Bid Dissolution

Although DBS requires BIDs to engage in a thorough outreach process which results in a "general consensus" of support to create the bid, there is no threshold amount of property owners who must consent to the establishment of the BID. Once established, all property owners within a BID are compelled, regardless of their opinion of the BID's value, to support it through the payment of mandatory property assessments. The BIDs and DBS make only a minimal effort, at best, to monitor the desire of property owners to continue supporting BIDs. To date, DBS has renewed every expired BID contract.

DBS informed Council staff that it has recently requested sponsoring parties to produce signed statements of support from property owners in the proposed BID during the outreach process. The Committee approves of this increased outreach effort and feels that all future BIDs should be required to provide written statements of support which clearly indicate that the affected property owners and merchants understand the assessment, services, and boundaries of the district, and support the creation of the BID.

Although some BID managers stated that the outreach process was already overly burdensome, this increased outreach effort is especially critical, given the difficulty in dissolving a BID after it has been established. Assuming there is no outstanding debt, a BID can only be dissolved "by local law of the City Council upon its motion or upon the written petition of 1) the owners of at least 51% or more of the total assessed valuation of all benefited real property...and 2) at least 51% of the owners of the benefited real property...."(32) These requirements place an extremely difficult burden on the disaffected property owners by pitting them against the resources of the BID and requiring them to engage in time consuming and potentially expensive petition collection drives. Additionally, the ability of BIDs to incur large amounts of indebtedness -- through either bond sales in the cases of the Grand Central and 34th Street BIDs, or the accumulation of accounts payable as in the case of the East Brooklyn BID -- would prevent BID dissolution regardless of member dissatisfaction. As a result, property owners, whether they are satisfied or not, remain legally required to continue paying their mandatory assessments. Failure to pay these assessments can result in penalties and ultimately in rem foreclosure proceedings.(33)

Before any BID becomes operational, the BID executes a contract with DBS, generally for a term of five years, which provides that DBS may, at its sole discretion, renew the contract.(34) However, as previously stated, DBS has regularly renewed all expired BID contracts. According to DBS, in the months preceding a contract's expiration, the BID itself is notified that the contract is ending, and several steps are taken to renew the contract. These steps include a public hearing by the Mayor's Office of Contracts (MOC), the date of which is made public by a formal notification in the "City Record". Often, DBS officials stated, BIDs use this period to refine and renegotiate specific terms within the contract.

However, DBS makes little effort during this contract renewal period to determine if there is continued support for the BID. Moreover, despite the fact that DBS is required to conduct oversight of BIDs, beyond its attendance at BID board meetings and regular contact with the BID itself, it makes little effort to regularly solicit feedback from the larger BID population. As a result, contract renewal is based on perfunctory hearings and submissions, which do not adequately measure property owner satisfaction.

This process may result in the perpetuation of an entity which fails to account for changes in the sentiments of original property owners, or the sentiments of property owners new to the BID since its establishment. City-wide property transfer statistics of the Class 4 properties most likely to exist within BIDs reflect that a substantial number (at least 10% each year from FY `91 to the close of FY `95) changed hands in New York City. This five year period represents the same duration as a BID contract.(35) While City-wide statistics are not BID specific, these findings suggest that a substantial number of BID property owners at the time of renewal never had input in the original decision to create the BID.

The problems evident in this "self-perpetuating" process may explain some of the results of the Committee's outreach survey which found that only 45% of the respondents surveyed thought the BID assessment was a good investment. Similarly, 23% said they had complaints about the BID, and 37% were dissatisfied or did not know if they were satisfied with the BID.(36)



Although BID managers were unanimous in claiming that they engaged in ongoing outreach efforts, the Committee's outreach survey found that many respondents were not knowledgeable about basic BID operations. Incredibly, 31% of all respondents surveyed were unable to state their BID's name. The inconsistencies between what the BID managers reported, and what the Council's outreach survey revealed, is disturbing.

In the survey, all BID managers stated that they engaged in various forms of public outreach which included walking throughout the BID and talking to property owners and merchants. In addition, 90% stated that they published a newsletter. While all the BIDs compiled an annual report, only 39% actually mailed the report to local property owners.(37) The remaining 61% stated that copies of the annual report were available at the annual meeting and that any BID property owner could request a copy.

Despite these apparent efforts at outreach, the Committee's survey found that many respondents were poorly informed about their BID. Specifically, of those who responded to the questions:

These figures become even more disturbing when comparing the answers of those respondents who stated that they were BID board members to those who stated that they were non-board members. In total, 15% of all respondents identified themselves as BID board members. While only 5% of such board members stated they were unfamiliar with their BID's operations, 39% of non-board members claimed that they were unfamiliar with their BID's operations. Similarly, while only 3% of the board members stated that they either did not receive mailings or did nor know if they received mailings, as many as 44% of non-board members stated that they either did not receive or did not know if they received BID mailings.

These findings raise serious questions about the degree and effectiveness of BID outreach activities. Because the BIDs' outreach efforts are heavily dependent on mailings, one explanation for the respondents' lack of knowledge may lie in the incompleteness and inaccuracy of BID and DOF mailing lists. Several BID managers informed Council staff that the DOF lists of property owners were, in some instances, inaccurate. This appraisal was confirmed by Council staff who administered the outreach survey.(38) However, many respondents may not have known certain details about the BID simply because such details are not included in outreach materials. For example, information about a BID manager's salary is generally contained in the BID's annual report, which only 39% of the BIDs actually mailed to property owners.

The release date of the annual report, which is produced by the BIDs in May (before the end of the City's fiscal year), may also be problematic. While this document is supposed to reflect the BID's activity for a full fiscal year, its release date prohibits this type of complete analysis. Regardless of the explanation, property owners who are required to financially support the BID through their assessments, should be provided with sufficient information to at least have a basic knowledge regarding their investment.


Complaint Resolution Process

Almost all of the BIDs have failed to implement a formal, written complaint resolution process. Instead, 85% of the district managers stated that complaints made against the BIDs were resolved informally, often without any written documentation of the complaints or their resolution. Consequently, there is no way to know how many complaints have been made against most BIDs.

While 58% of the BID managers reported to Council staff that complaints were made against the BIDs during FY '95, only 33% reported that the board of directors received written copies of some of the complaints. In only 9% of the BIDs, were the board of directors provided with written copies of all the complaints made against the BID. Many BID managers explained that a summary of some complaints were verbally presented at board meetings.

Accurately tracking and monitoring complaints can serve as an important early warning system for potentially larger institutional problems. An example of this is the GCSSC's failure to take corrective measures in response to complaints made against its homeless program in the early 1990s. The GCSSC is a not-for-profit corporation which provided a variety of homeless services -- including the operation of a Multi-Service drop-in center -- to the Grand Central, 34th Street and Bryant Park BIDs with which it shared its senior management staff. In 1995, GCSSC was accused of operating "goon squads" which assaulted homeless individuals. As a result, it lost a $547,300 grant from HUD, which determined that there were, in fact, incidents of physical harassment and/or assaults of homeless individuals by GCSSC staff.(39)

The Finance Committee's own review discovered two incidents that were never publicized. As early as 1990 and 1992, two separate incidents occurred in which workers associated with the GCSSC Multi-Service drop-in center were alleged to have used improper force against homeless individuals. Both cases resulted in $5 million lawsuits against the GCSSC.

In the first case, a GCSSC client was allegedly assaulted and thrown through a glass window by a GCSSC worker.(40) The second case, which has yet to go to trial, involved a GCSSC client who was badly burned after a GCSSC kitchen worker allegedly poured boiling water on him.(41) While the facts in neither of these cases suggested that these actions were sanctioned by the GCSSC, they do suggest that managerial deficiencies existed within the center and that center operations should have been reviewed in the early 1990s.(42)

These lawsuits were not the only complaints made against the GCSSC. Bank officials who contracted for homeless services with the GCSSC had also made complaints regarding the supervision of outreach workers.

Instances were reported by at least one bank of [GC]SSC outreach workers themselves sleeping in ATM vestibules during shifts. Other reports from banks and social service providers ... indicated that there were times when [GC]SSC outreach workers would take cup in hand and beg for money from ATM customers while dressed in Partnership outreach gear.... One bank reported times that [GC]SSC outreach workers "fell off the wagon" and began drinking alcoholic beverages while on duty at ATM booths.(43)

These incidents, particularly the alleged assaults, should have motivated the GCSSC to address the serious managerial deficiencies that existed within the corporation. However, during an interview with Council staff, the president of the Bryant Park, 34th Street and Grand Central BIDs who also served as the Chairman of the GCSSC stated that until recently there were no formal complaint logs detailing complaints against the BIDs or its service providers. Additionally, he stated that the board of directors did not receive copies of complaints filed against the BID or BID workers, nor did they receive written explanations of their resolution. While it is highly unlikely that the Grand Central BID's board of directors was not aware of these lawsuits, it is disturbing that a formal complaint process did not exist which would have alerted board members to the mismanagement that caused these incidents.

Another example of a poor complaint resolution process is demonstrated by the Fifth Avenue BID. During Council staff's interview with the BID's manager, staff was informed that there were no serious complaints levied against the BID during FY '95. A check of court records, however, revealed that in December, 1994 a $2 million lawsuit was filed against the BID. According to the complaint, the plaintiff was assaulted by BID staff, and allegedly sustained injuries after employees of the Fifth Avenue BID negligently, carelessly and recklessly struck, pushed, and/or otherwise came in contact with him.(44) Although a court will determine the facts of this case, by any reasonable definition a multi-million dollar lawsuit alleging physical abuse by BID workers is a complaint and should have been logged and reported as such. The BID manager's blatant failure to acknowledge this incident further demonstrates the need for a formal complaint resolution process.

Clearly, there exists an enormous potential that BIDs facing lawsuits will be liable for any monies owed to the plaintiff in the resolution of such cases. Inevitably, the property owners of a BID would in some manner bear the cost of such negligence.


