimated $4 million over five years, but UW’s assessment is capped at $350,000 annually. That’s more than eight times what the current BIA in effect for the U-District raises, now primarily used for cleaning services along the Ave.

While cleaning services will continue, most of the money would serve the newly created University District Partnership for planning, advocacy, marketing and other activities serving their vision for the area. That vision is best described in a July 2013 study from UW and OED, entitled “Seattle-UW Incubator Study.” It envisions “marketing” the U-District as “the next logical place for a coordinated effort to stimulate economic activity based on high-tech and life-science startups.” 

But “the true potential for the U-District lies in attracting significant commercial development and investment, drawing on national and international partners to elevate its status as a world leader in technology.”

The BIA and proposed upzone to 340-foot towers also being pushed by this “partnership” are the means to this end. Scant attention is paid to social services, low-income housing, open space, historic preservation and retention of the U-District’s existing rich, diverse, multi-ethnic small businesses and residential community. These things appear only as obstacles to the remaking of the U-District into a high-rise, high-tech “incubator” serving the global economy. 

Conceivably, these things could co-exist at more modest densities, with measures first put in place to preserve the existing character and affordability of the U-District and to ensure developers and UW pay their way.

But from the closed-door approach of the big players, it seems to think the area is tabula rasa for pursuing its “bold, new vision” and making sure the rest of us pay for it. 

Fighting back

A growing group of residents, community councils and small businesses have come together to demand changes to the BIA: scaling its boundaries down, adding resident and small-business representation on its governing board, while reducing UW’s role. 

Meanwhile, others are challenging the high-rise zoning planned for the U-District, calling for open space, developer impact fees, preservation of low-income housing and historic buildings, traffic mitigation and more measures to ensure small businesses and low-income tenants are not driven out before any upzone or BIA is created. 

UW’s power grab can still be stopped. 

JOHN V. FOX and CAROLEE COLTER are coordinators for the Seattle Displacement Coalition (www.zipcon.net), a low-income housing organization.

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