Making a BID for the Back Bay
Group seeks to create a business improvement district to keep the neighborhood vibrant
Block parties in Springfield. Graffiti removal in Hyannis. Colorful murals on Boston’s Rose Kennedy Greenway. For two-plus decades, property tax surcharges for Business Improvement Districts poured millions of dollars into Massachusetts downtowns. Momentum is growing for more, with five of the state’s 10 existing BIDs approved in the past six years and at least a half-dozen additional districts under consideration.
Next up: the Back Bay?
If enough landlords agree, they would create the state’s biggest BID as measured by assessed property value, taxing commercial properties across 65 blocks of the neighborhood — from Newbury Street brownstones to the Prudential and Hancock towers.
After talking about forming a BID for several years, the Back Bay Association is moving ahead. On Oct. 23, the business group’s board of directors approved a funding formula that would raise $3.5 million a year — roughly seven times the organization’s current budget. The BBA would morph into Boston’s fourth BID, supported by a steady stream of property tax revenues. The two-person staff would grow to four, and outside contractors would be hired to spruce up the neighborhood. Think sidewalk power-washing, goodwill ambassadors, homeless outreach. More summer planters. More winter lights.
Some of this work has long been the purview of the BBA, which currently gets revenue from fund-raising and membership fees. But its annual budget dropped from $500,000-plus before COVID to around $400,000 today, president Meg Mainzer-Cohen said. Property owners became harder to track down as buildings were increasingly sold to faraway buyers. When she started at the BBA, she could walk into any building lobby and talk to someone. Now, many key properties are held by anonymous LLCs, hedged off by what she calls “electronic moats.”
Persuading them to join will require a political campaign. Mainzer-Cohen and her colleagues need to win support
from owners representing 60 percent of the real estate in the BID area and at least 51 percent of the assessed valuation — and, separately, the Boston City Council. They’ll make the case that the payoff would come from stronger property values. The pitch: Downtowns across the United States suffer from increasing homelessness, vandalism, and infrastructure problems, and the Back Bay is not immune; more support can help ward off the urban decay afflicting so many other cities.
Mainzer-Cohen fully expects months of campaigning ahead. If successful, it could take a year before the BID becomes official.
The Back Bay funding formula establishes three tiers of assessment rates that are tied to a property’s value, maxing out at 75 cents per $1,000 of assessed value. The resulting end payments represent a wide range: Tasty Burger, for example, would pay $1,000 a year, while Boston Properties — which owns the Prudential Center and 200 Clarendon (aka the Hancock tower) — would owe $384,000.
BIDs often arise in response to challenges. The Newmarket BID was born last year amid concerns about encampments and drug use at nearby Mass. and Cass, while the Greenway BID provides upkeep funds for the 1.5 miles of parkland atop the tunnels that replaced the old Central Artery.
The Downtown Boston BID finally sprang to life in 2010 after a giant hole where the Filene’s department store used to be created an image of a bombed-out shopping area. DLA Piper lawyer John Rattigan, a crucial player in the Downtown Boston BID’s formation and its early years, said deliberations started in the 1990s but proponents couldn’t initially muster enough support. The Great Recession proved to be a great motivator. As with the plan for the Back Bay, the downtown BID replaced a preexisting business group — or supercharged it, depending on your perspective.
Rattigan said reservations about freeloaders hampered previous Boston BID efforts. At the time, property owners could opt out of making BID payments but still reap the benefits. That changed in 2012, when the state Legislature created the current system. Once a BID is in place now, everyone pays. But BIDs need to be renewed every five years.
Not everyone is a fan. After the Legislature made participation mandatory, Westfield business owners voted to dissolve their BID. Similar concerns led to the dissolution of a BID in downtown Northampton.
Jon Hurst, president of the Retailers Association of Massachusetts, said most of his members aren’t enthusiastic about BIDs in general. They worry about BIDs evolving into the equivalent of government agencies, paying for expenses like public safety and trash pickup that should instead be covered by the actual city government. Hurst’s ultimate concern: more taxes means higher rents, with no guarantee of higher sales volume to keep pace.
Rattigan, who is advising the Back Bay group, said the BID effort will eventually result in an agreement with City Hall to ensure BID dollars go to extra services, rather than supplanting city funds for existing ones. And the Back Bay BID’s organizers say they are proposing a leaner machine than the one downtown, with half the budget and considerably lower assessments for comparable properties. (The downtown
BID is also roughly half the size, 100 acres versus the Back Bay’s 210.) Mike Jammen, principal of Newbury Street landlord UrbanMeritage and a BID proponent, said that while he expects some resistance from fellow property owners because of the economics, he hasn’t received any pushback about the need.
Demand for BIDs is only expected to grow. Michael Nichols, president of the Downtown Boston BID, said other communities considering them include New Bedford, Reading, Brockton, Hull, and Gloucester. Nichols said Massachusetts cities are catching up to a tool that’s common in other parts of the country.
Once greeted with skepticism, the Downtown Boston BID is now considered a resounding success, a model for others. In a June meeting of more than 100 people, the BID received unanimous support to re-up its authority for another five years. It took time, but Nichols and his team apparently won over any remaining skeptics. And the need remains clear, in a district pockmarked with empty storefronts.
No one expects everyone to climb on board with the Back Bay Association’s plan immediately. That said, downtown areas, in many ways, need more help than ever before amid the rise of online commerce and remote office work. The Back Bay has weathered those storms better than many other business districts, but could still use the help.
We will soon find out whether enough property owners there are willing to pay for it.