Affiliation Conflicts

During the course of its review, Council staff determined that several BIDs shared staff and office space with organizations which they contracted with for the provision of services. Similarly, many BIDs had board members who served on the boards of organizations which had contracts with the BIDs. At the same time, several BID managers were also employed by other organizations which either shared office space with the BID or were contracted to provide services to the BID. These arrangements are not improper on their face, nor do they violate the contracts executed between DBS and the BIDs. In fact, DBS encourages established organizations like LDCs to initiate the creation of BIDs. However, these organizations serve larger areas than the BID district and/or have broader missions than the BID. The common affiliations between BIDs and these other organizations raise concerns regarding potential conflicts of interest, the improper utilization of BID funds and, in the case of BID managers, the actual time being spent working for the BID. It is critical that BIDs, with their dedicated revenue streams, do not become cash cows for other organizations, and that managerial responsibilities and loyalties be clearly defined and disclosed to the BID board of directors.

Under the New York Not-For-Profit Corporation Law, it is not illegal for a not-for-profit corporation to enter into contracts or engage in other transactions with an organization that shares common board members. Notwithstanding, board members with dual affiliations are required to disclose such affiliations, and their vote can not be the deciding vote to authorize a contract with an organization with which they have an affiliation.(45) Moreover, board members must "discharge the duties of their respective positions in good faith."(46) This fiduciary duty requires that board members take actions only because they believe it is in the organization's best interest.

Despite the fact that an individual can serve on more than one board, it is improbable that such an individual could exhibit an undivided loyalty to each organization he/she represents, especially if the specific goals of each organization differ. For example, an organization letting a contract generally seeks to receive the most service for the least cost, while a contract provider generally seeks to provide the least service for the maximum revenue. The potential conflict is evident. While common board members can recuse themselves from taking part in certain transactions in order to avoid any appearance of impropriety, recusals diminish their ability to function as an effective board member.


The consequences which can result from the existence of common board member affiliations are clearly illustrated by the case of the Jamaica Chamber of Commerce (the "Chamber") which until 1994 was contracted to manage and provide services for the Jamaica Center Mall SAD (the "Jamaica Mall) and continues to provide management service for the 165th Street SAD. During this relationship, the Jamaica Mall's district manager was also the President of the Chamber, and several Jamaica Mall board members also sat on the Chamber's board of directors.(47)

This relationship formally ended in 1994 after a court-supervised election installed a new board of directors at the Jamaica Mall, which discharged the Chamber from its managerial duties.(48) Subsequently, property owners representing the Jamaica Mall sued the Chamber for $1 million alleging that the Chamber conspired to, and in fact, defrauded the Jamaica Mall, misappropriated funds, and willfully and maliciously violated its fiduciary responsibilities to the Jamaica Mall.(49) Specifically, the Jamaica Mall alleged that:

The Chamber countersued the Jamaica Mall for $10 million for allegedly engaging in a frivolous law suit and allegedly trying to "destroy, ruin and ultimately put the Jamaica Chamber of Commerce out of business."(51) Additionally, the Chamber alleged that the Jamaica Mall owed several hundred thousand dollars for services rendered under the terms of its contract.(52)

While these allegations have yet to be adjudicated by the Court, it is clear that as early as 1991 DBS shared many of the concerns raised by the Jamaica Mall in its litigation. A May 1991 letter from DBS to a Jamaica Mall property owner states: "[w]e share your concern about the procedures and operations of the [Jamaica Mall] Association including the make up of the board of directors. Your concerns are well founded...."(Emphasis added.)(53)

DBS' subsequent efforts to address the situation by encouraging the Chamber to provide better documentation of service delivery, trying to increase the number of property owners on the board of directors and decreasing Chamber representatives, conducting merchants satisfaction surveys, holding formal mediation meetings, and making operational recommendations for improvement of the SAD were insufficient.(54) In April 1994, the Chamber was still operating the Jamaica Mall and some Chamber board members continued to serve on the Jamaica Mall board of directors. At that time, DBS concluded in a letter written to the Jamaica Mall's board of directors that:

If DBS had exercised its broad oversight authority, it is possible that the lawsuit highlighted above might not have been filed. DBS' contract with the Jamaica Mall provided, in pertinent part, that:

The Commissioner of OBD [DBS] shall have the right to determine the amount, quality, acceptability, and fitness of the work being performed by the Association [Jamaica Mall] under this Contract, and shall have the right to withhold any assessments if s/he reasonably determines that the provisions of this Contract have not been complied with.
* * *

The Commissioner of OBD [DBS] and the Comptroller shall have the right, at all reasonable times to audit, inspect, and copy any of the books, records, accounts, and other documents of the Association in connection with this contract.(56)

DBS had various options available to resolve this conflict. It could have referred the case to the New York City Department of Investigation (DOI), conducted its own audit, or withheld assessments from the Jamaica Mall pursuant to DBS' contract with the Jamaica Mall. Nevertheless, DBS took no effective action. In fact, it took the actions of an insurgent group of BID property owners and the holding of a court supervised election before the Chamber was relieved of its responsibilities.(57) DBS' failure to adequately address this egregious set of circumstances, raises serious questions about its ability to provide oversight in situations where the possible conflicts may be less obvious.

Similarly, DBS' ineffective action over a three to four year time period had a very deleterious effect on the property owners of the Jamaica Mall. If DBS' conclusions concerning the Chamber's management were valid, the quality of services the Chamber provided to the Jamaica Mall were certainly suspect. Moreover, DBS' failure to act decisively early on may have contributed to the Jamaica Mall's decision to initiate legal proceedings against the Chamber to recover assessments it alleges were improperly spent. Since the legal proceedings began, the Jamaica Mall has spent almost $80,000 in legal fees -- $80,000 of assessments that should have paid for direct services to the BID's property owners.(58)

While a review of court records failed to reveal any similar lawsuits filed against other BIDs, the Committee's research revealed that three BIDs -- Graham Avenue, 165th Street and Jamaica Mall - made improper and/or illegal grants or loans to organizations with common affiliations. In the case of Graham Avenue, the BID manager was also the director of the Graham Avenue Merchants Association, an organization which shared space with the BID. The president of the BID board of directors also served on the Graham Avenue Merchants Associations's board of directors. The June 1994 audit of the Graham Avenue BID revealed a $4,700 loan to the Graham Avenue Merchants Association.(59)

In the case of the 165th Street and Jamaica Mall SADs, until 1994, they shared common board members with the Jamaica Chamber of Commerce and with the Jamaica Economic Growth Corporation.(60) The SADs' district manager was also the president of the Jamaica Chamber of Commerce. According to financial statements provided by both SADs, grants and loans were made by the SADs to the Jamaica Economic Growth Corporation for the latter's purchase of sanitation trucks and equipment, which were to be used on behalf of the SADs.(61) In 1993, the Jamaica Mall made a grant of $17,716 and the 165th Street Mall made a loan of $1,898 to the Economic Growth Corporation.(62)

It is clearly not part of a BID's mandate or mission to make loans or grants to other entities. Moreover, the loans made by the Graham Avenue BID and the 165th Street Mall violated New York State's Not-For-Profit Corporation Law, which prohibits not-for-profit corporations from making loans to other organizations that share common board members or officers, except in one limited circumstance.(63) Under the law, only Type B corporations, those organizations formed for charitable, educational, and religious purposes etc., are permitted to make such loans. Additionally, these loans can only be made to Type B corporations.(64) The Committee's research revealed, however, that the 165th Street Mall and the Graham Avenue BID are not Type B corporations, and as a result, are not permitted to make such loans. This matter should be further investigated by DBS to determine what further action may be appropriate.

There were numerous BIDs which had potential conflicts of interest. In the Steinway Street, Myrtle Avenue, Church Avenue, Woodhaven, Grand Street, and East Brooklyn BIDs, many services were provided by LDCs. In all of these cases, at a minimum, the BID manager was also a member of the LDC board of directors.(65) Similarly, in four cases -- Steinway, Myrtle, Woodhaven and East Brooklyn -- the BID manager was also an employee with responsibilities to the LDC, and in at least two of the cases -- Woodhaven and Steinway -- the BID manager was also on the LDC board of directors. In the Columbus/Amsterdam, Church Avenue, and Grand Street BIDs, the BID manager worked solely for the BID, but was hired by, and reported to, personnel in the LDC which contractually provided all services to the BID.

Another related finding revealed by the Committee's research is that in at least 42% of the BIDs, district managers received compensation from, and/or had responsibilities to other organizations. In addition to the previously discussed examples, the BID manager of the 14th Street/Union Square BID had multiple responsibilities to both the BID and the 14th Street/Union Square LDC. In the 165th Street BID, the district manager was also the president of the Jamaica Chamber of Commerce, which had a contract to manage the BID. The president of the Downtown Alliance was also the president and sole employee of the Downtown Lower Manhattan Association (DLMA), a local merchants organization which created the BID. In this case, the president of the BID board of directors was also on the board of directors of the DLMA. The Fifth Avenue BID's president was also the president, and a member of the board of directors, of the Fifth Avenue Association, also a local merchant's organization which created the BID. The district manager of the Washington Heights BID was also the executive vice-president of the Inwood Heights Preservation Corporation which shared space with the BID. The HUB/Third Avenue BID Manager was also employed by the South Bronx Overall Economic Development Corporation, which was contracted to manage the BID. Finally, the 34th Street, Grand Central and Bryant Park BIDs all shared the same president and senior management staff.(66)

While there is nothing inherently improper about these relationships, BID boards of directors must be made aware of any additional employment, including the BID manager's salary and responsibilities. It is imperative that this information be disclosed to BID boards of directors so that they can be made aware of any potential conflicts of interest. It will also allow board members to know how much time a BID manager actually spends working for the BID.


Performance Measurement

The Committee found that 51% of the BID managers reported that their BID boards of directors have not made ongoing performance assessment a goal. Additionally, 66% of the BID managers stated they could improve their performance assessment activities, and 39% said they could expand their scope of performance assessment. The Committee's review determined that many BIDs have failed to establish and utilize adequate performance indicators in order to accurately measure their own performance. Failure to use adequate performance indicators makes it difficult to accurately measure a BID's success in fulfilling its mandate.

