I. Introduction

From the canyons of Wall Street to the shopping strips of Brooklyn, Queens, and the Bronx, New York City's business community is increasingly relying on Business Improvement Districts (BIDs) to enhance the City's economic climate. During Fiscal Year (FY) 1995, property owners and merchants in New York City's 33 BIDs paid assessments on more than 6,000 properties for the provision of supplemental services such as sanitation, security, social services, and marketing. In FY `96, the Sunset Park BID formally began operation. Additionally, 39 other groups throughout the five boroughs have expressed some degree of interest in forming their own BIDs.

Although they are not-for-profit organizations, the establishment of BIDs must be formally approved by elected officials, and thereafter, BIDs rely on many municipal agencies to perform their mission. The New York City Council legislates the creation of every BID, all BIDs execute a contract with the New York City Department of Business Services (DBS), the City agency which supervises and oversees all BIDs, and the New York City Department of Finance (DOF) collects and distributes BID assessments. At a time when their role in New York City public life has never been greater, questions have been raised regarding the accountability and operating practices of BIDs. Among them, how are BID resources being allocated and do BIDs require greater oversight by government?

In light of the significant role of New York City government in BID operations, the serious questions which have been raised regarding BIDs, and the potential explosion in the number of BIDs throughout the City, in the Spring of 1995 Herbert Berman, Chairman of the City Council's Finance Committee, directed Council staff to conduct a thorough review of BID operations.(1) Specifically, Chairman Berman asked that the BID review include:


  1. All BIDs sign contracts with DBS, and under 29 of the New York City Charter, the Council has the authority to investigate,"any matters within its jurisdiction relating to the property, affairs, or government of the City..." See also 30 of the New York City Charter, authorizing the Council to review City procurement policies and procedures. Additionally, the Council is vested with final approval power of all BIDs and in most cases the City Council Members who represent BID districts appoint an individual to serve on the BID board of directors. NYC Admin. Code 25-407; 25-414(b).