The failure to utilize adequate performance indicators is clearly evident in the area of sanitation, where many BIDs relied on non-quantifiable measurements to rate their performance. In the area of general sanitation, 30% of the BIDs only utilized informal, visual inspections to measure performance. More specifically, 48% used similar methods to track sidewalk cleanliness. In addition, some of the BIDs which utilized quantifiable measures failed to use measures which solely captured BID performance. For example, 51% said they utilized the Mayor's Office of Operations "Scorecard" system to measure overall sanitation conditions. Technically, these indicators analyzed how well the City provided services within BID boundaries, but did not provide a distinct measurement of BID performance. Therefore, while it is clear that in many BIDs sanitation conditions have improved, it is difficult to assess how much is attributable to the BIDs themselves, rather than to the efforts of City agencies.

The lack of adequate performance measurements is also evident in the area of economic development, one of the BIDs' fundamental goals. Although 88% of the BID managers said they monitored the number of store front vacancies within their districts, and 76% of the BID managers said that they improved business development, 33% could not tell Council staff how many store front vacancies had actually been filled in FY '95 and 57% said they did not monitor the number of jobs that were created by new businesses.

Some BIDs clearly take performance measurement more seriously than others. The Fifth Avenue and Downtown Alliance BIDs, for example, compiled weekly reports that chronicled BID street activities in specific areas. In the case of Fifth Avenue, these reports were then forwarded to the board of directors. According to its annual report, the Fashion Center BID collected 500 tons of litter in 40,000 Fashion Center logo bags since its sanitation program began. And, in FY' 95 its maintenance crew painted 116 light poles, 87 fire hydrants, 92 storage boxes, 19 mail boxes, 74 traffic signals, 19 traffic boxes, 10 fire boxes, 15 newsstands, and 200 litter baskets.

Smaller BIDs also employed innovative performance measuring systems. Perhaps the most significant form of security performance measurement was utilized by the Pitkin Avenue BID in Brooklyn. The BID's budget of $113,903 made it one of the smallest BIDs in the City, however, it intricately tracked crime rates throughout its district. Monthly statistics were compiled which reported both the crime incidents on a block by block basis and the times at which such incidents occurred. Additionally, the Pitkin Avenue BID monitored the number of New York City Police Department officers who patrolled the BID on a tour-by-tour basis. Finally, all of the radio calls and physical visits made by BID security personnel to merchants were tracked. This extensive review allowed the BID to effectively monitor both its own security personnel as well as the level of service it received from the City. Since the BID was established in 1993, crime incidents decreased by 28%.(67)

The fact that the Pitkin Avenue BID was capable of this level of program monitoring with relatively limited financial resources, suggests that other BIDs could have been doing more to quantifiably measure performance. Strengthening performance measurement is not simply an academic exercise. Done properly, performance measurement will assist the BIDs in understanding how well their services are being implemented, alert them when changes are needed, and assist them in their efforts to receive more targeted services from City agencies. The failure of many BIDs to establish and implement adequate performance measurements may be partially attributable to DBS' own failure to conduct performance evaluations of the BIDs. The contracts executed between DBS and the BIDs, which were reviewed by the Committee, require that DBS evaluate the performance of the BIDs following the contract's expiration.(68) Although at least 20 contracts executed between DBS and various BIDs have expired, DBS has not conducted any of the required performance evaluations.

DBS staff explained this failure by stating that its ongoing contact with the BIDs, including attendance at BID meetings and review of the BIDs' annual reports and audits, provided sufficient information concerning a BID's performance. While such ongoing contact is important, it is clearly less comprehensive than a formal performance evaluation, which would measure a BID's performance in such areas as: outreach to property owners; complaint resolution; fiscal management; procurement practices and service delivery. Moreover, DBS staff maintain their ongoing contact with the BIDs by serving as the Mayor's representatives on the BIDs' boards of directors. Clearly, the individuals who serve on the BID's board of directors should not be the same individuals who conduct a performance evaluation. Because of their position on the board, their opinions regarding the BID could lack objectivity. DBS' reliance on such board members' "evaluation" instead of an objective performance evaluation by staff not associated with the BID is inherently problematic.

Finally, the contract provision itself, which requires performance evaluations after the expiration of a contract, is flawed. In light of DBS' contract renewal process, which commences approximately six months prior to a contract's expiration, even if DBS did conduct performance evaluations there would be little value in conducting these evaluations after the contract expires.


Fiscal Management

Thirty-nine percent (39%) of the BID managers said there was a delay in receiving their BID assessments from DOF. The Committee's survey of BID managers revealed that, in some cases, there was a six to eight week lag between assessment collections and assessment distribution at the start of every fiscal year. The City's weakened economy has also slowed the rate of payment by property owners.(69) Yet, despite recommendations from DBS to budget on a 14 month cycle, or maintain reserve funds to prevent the interruption of services, some BIDs obtained bridge loans. As a result, a portion of their assessments were being spent to pay for interest on these loans, rather than for services.

DBS recommends that BIDs place 10% of their first year financial resources in a reserve fund to cover any budget shortfalls that may result from the delinquent payment of the assessment.(70) This recommendation was supported by the New York City Partnership in its manual for managing and establishing BIDs.(71) A review of budget documents supplied by the BIDs revealed, however, that 51% had no such reserve fund. The existing reserve funds for 16 BIDs averaged just 7% of their total budgets -- not enough to carry a BID through a two month dry spell. Furthermore, DBS representatives suggested that some of the BIDs that did maintain reserve funds might not have fully understood how to utilize these funds to cover assessment collection shortfalls. The only BID that budgeted on a 14th month cycle is the Fashion Center.


Instead of following DBS' recommendations, some BIDs chose to obtain bridge loans in order to continue service delivery. The most egregious example of poor fiscal management, including the use of bridge loans, is illustrated by the East Brooklyn BID, whose FY '94 audit concluded that its financial condition was so perilous that it might have to cease operation. The audit concluded that, "[t]he company may be unable to meet current obligations to creditors. This condition raises substantial doubt about its ability to continue as a going concern."(72)

In its FY '95 annual report, the East Brooklyn BID, whose annual assessment was only $310,000, reported that it was owed approximately $250,000 in unpaid assessments.(73) The BID's manager stated to Council staff that the BID experienced considerable cash flow problems, and it owed its security company approximately $140,000 for services rendered. A review of the FY '94 audit of the East Brooklyn BID showed that the BID also owed the East Brooklyn Local Development Corporation an additional $60,000. In an effort to mitigate these dire financial conditions, the BID has requested a $39,500 increase in its FY '96 assessment to pay for, among other things, its administrative costs and to repay a loan, the proceeds of which were used to pay past debt.(74)

Given that non-payment of assessments was an ongoing concern, it is outrageous that the East Brooklyn BID and DBS did not take earlier measures to prevent the BID from reaching a condition where its fiscal solvency was threatened. At the very least, once it realized that assessment collections lagged, DBS should have mandated that the BID decrease its service costs. This scenario also demonstrates the danger of incurring significant debt. If members are unable or unwilling to make their assessment payments, a BID should be dissolved. However, pursuant to the City's BID legislation, the existence of debt prohibits such an action. BID property owners get trapped in a Catch-22 situation where their assessment rate is increased to sustain a BID which is in fiscal difficulty precisely because these same property owners did not pay their assessments.

Even though DBS failed to take appropriate action in response to the East Brooklyn BID's audits, these contractually required audits can nevertheless serve as an important oversight tool.(75) However, the Committee's review of FY '94 financial statements submitted by the BIDs revealed that four BIDs -- Brighton Beach, Washington Heights, Church Avenue and North Flatbush Avenue -- submitted only annual reviews of their financial statements, rather than full audits.(76) Similarly, in 1994 DBS determined that no such audit had been prepared for the Jamaica Mall SAD, and in 1993 the 165th Street Mall submitted unaudited statements to DBS.(77) The difference between an audit and a review is substantial and not simply a technical distinction. Audits provide the highest level of assurance that financial statements are free of fraud and material error by examining the underlying information supporting an organization's financial statement and verifying information through third party confirmation. Audits also study and evaluate the organization's system of internal controls. Reviews, on the other hand, only provide limited assurances regarding the accuracy of the infomation an organization represents in its financial statements through inquiries of the organization's management and limited analytical testing of the financial statements.(78)

DBS' failure to require audited financial statements for all BIDs has enabled some BIDs to institute sloppy and inadequate financial practices and hinders its own ability to provide effective oversight of BID financial and budgeting practices. It is worth noting that DBS recently asked all BIDs to form audit committees of their boards of directors to review all BID fiscal policies.



The Committee's analysis of financial data supplied by the BIDs indicates that the smaller BIDs (budgets of less than $500,000) budgeted 52% of their operating budgets for contracts which provided supplemental services.(79) In contrast, the larger BIDs (budgets of more than $1 million) budgeted five percent (5%) of their operating budgets for contracted services, electing to provide certain services "in-house."(80) In total, BIDs budgeted 12% of their total operating budgets, or approximately $5 million, for the provision of services by contractors.

In light of the amounts budgeted for contracting, it is important that BIDs, and the procedures they utilize when soliciting, awarding, and monitoring contracts, be held to high standards. These standards should ensure the integrity of the contracting process by providing for the fair treatment of all vendors, by assuring public accessibility to all records, and by stimulating competition so that BIDs receive the most value for their contract dollars. However, these standards should not be so high that the BIDs' contracting procedures become overly restrictive.

According to DBS, the only general contracting procedures BIDs were uniformly required to follow were: (i) the utilization of a competitive bidding process that awards the contract to the lowest, responsible bidder; (ii) board of director or authorized committee approval of all contracts greater than $10,000; (iii) ensuring women and minority contractors maximum opportunity to participate in the bidding process; and (iv) requiring all proposed contractors for contracts greater than $100,000 to submit to DBS the necessary information for a full VENDEX investigation.(81)

These broad and uniformly imposed requirements lacked the comprehensiveness required to ensure and maintain the integrity of the contracting process. However, given the variations in BID sizes and the amounts they budgeted for their contracts, the uniform imposition of more detailed contracting procedures might be overly restrictive to some BIDs. Accordingly, rather than uniformly imposing more detailed procedures, DBS suggested that each BID develop and implement its own set of internal contracting procedures. DBS did not, however, require that these procedures be formalized in writing.(82) As a result, BIDs rarely created internal written contracting procedures. Only eight BIDs -- Alliance for Downtown New York, Grand Central Partnership, 34th Street Partnership, Bryant Park, Fashion Center, Fulton Mall, 14th Street, and the Nassau Mall -- were able to provide the Committee with copies of internal written contracting procedures.(83) Utlimately, written procedures ensure greater integrity in the contracting process, and allow for effective oversight and evaluation. Additionally, they provide continuity within a BID if changes in management or the board of directors occurs.

Although 66% of the BID managers interviewed told Council staff they lacked internal written contracting procedures, most BIDS were able to articulate the procedures they use. According to many BIDS, the most common form of contract solicitation was the competitive bid, whereby contractors were solicited from sources such as the telephone book, personal recommendations, and the "BID Manager's Directory." The "BID Manager's Directory" is a guide produced by the New York City Partnership containing a list of vendors for various services. Several BID managers interviewed by Council staff were under the impression that this was a DBS approved list. DBS staff reported, however, that this list was not considered an official list, and that they neither approved nor disapproved of its contents. Unfortunately, DBS' failure to communicate the genesis and unofficial nature of this list to the BIDs has resulted in some BIDs relying heavily on this list to select vendors. The limited number of vendors provided by this list has reportedly been a constant source of frustration to BID managers, and inevitably reduced competition for some contracts. In addition, none of the BID managers stated they had been provided access to the City's prequalified vendor's list.

Contract award procedures also varied among the BIDs. With respect to background checks, some BIDs stated that they called references, while others stated that they reviewed Dun and Bradstreet reports, contacted law enforcement agencies, and sought information from the Department of Consumer Affairs. However, in the absence of internal written contracting procedures, the only BID contractors subjected to standard VENDEX background checks were those soliciting contracts which, when aggregated for each BID, equalled or exceeded $100,000. Because most BID contracts were for amounts less than $100,000, it is improbable that effective background checks were conducted for all potential vendors.(84)

Although few BIDs had internal written contracting procedures for contract monitoring, BID manager interviews provided anecdotal information about the procedures actually used by some BIDs. For example, many of the smaller BIDs, such as Graham Avenue in Brooklyn, applied monitoring procedures which ranged from spot checks by staff walking throughout the district, to receiving oral feedback from merchants and property owners. Some of the larger BIDs, such as the Downtown Alliance, directly employed supervisors for its sanitation and security contracts. Written weekly reports were provided to the BID president. Other BIDs, such as the Jamaica Mall, actually examined the number of summonses issued by the Department of Sanitation (DOS) to BID merchants in order to measure the success of sanitation contractors.


However, the lack of internal written contracting procedures clearly diminishes the BIDs' ability to adequately monitor contracts. This was demonstrated to the Committee after it received information concerning an organization which executed service contracts with multiple BIDs. Although this organization was listed in the "BID Manager's Directory," it was alleged to Council staff that this organization hired undocumented immigrants to perform services in the BIDs and paid them lower wages than its documented workers.(85) Council staff tested the veracity of this allegation through interviews with 24 of the workers utilized by the BIDs. These interviews revealed the following:

The Committee is disturbed that a company which contracted with multiple BIDs appears to have hired undocumented immigrants. While this may have been difficult for the BIDs to detect, it points to the need for stronger contract monitoring.

Another example of a BID's failure to adequately monitor contracts was demonstrated by Church Avenue. This BID executed a contract with the Church Avenue Merchants Block Association (CAMBA) LDC to manage the BID and provide sanitation services. The contract explicitly required the BID's sanitation crew to sweep the sidewalks and the streets.(86) It was discovered during a walking tour of the BID, however, and confirmed by the BID's manager, that sanitation workers only swept the streets. If individual merchants wanted their sidewalks swept, according to the BID manager, they had to make an additional cash payment to the street sweepers. Because of the BID's failure to enforce the contract's provision requiring sidewalk sweeping, property owners and merchants were technically paying twice for services they were already entitled to receive. This additional fee paid by the property owners and the merchants can be characterized as an "unofficial" assessment increase.

An additional issue uncovered during the Committee's review was that in four BIDs -- Pitkin, Woodhaven, Church Avenue and Flatbush Avenue -- ongoing services were provided by contractors that did not execute written contracts with the BIDs.(87) Fundamentally, a written agreement enables the BID to explicitly set forth the terms of the services to be provided. Without such written agreement, a BID will lack the necessary documentation to legally enforce the terms agreed to by the service provider. Moreover, written agreements will allow the board of directors to review the terms of a proposed contract to determine if the contracted service will be provided at a fair price. A written agreement also enhances the ability of the board of directors to protect a BID's legal standing in the event a contractor does not provide a service or if an employee is hurt on the job. Additionally, contracts generally require that a contractor carry liability insurance or impose liquidated damages if services are not provided, thus allowing BIDs to limit their legal liability by assigning risks.

The failure of the current VENDEX background investigation system to offer "advices of caution" on the Barretti Carting Corporation, and the finding that multiple BIDs contracted with a company which allegedly employed undocumented immigrants, seriously concerns the Committee. It is clear that the existing contracting procedures utilized by the BIDs did not prevent these situations from occurring.


Administrative Costs

BIDs were created to deliver direct services to the property owners within their respective boundaries. Yet, 11 BIDs individually allocated more than 30% of their operating budgets on administrative costs, including rent, office supplies, insurance, utilities, and administrative staff salaries.(90) Despite these significant figures, the Committee's outreach survey revealed that 90% of the respondents did not know what percentage of their BID's budget was allocated to administrative costs. Since BIDs were created to provide direct services and are financially supported with compulsory assessments, it is essential that full disclosure be made to all property owners regarding indirect expenditures incurred by the BID. (See chart Dissemination of Information)

The highest administrative costs by percentage were incurred by those BIDs with the smallest budgets. Ultimately, the acceptable level of administrative costs must be determined on a BID-by-BID basis. However, since the impetus for the establishment of BIDs was to provide certain supplemental services, those BIDs which devote a significantly large percentage of their compulsory assessments to administrative costs, rather than providing direct services, appear to have deviated from their primary mission.

The Columbus/Amsterdam BID is a small BID with an annual budget of $168,000. Remarkably, it allocated 52% of its budget on administrative costs. This figure is extraordinarily high and raises serious questions regarding the BID's commitment to service delivery. The Valley Restoration Development Corporation has been contracted by the BID to provide management, promotional, and sanitation services. The two entities shared office space and equally incurred the rental expense. The BID allocated five percent (5%) of its budget ($8,750 per year or $729 per month) for the office space and allocated an additional eight percent (8%) of its budget (or $13,440) for "support services." These support services did not include the salary of the district manager, the secretary, or any supplies. When all of these expenses were totaled, the Council found that more than half of the BID's budget was devoted to the administration of the BID, rather than for the provision of direct services to BID property owners. It is unlikely that BID property owners would be supportive of this ratio if they were kept fully informed.

Clearly, the BIDs should fully disclose to all property owners how their assessments are spent. That 90% of all respondents in the outreach survey (a figure which includes some board members) did not know what percentage of their assessments was allocated to administrative costs suggests that the current practice of simply incorporating such figures into the annual budget, which is generally not provided to all BID property owners, is insufficient.



Although their responsibilities can be measured in terms of city blocks, three BID managers received a larger salary than New York City's Mayor, who is responsible for five boroughs. The Grand Central, 34th Street and Bryant Park BIDs collectively paid the same president a total of $315,000 per year. The Times Square BID paid its district manager $165,000 per year, and the district manager of the Alliance for Downtown New York received $150,000 in yearly compensation. In addition, the district manager of the Fifth Avenue BID was paid $100,000 per year.(91) (The salaries of all BID managers are illustrated in the chart BID District Manager Salaries.)

Three BIDs -- Woodhaven, East Brooklyn, and 165th Street -- which contracted out their management services to other organizations did not know the district manager's salary because it was encompassed in the overall cost for management services. The BIDs' failure to have knowledge of this important salary information makes it impossible for BID property owners to be fully informed of BID operations. Overall, the BID managers' average annual salary was $48,733.

As was discovered with administrative costs, the smaller BIDs paid their district managers a larger percentage of their operating budget (14%) with eight of these BIDs spending more than 20% on district manager salaries.(92) It is significant to note that all but one of these BIDs had operating budgets of less than $131,000, and the White Plains Road BID had an operating budget of only $67,700. The Church Avenue BID spent a higher percentage on its district manager's salary than any other BID. The Church Avenue BID manager's salary of $35,000 represented 29% of the BID's operating budget. At the same time, this BID allocated only $6,000, barely minimum wage, for two sanitation personnel. The larger BIDs spent three percent (3%) of their operating budgets on district managers' salaries.

A review of all personnel salaries (excluding those salaries paid to individuals pursuant to a service contract) revealed that BIDs budgeted 47% of their operating budgets for such salaries.(93) When totaled, the smaller BIDs budgeted 22% of their operating budgets to personnel salaries, those BIDs whose budgets were between $500,000 - $1 million budgeted 15% of their operating budgets to personnel salaries, and the larger BIDs budgeted 51% of their operating budgets to personnel salaries.

Overall, 26 BID staff members, including district managers, received annual salaries greater than $70,000 per year. The Grand Central, 34th Street and Bryant Park BIDs collectively employed 10, the Downtown Alliance employed seven, Times Square employed three, and the Fifth Avenue, Fashion Center and Metrotech BIDs each employed two staff members whose annual salaries exceeded $70,000 per year. More specifically, the Grand Central, 34th Street and Bryant Park BIDs paid their vice-president of security an annual salary of $144,999, and their vice-president of sanitation an annual salary of $114,530. Comparatively, the City's Police and Sanitation Commissioners each earned $110,000.

The issue of BIDs paying generous salaries to some employees may be contrasted with the issue of whether BIDs pay all employees a minimum wage. In 1995, GCSSC, which was created by the Grand Central BID and shares senior management personnel with the Grand Central, 34th Street and Bryant Park BIDs, was sued by several past and present members of its Pathways to Employment Program (PTE) for violating the Federal and State minimum wage laws.(94) Under the PTE program, homeless and formerly homeless individuals worked for the GCSSC performing jobs such as homeless outreach, maintenance, kitchen work, and various administrative tasks. Many homeless and formerly homeless individuals worked as "trainees" who received stipends for their services that were significantly less than minimum wage.

The GCSSC does not dispute that these trainees were paid less than minimum wage, and the Council's own review of the GCSSC contracts executed with outside organizations confirmed this fact.(95) Instead, the GCSSC argued that the trainees were not employees, and that the money paid was a stipend, not a salary. According to the Executive Director of the GCSSC:

These trainees who are with us are not employees. The forty dollars they receive is not a wage, hourly or otherwise. It is a stipend for travel expenses and for meals which they take outside of our center. Other living expenses... are provided through government assistance programs and by the Center's meal and shelter programs.
* * *

We have a training program typical to dozens of programs around the city. I have a list of many other organizations that do what we do. We offer a stipend which augments the public assistance they get.(96)
The lawsuit filed against the GCSSC contends that under State and Federal law, these "trainees" were in fact employees, and as such, deserved at least minimum wage for their services.(97) Similarly, the lawsuit contends that the low wages paid to trainees by the GCSSC made the corporation an attractive service provider to outside organizations.

Defendants' lower labor expenses either permit them to underbid other service providers who pay at least a minimum wage to their outreach workers, or allow them to field a vastly greater number of outreach workers for the same cost ostensibly providing a greater service.(98)
This issue raises serious questions concerning DBS' ability to conduct effective oversight of the BIDs. The contracts executed between DBS and the Grand Central, 34th Street and Bryant Park BIDs explicitly required that minimum wages be paid to all BID employees and contractors.(99) Despite the fact that PTE literature stated that workers are paid stipends, to the Committee's knowledge, DBS never raised questions regarding this issue.

As long as all wage laws are complied with, it is within the discretion of BID boards of directors to set compensation rates for its employees and contractors. Regardless of the compensation levels the boards of directors may set, it remains the BIDs' responsibility to ensure that their annual reports clearly set forth such compensation levels. As the Committee's outreach survey demonstrated, 85% of the respondents did not know how much their BID manager was being paid, and a review of current annual reports revealed this is the only salary publicly disclosed by most BIDs. By disclosing this information, BID property owners will be equipped and adequately informed to assess the quality of BID management and services.


Multiple Management

While municipal agencies and government officials are empowered to manage affairs on a City-wide level, BIDs were created to provide supplemental services at a more local level -- a single, distinct business district. In light of the sometimes limited services provided by the City, property owners pay an additional assessment so they may benefit from increased and more direct services. When more than one BID is managed by the same individual or organization, conflicts of interest may occur. It is inevitable that property owners in one BID will compete against property owners in another BID for managerial attention and services. The original intent of BIDs is clear. According to DBS, a "Business Improvement District is a... mechanism used by property owners and merchants to determine the future of their retail, commercial and industrial areas."(100) Both City and State legislation address this issue. Those laws provide that BIDs are required to provide supplemental improvements "which will restore or promote business activity in the district." (Emphasis added.)(101) While these provisions do not explicitly prohibit BID managers from administering more than one BID, such provisions do imply that multiple management by the same individual or organization contradicts the basic intent of the BID enabling legislation.

Currently, there is only one case where an individual manages more than one BID: the Grand Central, 34th Street and Bryant Park BIDs all share the same president. These BIDs also share senior management staff. During 1994, the management staff of these three BIDs also dedicated part of their time, and a small amount of revenues to help establish a BID in Jersey City, New Jersey.(102) After this became public, the staff declined to accept a $210,000 contract to act as consultants to the proposed BID.(103)

The Finance Committee is aware of only one other instance where an individual or organization managed more than one BID. Prior to the Summer of 1994, the Jamaica Chamber of Commerce (the "Chamber") managed both the 165th Street Mall and Jamaica Center Mall SADs.(104) In 1994, the Jamaica Center Mall terminated the Chamber's contract to manage its SAD. The Chamber is now the defendant in a million dollar lawsuit alleging fraud and mismanagement of the SAD.(105) (The specifics of this case are discussed in the Affiliation Conflicts section of the report.)

With the exception of the previously discussed case of the GCSSC, the Committee's review did not discover any evidence of mismanagement in the Grand Central, 34th Street and Bryant Park BIDs. However, the ability of any single district manager to run multiple BIDs will be severely tested in such a situation and could increase the potential for mismanagement. When more than one BID is managed by one individual or organization, it raises serious questions regarding the amount of time and resources that are being devoted to each BID. In fact, when the only BID manager responsible for managing more than one BID was asked by Council staff to evaluate his success in managing three BIDs, he stated: "I think we have done an excellent job with Bryant Park, we have done a good job with Grand Central, and I do not believe we have achieved all of our objectives with 34th Street."


Providing Services Outside of the District

Those contracts executed between DBS and the BIDs which were reviewed by the Committee do not explicitly prohibit the BIDs from providing services outside the BID boundaries. However, these contracts provide that BID services must be, "in relation to the district." Additionally, the district plans prepared by each BID state that services are provided for the, "promotion and enhancement of the district."(106)

The intent of the legislature in authorizing the creation of BIDs was clear. BIDs were created to, "provide for district improvements located on or within municipally or district owned or leased property which will restore or promote business activity in the district... provide for the operation and maintenance of any district improvement... and provide for additional maintenance or other additional services required for the enjoyment and protection of the public and the promotion and enhancement of the district..." (Emphasis added.)(107) Accordingly, the Committee concludes that the provision of services by BIDs outside their district's which do not inure to the benefit of the district is contrary to the enabling legislation and thus prohibited.

In light of the Committee's conclusion, the GCSSC's provision of services throughout New York City was, therefore, prohibited. Although technically an independent entity, there is little distinction between the GCSSC and the Grand Central BID. The GCSSC was created as an arm of the Grand Central Partnership, and shares senior staff members and board members.(108) More significantly, the corporations are so closely related that their financial statements are jointly audited. The last financial audit explained:

In view of the similarity of their objectives and their close financial and organizational relationships, including common management and overlapping Boards of Directors, it has been deemed appropriate to prepare combined financial statements of GCP [Grand Central Partnership], GCDMA [Grand Central District Management Association], and GCSSC [Grand Central Partnership Social Services Corporation] (referred to collectively as "the Organization").(109)
Additionally, the president of the Grand Central BID testified before the City Council's General Welfare Committee that the GCSSC was created as an independent entity so that it would be eligible for a grant from the New York City Department of Social Services for the provision of homeless services within the Grand Central BID.(110) Furthermore, since 1993 all GCSSC board members were direct employees of the Grand Central Partnership.(111) Clearly, the GCSSC is indistinguishable from the Grand Central BID.

The services provided by GCSSC outside the Grand Central BID's boundaries in no way enhanced, promoted or improved the Grand Central BID. A review of the contracts executed between the GCSSC and 17 outside agencies including banks, businesses and neighborhood associations, revealed that GCSSC staff provided outreach services to at least 50 locations and ATM vestibules outside of the Grand Central BID area during FY '95.(112) These locations included an ATM location in Rockaway, Queens, and a bank on West 14th Street in Manhattan. Additionally, the GCSSC had an oral agreement with the West Village Community Alliance to provide outreach services at Abingdon Square Park and Bleecker Street Playground in Greenwich Village. The GCSSC also executed a contract with the Port Authority of New York and New Jersey "to perform services in connection with the collection of waste paper at the World Trade Center, which is a facility operated by the Authority."(113)

While the Committee found no additional examples of BIDs that provided services outside of their districts, it did, however, find other instances where this was being considered. In 1994, discussions were held between the Bryant Park BID and several business owners on 6th Avenue, to consider the provision of BID services to properties located outside of the BID.(114) This scenario never came to fruition. Additionally, the minutes of the April 6, 1995 Village Alliance BID's board of directors meeting noted that the Fashion Center BID and the 5th Avenue BID were considering responding to the Village Alliance's security RFP. If acted upon, the Committee believes these scenarios would have been inappropriate.(115)



General Satisfaction

The Council's outreach survey showed inconsistencies in satisfaction levels among respondents regarding service delivery. Some possible explanations for these findings include:(1) BIDs have not always provided the level of service expected by many property owners and property managers, (2) they have not distributed services equally throughout the BID, or (3) they have failed to successfully publicize their efforts.

Less than half of the outreach survey respondents (45%) stated that they thought the BID was a good investment, while 55% were either unsure about, or disappointed with, their investment. Similarly, when asked if they were satisfied with BID services, only 18% said they were very satisfied, 30% said they were satisfied, and 15% were only mildly satisfied. At the same time, 37% of the respondents were either dissatisfied or unsure if they were satisfied. (These outreach survey results are depicted in the charts on the following two pages.)

See Mixed Assessment: Are you satisifed with your BID's local services?

See Mixed Assessment: Is your assessment a good investment?

To further analyze these statistics, the respondents were divided into two categories -- those respondents who stated they served on a BID's boards of directors and those who did not serve on such boards. Overall, 15% of the respondents indicated that they served on their BIDs' boards of directors. The Committee's analysis demonstrated that board members were disproportionately more likely to be satisfied with BID performance than non-board members.

Ninety-seven percent (97%) of the board members surveyed stated that they were either very satisfied, satisfied, or mildly satisfied with BID services. In contrast, only 57% of non-board members were content with BID performance. Only three percent (3%) of board members claimed any dissatisfaction with the BID, while 26% of non-board members were dissatisfied with BID services.

Additionally, 75% of BID board members thought the BID assessment was a good investment. In contrast, only 39% of non-board members thought the BID assessment was a good investment. Although the survey results did not provide any reasons for these wide discrepancies, there are several possible explanations: (1) board members may be receiving preferential treatment in their BIDs, (2) in light of their position, board members may not wish to publicly disparage their BIDs, and/or (3) there may be communication problems between BID management and non-board members.

The high level of dissatisfaction expressed in general by respondents in the outreach survey clearly indicates that BIDs may not always be meeting the needs of their constituents. In light of the fact that BIDs are sustained through compulsory assessments of property owners, it is troublesome that so many question the worth of their assessment and are dissatisfied with the services provided by their BID. The chart following the recommendations describes some of the services provided by the BIDs.

Note: This chart was unable to be reproduced.



Ninety-four (94%) of all the BIDs provided some level of sanitation services. Overall, BIDs allocated 20% of their operating budgets, or $8 million, to such services.(116) In general, sanitation services included sweeping streets and sidewalks, collecting garbage, removing or replacing trash receptacles, removing illegally posted bills, removing snow and ice, and representing merchants before the Environmental Control Board (ECB). While some BIDs hired sanitation personnel directly, other BIDs contracted out for sanitation services. Overall, BIDs reported that in FY '95 they directly employed or contracted out for approximately 330 sanitation workers.

The majority of respondents in the outreach survey reported they were pleased with their BID's sanitation efforts. Eighty-one percent (81%) who claimed their BID provided sanitation services stated that the area was cleaner. When comparing the response of BID board members with non-board members, satisfaction levels clearly differed but remained strong. Ninety percent (90%) of BID board members claimed their BIDs were cleaner, while 79% of non-board members claimed their BIDs were cleaner.

In light of the increased sanitation services provided by most of the BIDs, BID managers were asked if any reductions had occurred in the level of sanitation services provided by the City. Thirty-nine percent (39%) of the BID managers claimed that City sanitation services had been reduced during FY '95. Five of these BID managers claimed that these reductions were intentionally targeted at the BID because the BID already provided its own sanitation services. The Times Square BID requested an increase in its assessment, in part, to provide for an emergency fund of $85,000 to respond to cuts in City sanitation services.(117) The Committee attempted to determine if, in fact, the City had specifically reduced sanitation services to BIDs during FY '95. Although sanitation services were reduced City-wide in FY '95, because information about Department of Sanitation personnel deployment is not provided on a BID-by-BID basis, it was impossible for the Committee to determine if services were reduced in greater percentages in BIDs.

In total, these findings suggest that BIDs effectively provided sanitation services. The only known exception is the case of the Church Avenue BID. The BID's contract with the Church Avenue Merchants Block Association (CAMBIA) LCD requires that streets and sidewalks in front of the BID properties must be swept.(118) However, it was discovered during a walking tour of the BID, and later confirmed by the BID manager that, in fact, only the streets were being swept. As previously discussed in this report, property owners and store merchants were required to make additional cash payments to the sweepers if they wanted their sidewalks swept. Technically, this amounted to an additional "unofficial" assessment.



Collectively, BIDs spent more than $10 million for security personnel and services during FY '95. In addition to providing security officers, BIDs installed alarm systems and security lighting. During FY '95, the 21 BIDs that provided security personnel hired approximately 363 security officers. In some cases, like the Metrotech BID, security personnel patrolled the streets of the BID on a daily basis. Other BIDs, like the Woodhaven BID, only employed security personnel during specific days.

With regard to security services, there was a significant difference in satisfaction levels between BID board members and non-board members. Of those who stated their BID provided security, 81% of the board members thought the BID was safer, while only 55% of the non-board members thought the BID was safer. Possible explanations for these differences were previously stated in the general satisfaction section of the report.

Unlike City sanitation services which were reduced in FY '95, police services have gradually increased during the last several years. The Safe Streets/Safe City initiative funded by the New York City Council, whereby many new police officers were hired, contributed to the City-wide crime reductions. It was, therefore, not surprising that 94% of the BID managers reported no decrease in police services during FY '95, and 88% reported less crime during that same period.

Despite the substantial efforts made by both the City and the BIDs to reduce crime, a high percentage (40%) of respondents to the outreach survey, who stated their BID provided security, were unable to conclude the BID was safer. This finding could reflect a lack of communication between the BID and its property owners or the BIDs' failures to address security needs in all areas of their districts.



BIDs exist to primarily promote and improve the local business climate. Although 94% (31) of the BIDs offered some level of promotion and marketing services such as flyers, circular, coupons, newsletters, and shopping guides, only 57% of the outreach survey respondents knew their BID provided any such services. Of this group, 36% said that business had not improved or were unsure whether business had improved.

As with other services, the perceptions of board members versus non-board members clearly differed. Seventy-two percent (72%) of BID board members who claimed their BID provided such services thought local business had improved, while only 62% percent of the non-board members who claimed their BID provided such services saw an improvement in local business.

At their core, BIDs exist to promote and improve business. That such a significant percentage of the BID outreach survey respondents could not state that business had improved, suggests that the BIDs need to focus more attention on their marketing and promotional efforts. As highlighted in the Performance Measurement section of this report, many BIDs fail to adequately assess their performance where economic development is concerned. Many BIDs did not track indicators such as store front vacancies or jobs created within their district. Without this knowledge, BID managers may not be able to effectively measure their marketing and promotional services.


Social Services

The provision of social services in general, and homeless services specifically, is perhaps the most controversial BID activity. Can BIDs, which exist to promote economic development, also act in the best interests of the City's homeless population? In view of the increasing budget cuts in homeless services at the Federal, State, and local levels, the Committee is not prepared to recommend that BIDs discontinue providing such services. However, if BIDs continue to provide homeless services they must ensure that outreach staff -- those who work directly with the homeless -- are properly trained and supervised, and that outreach and security missions are kept entirely separate.

Thirty percent (30%) of all BIDs provided some level of social services which included, among other things, job training and donating goods to charitable organizations. Fifteen percent (15%) of the BIDs provided direct outreach services to homeless individuals. In addition to the three BIDs which utilized the GCSSC, the Times Square and Downtown Alliance BIDs also provided homeless outreach services.


Many concerns were raised regarding the GCSSC's homeless service programs in the Spring of 1995, when several former homeless outreach workers testified before the City Council's General Welfare Committee that they operated as "goon squads" who assaulted homeless individuals in order to remove them from certain areas.(119) These allegations became the subject of three separate investigations conducted by HUD, Robert M. Hayes, who conducted an investigation and wrote a report ("the Hayes Report") on behalf of the GCSSC,(120) and the Manhattan District Attorney's (DA) office. While the DA has not released its results, both the HUD and Hayes investigations concluded that serious managerial problems existed within the GCSSC.

HUD determined that sufficient evidence existed to conclude that there were incidents of physical harassment and/or assault of homeless individuals by GCSSC personnel and, as a result, rescinded a $547,300 grant to the GCSSC. The HUD report blamed these assaults on negligent GCSSC training and supervision of outreach workers and stated that the GCSSC should have known that its lack of supervision and training would inevitably lead to incidents of harassment and abuse.(121)

Although the Hayes Report found no evidence of organized goon squads, it determined that the GCSSC failed to provide staff with the proper levels of screening, training, and supervision; that its board of directors was not independent of the BID; that the outreach program was flawed in its design by attempting to provide security services and social services simultaneously; and that the Multi-Service Center needed to strengthen its programs and reduce its client base.) The report made several recommendations to significantly alter the program.

The Grand Central, 34th Street and Bryant Park BIDs utilized the GCSSC, a not-for-profit corporation which was established by the Grand Central BID and whose senior staff was also employed by the BIDs, to provide a wide range of homeless services. The GCSSC operated a drop-in, Multi-Service center, which provided homeless individuals with on-going counseling, education and employment programs designed to move them toward permanent housing and employment.(123)

As part of its employment program -- Pathways to Employment -- homeless and formerly homeless individuals worked for the GCSSC by performing maintenance and service tasks within the drop-in center, and conducting homeless outreach work on the streets. Some of these personnel were volunteers, while others were paid stipends or salaries. While most outreach programs employ trained professionals to provide services, GCSSC outreach personnel, according to GCSSC staff, could have provided such services after attending as few as two or three workshops.(124) While there is nothing inherently wrong with employing formerly homeless individuals to provide outreach services, the sensitive nature of these programs requires that workers be sufficiently trained. By any reasonable standard, attendance at two or three workshops does not qualify as sufficient training.

The danger of inadequately training and supervising workers should have become evident to the GCSSC and the BIDs five years before the "goon squad" allegations were made. In 1990 and 1992, two separate $5 million lawsuits were filed against the GCSSC. Although neither of these cases involved GCSSC outreach workers, they both alleged that workers in the Multi-Service Center used inappropriate force against homeless individuals.

In the 1990 incident, a homeless man who was using the Multi-Service center, alleged that he was assaulted and thrown through a glass window by a GCSSC worker.(125) The complainant told Council staff that on September 6, 1990 he entered the center and had an argument with a GCSSC worker. The complainant stated that he was removed by security from the facility and was later confronted by the GCSSC worker on the street who pushed the complainant through a storefront's glass window. As a result, the complainant allegedly suffered several injuries which resulted in a six-day stay in Bellevue Hospital, four weeks of bed confinement, and two months of confinement to his home.(126) This case was settled in 1993 for the sum of $27,500.(127)

The second incident took place on March 25, 1992 when a kitchen worker in the Multi- Service Center allegedly poured boiling water on a homeless person who was staying in the facility.(128) This incident, which occurred one day after the two men had an argument, resulted in the complainant spending three to four weeks in the New York Hospital-Cornell Medical Center Burn Unit where he received skin graft surgery.(129) This case also resulted in the filing of a $5 million lawsuit against the GCSSC that has yet to be resolved.(130)

A review of court documents suggests that supervision at the center was minimal. According to the deposition of the Executive Director of the GCSSC, the kitchen was typically staffed by one salaried staff person and between five and thirteen GCSSC workers who may have included volunteers and those who were paid stipends. Yet, this staff person was not responsible for the supervision of any other workers.(131)

This deposition also suggested that the Executive Director was poorly informed concerning the incident and was unaware of any steps that had been taken to prevent the alleged wrongdoer from returning to the center.

While neither of these incidents involved "goon squads" or outreach workers, they both pointed to failures in the supervision and management of the GCSSC program. Both of these incidents should have served as clear warning signals that greater supervision and training of workers was required far earlier than 1995 when the "goon squad" allegations were made. This supervision and training is especially critical given the sensitive nature of the outreach work performed. Unfortunately, as the Hayes Report and the HUD investigation detailed, this necessary supervision and training never occurred.

Not only were GCSSC staff insufficiently trained and supervised, but the outreach program combined the traditional social service elements of outreach services with a security component. According to the terms of the contracts executed by the GCSSC to provide outreach services at ATM vestibules, if outreach workers did not successfully encourage homeless individuals to seek assistance they were required to verbally "discourage" such individuals from staying inside the vestibules, and if that was unsuccessful, they were required to call the bank's security personnel. The result, according to the Hayes Report, was that GCSSC outreach workers routinely ejected homeless individuals from private property.(133) The Hayes Report stated that GCSSC's outreach program, "while achieving significant benefits, was flawed in its design by improperly blending the separate missions of outreach and security into a single program."(134)

GCSSC's outreach work at the Bleecker Street Playground in Greenwich Village further exemplified the dual nature of their outreach approach. GCSSC had an oral agreement with the West Village Community Alliance to provide outreach services at the Bleecker Street park and playground.(135) However, as Council staff discovered on a site visit, the playground itself was off-limits to adults unless they were accompanied by a child. Residents informed Council staff that GCSSC workers acted as security guards and routinely prevented adults without children from entering the playground. This is clearly a security mission and should not be confused with traditional outreach functions.

In total, it is clear that GCSSC suffered from mismanagement and poor staff training for an extended period of time, and improperly combined the separate missions of outreach and security. In response to the Hayes Report, the Grand Central Partnership adopted several recommendations including -- expanding the GCSSC board of directors, contracting with one or more experienced social service agencies to provide outreach services, and strengthening the programs of the Multi-Service Center.(136)

The GCSSC's homeless outreach program is easily contrasted with those of the Times Square and Downtown Alliance BIDs. Both of these BIDs utilized an independent contractor for the provision of homeless services. Unlike the GCSSC approach, the security and outreach components were distinct and separate. By hiring an experienced independent contractor, a BID can provide traditional homeless outreach services without being influenced by its security mission.

Under the terms of the contract executed by the Downtown Alliance and the John Heuss Corporation, outreach teams must consist of, "two Senior Outreach Case Managers who are also specialists in working with the Mentally Ill and Chemically Addicted (MICA) homeless population."(137) These outreach case managers were required to reach out to homeless individuals, assess the needs of such homeless individuals, provide appropriate referrals to shelters or other social services, and make every effort to persuade the individuals to agree to such referral.(138)

Similarly, the Times Square BID had two homeless programs, both of which employed independent contractors. The first contract executed with the Partnership for the Homeless required two "properly trained/experienced" outreach workers to work with a board certified psychiatrist. These outreach workers were required to encourage homeless people to seek services through a variety of methods. "The method used by outreach workers is to offer advice; workers do not remove individuals from the street... Repeated contacts are generally required to create interest in accepting the referrals that outreach workers will make to the appropriate shelters."(139)

The second Times Square homeless program, "The Times Square Consortium for the Homeless," was designed to target homeless individuals who are resistant to services. Organized by the BID, and funded by the BID and State and Federal grants, the project was directed by "Project Renewal" and consisted of a consortium of six local social service agencies. The goal of this program was to move individuals into a respite center that provided psychiatric and medical services, substance abuse counseling, support services, and food and clothing. Modified Assertive Community Treatment Teams consisting of a clinical social worker, a MICA specialist, and a peer counselor were to perform outreach services.(140) In both Times Square programs and the Downtown Alliance program, independent, experienced social service providers were contracted to provide homeless services, and outreach and security components were not improperly combined.



  1. NYC Admin. Code §25-415(a).
  2. "Starting and Managing Business Improvement Districts," New York City Department of Business Services, n.d., p. 8 and 13 (hereinafter refereed to as “Starting a BID”). The Committee did not find any record of in rem foreclosure proceedings having ever been commenced against any property owner for failure to pay a BID assessment.
  3. See, e.g. "Contract between the City of New York DBS and the 34th Street Partnership, Inc.," January 14, 1992, §1.03.
  4. Class 4 properties include the majority of properties which would be assessed in a BID. These would include office buildings, store buildings, commercial condominiums, factories, hotels, and theaters. Figures provided by DOF.
  5. Although the Committee's review did not include an assessment of BID outreach efforts during the creation of a BID, these survey results raise questions concerning the effectiveness and scope of such efforts.
  6. Some BID managers represented that the BID did not mail annual reports because of the cost. However, the BIDs’ not-for-profit status makes them eligible for significantly reduced mailing rates.
  7. The New York City Economic Policy and Marketing Group, which also conducted an outreach survey during the course of its BID research, reported similar problems with DOF lists. BIDs: An Evaluation,” p. 33.
  8. "Review of Findings of HUD Investigation of the Grand Central Partnership Social Services Corporation," 1995, p. 2.
  9. Field v. Grand Central Partnership Multi-Service Center, Supreme Court, Kings County, Index Number 27994/91, Verified Complaint, March 7, 1991.
  10. Riley v. Grand Central Partnership Social Services Corporation, Supreme Court, New York County, Index No. 23453/92, Examination Before Trial of Clem Leon Riley, April 8, 1994.
  11. These two cases are discussed in greater detail in the Social Services section of the report.
  12. "Report to the Board of Directors of the Grand Central Partnership on the Grand Central Partnership Social Services Corporation," Robert M. Hayes, 1995, p. 45 (hereinafter referred to as “the Hayes Report”).
  13. Diop v. Fifth Avenue Business Improvement District, Supreme Court, New York County, Index No. 133629/94, Verified Complaint, December 1, 1994, p. 2.
  14. New York Not-For-Profit Corporation Law §715.
  15. Ibid §717(a).
  16. Gertz v. Richards, Supreme Court, Queens County, Index No. 12727/94, Affidavit of George Silva, March 29, 1995.
  17. Ibid, 7-8.
  18. Gertz v. Richards, Supreme Court, Queens County, Index No. 12727/94, Verified Amended Complaint, October 6, 1994, p. 15.
  19. Gertz v. Richards, Supreme Court, Queens County, Index No. 12727/94, Affidavit of Daniel Kulka, April 7, 1995, pp. 2-10. Other correspondence from DBS shows that the Mall, which collects and shares pay telephone revenue with the City, did not pay the City any money from 1992-94, a period when the Chamber was operating the Mall. See also, "Letter from Leon Fonfa, Department of Business Services, to Daniel Kulka, vice-president Jamaica Center Improvement Association," March 27, 1995.
  20. Jamaica Chamber of Commerce v. Jamaica Improvement Association, Supreme Court, Queens County, Index No. 1206/95, Summons with Notice, January 17, 1995.
  21. Gertz v. Richards, Supreme Court, Queens County, Index No. 12727/94, Memorandum of Law in Support of Defendants Motion to Dismiss and Cross-Motion for Summary Judgment, March 2, 1995, p. 6.
  22. "Letter from Leon Fonfa, Department of Business Services, to Daniel Kulka," May 15, 1991.
  23. Letters from DBS to Daniel Kulka, May 1991 - April 1993.
  24. "Letter from Barbara Wolf, Assistant Commissioner DBS, to George Silva, president, Jamaica Center Improvement Association," April 11, 1994.
  25. "Contract Between the City of New York Office of Business Development [OBD] and Jamaica Avenue Mall Improvement Association, Inc.," August 21, 1989, §§1.05 and 6.03. See also, "Contract Between the City of New York Department of Business Services and Jamaica Center Improvement Association, Inc.," August 10, 1994, §§1.06 and 6.03.
  26. Gertz v. Richards, Supreme Court, Queens County, Index No. 12727/94, Verified Amended Complaint, October 6, 1994, pp. 10 - 11.
  27. Jamaica Center Improvement Association, Inc., Adjusted Trial Balance for the period ended June 30, 1995.
  28. "Financial Statements," Woodhull Community District Management Association, June 30, 1994, p.7.
  29. "165th Street Mall Improvement Association, Inc. Financial Statements Year Ended 1993," and, "Jamaica Center Improvement Association, Inc. Independent Auditors Report Years Ended June 30, 1994 and 1993.”
  30. Ibid.
  31. ---
  32. New York Not-For-Profit Corporation Law § 716.
  33. Ibid.
  34. The Committee determined these relationships through interviews with district managers and a check of the VENDEX system. Information on the VENDEX system was assumed to be correct as of October 5, 1995, the day Council staff reviewed the system. The VENDEX system does not include every LDC in the City, nor does it provide titles of board members. As a result, there may be other board members in other BIDs who also sit on related LDC boards, and it is difficult to determine if those common board members are officers of the LDC boards.
  35. These relationships were determined through a variety of sources including interviews with BID managers, checks on the VENDEX system and documents provided by the BIDs to the Committee.
  36. "Pitkin Avenue Business Improvement District Brownsville, Brooklyn: Annual Report," April, 1995.
  37. See e.g. "Contract between the City of New York DBS and Grand Central District Management Association, Inc.", July 30, 1993, §10.16.
  38. "City BIDs in a Bind as Pay Slows," Crain’s New York Business, July 13, 1992, p. 3.
  39. Establishing a BID, p. 8.
  40. The BID Manual, p. 28.
  41. "East Brooklyn District Management Association Inc. Financial Statements," June 30, 1994, p. 3.
  42. "East Brooklyn District Management Association Annual Report Fiscal Year 1994-95," Section II.
  43. Ibid §5.
  44. Establishing a BID, p. 27.
  45. In FY' 94 the Washington Heights, Brighton Beach, and North Flatbush Avenue BIDs submitted reviews rather than audits. The Church Avenue BID submitted the audited financial statements of the LDC with which it contracted for services. The Union Square and Flatbush Avenue BIDs submitted a Statement of Revenue and Expenses. The Council did not receive any financial statements from the Woodhaven and Grand Street BIDs.
  46. "Letter from Barbara Wolf, Assistant Commissioner DBS, to George Silva, president, Jamaica Center Mall Improvement Association," April 11, 1994. See also, "165th Street Mall Improvement Association, Inc. Financial Statements Year Ended June 30, 1993 Unaudited."
  47. See "Understanding Compilation Review and Audit, Reporting on Financial Performance," American Institute of Certified Public Accountants, 1992.
  48. According to a review of contracts between DBS and various BIDs, supplemental services may include cleaning and sweeping; ice and snow removal; security; promotion, marketing and advertising; and additional services that enhance the safety, convenience, cleanliness, attractiveness or usefulness of an area. Capital improvements may include the design and installation of new signage; planting; maintenance, refurbishment or replacement of sidewalk paving; and additional capital improvements which enhance the safety, convenience, attractiveness or usefulness of a district.
  49. These sums do not include approximately $9 million in contracts for capital projects by the Grand Central, 34th Street and Bryant Park BIDs. These BIDs utilized bond and loan revenue, rather than operating funds, to finance these contracts and tracked these monies in separable, capital budgets.
  50. Establishing a BID, pp. 25-26. Despite language in some BID contracts, and in the City's BID legislation, which require BIDs to comply with Procurement Policy Board (PPB) rules, a DBS administrator stated to Council staff that these strict provisions were not enforced.
  51. Establishing a BID, pp. 25-26. DBS offers non-binding suggestions concerning the manner in which BIDs conduct their contracting process. This includes using Requests for Proposals conducting telephone solicitations, placing advertisements in newspapers, maintaining records, and adopting internal contracting procedures.
  52. The Grand Central, 34th Street and Bryant Park BIDs share the same procedures.
  53. The importance of conducting background checks is illustrated by the Nassau Mall Improvement Association's 1994 contract for $62,950 with Barretti Carting Corp. In July, 1995 Barretti Carting was indicted by the Manhattan District Attorney (DA) on 11 felony counts including Grand Larceny. See, Morgenthau v. Allocca, Supreme Court, New York County, Order to Show Cause with Temporary Restraining Order, June 19, 1995; and "Mob Linked Firm Had $5M Biz With City," New York Post, July 3, 1995. In this case, because the contract was for less than $100,000 there was no requirement that VENDEX be checked. However, even if VENDEX had been checked, as of November 3, 1995 there were no advice of cautions listed on VENDEX in relation to the company.
  54. The Committee has elected not to identify the organization in question due to its decision to refer this matter to the proper authorities.
  55. "Management Agreement Between Church Avenue District Management Corporation and Church Avenue Merchants Block Association," July 1, 1994, Section 1.2.
  56. This information was obtained from a review of the documents supplied by the BIDs and formal interviews with BID managers. In the case of Pitkin Avenue, ongoing security services were provided by Cambridge Security Company, and in the case of Flatbush Avenue, regular sanitation services were provided by Coney Island Youth Development Inc. The Church Avenue BID hired security on an as needed basis for holidays, while the Woodhaven BID hired the Corporate Loss Prevention Associates to provide security personal for special banking days.
  57. ---
  58. ---
  59. The 11 BIDs are: White Plains, Brighton Beach, Church Avenue, Graham Avenue, Grand Street, Kings Highway, North Flatbush, Columbus/Amsterdam, Nassau Street Mall, 125th Street, and 82nd Street.
  60. District manager salaries compiled from budgets and staff lists where provided.
  61. These eight are White Plains Road, Nassau Mall, Church Avenue, Graham/Woodhull, North Flatbush, Pitkin Avenue, Grand Street, and 82nd Street.
  62. These salaries include all personnel who are paid a salary directly by the BID. This can include administrative staff, as well as staff hired for the provision of direct services such as sanitation and security.
  63. Archie v. Grand Central Partnership, United States District Court, Southern District, No. 95 Civ. 0694(SS), Complaint, February 1, 1995.
  64. See e.g., "Letter of Agreement Between Edward Gorgon Co., and Grand Central Partnership Social Services Corporation," September 1, 1994; and, "Agreement Between Port Authority of New York and New Jersey and Grand Central Partnership Social Services Corporation," May 22, 1994.
  65. "The Transcript of the Minutes of the Committee on General Welfare," New York City Council, May 10, 1995, pp. 105, 132-133.
  66. Archie v. Grand Central Partnership, United States District Court, Southern District, No. 95 Civ. 0694(SS), Complaint, February 1, 1995, p.4.
  67. Ibid, p. 17.
  68. "Contract Between the City of New York Department of Business Services and the Grand Central District Management Association," July 30, 1993, §8.06.
  69. Starting a BID, p. 2.
  70. New York General Municipal Law §980-c(a); NYC Admin. Code §25-404 (a).
  71. "Report to the Audit Committees of the Board of Directors," January 9, 1995, KPMG Peat Marwick.
  72. "Plan to Aid New Business District Rejected," New York Times, April 25, 1995, p. 27.
  73. "Financial Statement and Independent Auditor Report," Jamaica Center Improvement Association, 1994, p. 4.
  74. Gertz v. Richards, Supreme Court, Queens County, Index No. 12727/94, Verified Complaint, October 6, 1994.
  75. See e.g. "Contract Between the City of New York Department of Business Services and the Grand Central Partnership," July 30, 1993, §2A.02, and "District Plan for the Fashion Center Business Improvement District of the City of New York Borough of Manhattan," September 24, 1992, §IIIA. The contract between DBS and the Alliance for Downtown New York BID allows the BID to perform services proximate to the district as long as properties within the district are principally benefited. See, §2A.02.
  76. New York General Municipal Law §980-c.
  77. The Hayes Report, p. 3.
  78. "Grand Central Partnership, Inc. Grand Central District Management Association, Inc. Grand Central Partnership Social Services Corp. Combined Financial Statements," June 30, 1994, KPMG Peat Marwick LLP.
  79. "The Transcripts of the Minutes of the Committee on General Welfare," New York City Council, May 10, 1995, p. 125.
  80. The Hayes Report, p. 3.
  81. Thirty of these locations were connected with a contract between the GCSSC and the Chase Manhattan Bank. This contract was recently canceled. These contracts indicate that GCSSC was not providing these services for profit.
  82. Contracts supplied by the GCSSC to the City Council.
  83. "Commercial Property/The Avenue of the Americas; Tug of War Over a Business Improvement District," The New York Times, January 8, 1995, Section 9, p. 9.
  84. The Committee does not, however, wish to prevent BIDs from providing pro-bono technical assistance to each other. It was clear during interviews with district managers that many had benefited from this type of regular dialogue with other district managers.
  85. Pitkin Avenue and East Brooklyn are the only two BIDs which did not provide sanitation services. These two BIDs concentrated their efforts on security services.
  86. Information provided to the City Council Finance Committee as part of its assessment approval process.
  87. "Management Agreement Between Church Avenue District Management Corporation and Church Avenue Merchants Block Association,” July 1, 1994, §1.2.
  88. "The Transcript of the Minutes of the Committee on General Welfare," New York City Council, May 10, 1995.
  89. Robert M. Hayes was the director of the New York City based Coalition for the Homeless from 1982-89.
  90. "Review of Findings of HUD Investigation of the Grand Central Partnership Social Services Corporation," 1995.
  91. The Hayes Report.
  92. Ibid.
  93. "Transcripts of the Minutes of the Committee on General Welfare," New York City Council, May 10, 1995, p. 137-38.
  94. Field v. Grand Central Partnership Multi-Service Center, Supreme Court, Kings County, Index No. 27994/91, Verified Bill of Particulars, November 25, 1991, p. 1.
  95. Ibid, p. 4.
  96. "General Release Executed by Todd Field," February, 1993.
  97. Riley v. Grand Central Partnership Social Services Corporation, Supreme Court, New York County, Index No. 23453/92, Verified Complaint, August 7, 1992.
  98. Riley v. Grand Central Partnership Social Services Corporation, Supreme Court, New York County, Index No. 23453/92, Examination Before Trial of Clem Leon Riley, April 8, 1994, p. 66.
  99. Riley v. Grand Central Partnership Social Services Corporation, Supreme Court, New York County, Index No. 23453/92, Verified Complaint, August 7, 1992.
  100. Riley v. Grand Central Partnership Social Services Corporation, Supreme Court, New York County, Index No. 23453/92, Examination Before Trial of Jeff Grunberg, April 14, 1994, pp. 31-33.
  101. Ibid, pp. 63-64.
  102. The Hayes Report, p.38.
  103. Ibid, p. 4.
  104. "Letter from Andrew Manshel, General Counsel Grand Central Partnership, to Committee Staff," August 23, 1995.
  105. "Letter from Peter L. Malkin, Chairman Grand Central Partnership, to the Grand Central Board of Directors," August 3, 1995.
  106. "Homeless Outreach Services Contract Between Alliance for Downtown New York, Inc., And John Heuss Corporation," June 19, 1995, p. 1.
  107. Ibid.
  108. "Letter of Agreement Between the Partnership for the Homeless and the Times Square Business Improvement District," June 30, 1995, and "The Partnership for the Homeless, Inc., Proposal to Operate a Comprehensive Outreach Effort for Homeless Individuals in the Times Square Business Improvement District," September, 1993.
  109. "The Consortium for the Times Square Homeless Demonstration Project: An Application for Funding," February, 13, 1995, p. 9-13.