Downtown businesses split over improvement plan

Downtown businesses split over improvement plan

NEW BEDFORD — One group of downtown business and property owners says the city center is struggling, that the people invested there should pool their money to improve both the place and the sales pitch to bolster commerce. 

Another group of business and property owners says no way. They think the plan to do this is at best unnecessary, and at worst a power grab by big players that will lead to rising rents, turning public spaces private, harassing homeless people, and driving lower-income residents from surrounding neighborhoods.   

Roughly seven square blocks west of the waterfront have become a battleground. A petition drive is on, opponents are preparing for a public meeting next month where the issue could be decided, black-on-yellow signs are appearing on storefronts: “NO BID IN DNB.”

“DNB” is Downtown New Bedford. “BID” is “Business Improvement District.” Plans call for a zone running from a portion of MacArthur Drive west to City Hall, from the SRTA bus terminal south to the Zeiterion Performing Arts Center.

Downtown Business Improvement District 2024 map. Credit: Image provided

A BID — which collects annual assessments from property owners to pay for services — is now proposed, revisiting a notion that went nowhere when it first surfaced 10 years ago. 

This time, the proposal for a smaller district has advanced further than it did in 2014, as the organizers have mustered enough support to meet a state law requirement to put the question to the City Council. The district would be run by a volunteer board of directors, but it must first be approved by the council.

A second council committee hearing is set for June 10. As that panel, the Finance Committee, comprises all 11 councilors, a majority vote in effect assures council approval. A full council vote could be scheduled days or weeks later.

Meanwhile, the debate so far is mostly consistent with arguments about assessment districts that have unfolded for decades. First established in Canada in 1970, these districts have emerged in the United States and other countries to boost urban neighborhoods with street cleaning and beautification, signs, events, marketing, and often private security. 

In this instance, opponents also raise questions about the role of an unpaid project consultant, Marco LiMandri, who was one of several people investigated by the police and the FBI in connection with an improvement district in San Diego about 20 years ago. LiMandri, who owns a home and a commercial building in New Bedford, was never charged with a crime.

Competing views in downtown New Bedford

Among New Bedford BID supporters are Mayor Jon Mitchell and a Who’s Who of the local restaurant and business world. 

There’s Jim DeMello, former owner of Acushnet Rubber, who established the DeMello International Center on Union Street. There are the owners, co-owners and other folks who helped launch The Black Whale, Cisco, Moby Dick Brewing, Carmine’s at Candleworks, Freestone’s, Cork, Rose Alley, and Cultivator Shoals, among others. Also backing the BID are big nonprofits, including The New Bedford Whaling Museum, Buzzards Bay Coalition, Community Health Center, and the YMCA. 

Among opponents are owners of the smaller businesses that help shape city center life, including Calico, The Baker, Destination Soups, No Problemo, and TL6 The Gallery. Most own their business but not their property; some own both.

The opposing camps include two entrepreneurs who have switched sides — in opposite directions. Their views capture the moment in the life of downtown New Bedford.

Jay Lanagan, who has co-owned or helped create many restaurants that have been part of downtown New Bedford’s resurgence, opposed the BID proposal 10 years ago. Now, he’s a strong advocate. 

He said he did not see the need for a BID to help draw visitors downtown in 2014. The Zeiterion Performing Arts Center was in full swing, and the UMass Dartmouth College of Visual and Performing Arts in the Star Store on Union Street featured exhibitions in the ground-floor gallery. 

Much of that has changed, Lanagan said. Downtown is still recovering from the pandemic, and last summer suffered two setbacks: the Zeiterion closed for extensive renovations and is not expected to reopen until next year, and the CVPA left the Star Store.

“We desperately need to come together to preserve our culture, to heighten our assets and move the city forward,” Lanagan said. 

Devin Byrnes, owner of Destination Soups on Union Street, sees it the other way. 

He supported the BID in 2014, but now he said developments that will bolster downtown are close to fruition, including three apartment buildings under construction along Union Street and, most likely by next year, the arrival of South Coast Rail.

“You’re going to see a substantially different downtown,” without a BID, he said. And the BID, he said, could burden smaller property and business owners with costs they cannot afford. 

BID assessments will be paid directly only by property owners. BID opponents fear that the owners will pass these added costs along to their tenants, causing hardships. The plan includes a temporary fee waiver option in the case of “substantial” financial difficulty.

Advocates, of course, don’t guarantee that rents won’t ever go up, but they argue that’s likely in any event. If the BID succeeds, they say, entrepreneurs stand to gain. 

“There shouldn’t be an empty storefront down here,” said former City Councilor Kathy Dehner, a strong BID supporter who owns the Whaler’s Tavern building inside the proposed district. Yet there are vacancies — all over downtown. The BID is an effort to fill those spaces. 

“We’re all hungry for that fix, that thing that’s going to change New Bedford,” she said.

BID particulars 

District assessments will be figured with a formula based on the size of the building and the piece of land it sits on. The levy is eight cents a square foot for the building, a dime for the land. 

Owners whose assessment is under $1,000 are not required to pay. Neither are nonprofits, which are among the largest properties, although several have volunteered to do so. The maximum annual assessment is $10,000. 

BID proponents count 53 owners of 85 parcels, including the City of New Bedford and nonprofits. There is no breakdown of properties that fall above or below the $1,000 minimum.

Preliminary plans show the BID running on an annual budget of $195,000, plus $45,000 in contract services paid for by the city out of the Downtown Parking Enterprise Fund, which is not tax revenue.

The volunteer board of directors, not yet in place, would decide how to spend that money. Under the plan, nearly half of the $195,000 would be spent on marketing, while nearly half would be split about evenly between sidewalk cleaning and improvement and administration, including renting an office. There’s also a contingency fund of less than 5%. 

A two-page statement put out by the eight-member BID steering committee this month says the committee will choose up to 25 board members. Half will be property owners, 30% business owners, 20% artists, residents and “community leaders.”

Lanagan and another steering committee member, commercial realtor Jeff Pontiff, emphasized that they want the board to represent the full range of people with a stake in downtown, including BID opponents. 

Lanagan said this would be a way for entrepreneurs who run smaller operations to have more of a say, not less, in downtown’s future. 

Concerns about social justice, a consultant’s past

Opponents are suspicious. They worry about the big players taking over. They worry about an array of social harms the district could cause. 

Jenny Newman-Arruda, who owns TL6 The Gallery on William Street, said these districts are meant to drive up property values, but she said that would mean higher rents. She and other opponents fear that could drive some tenants out of the district, and have ripple effects in surrounding lower-income neighborhoods.

“This is extreme gentrification,” Newman-Arruda said. 

Newman-Arruda and other opponents, including Elissa Paquette, who owns the Calico boutique on Union Street, and Erik Andrade, a social justice advocate, fear that public spaces, such as Wing’s Court, will be taken over by private interests, restricting public access. They also worry about private security using heavy-handed tactics against homeless people and minorities. 

Rhonda Fazio, an artist who owns Interwoven, an art gallery conducting classes and events on Pleasant Street, shows anti-BID materials she handed out at last week’s AHA! Night. Fazio was gathering petition signatures against the project. Credit: Arthur Hirsch / The New Bedford Light

Paquette, who is also president of Downtown New Bedford, Inc., a small nonprofit that promotes downtown, said she does not see how the BID would benefit small businesses. Even if it did, she said, higher profits would not be worth the social costs.

BID proponents, including Lanagan and LiMandri, say the opponents are reacting more to their own fears than to the plans. They point out, for instance, that they have no plans for private security, unless the city Police Department requires it occasionally for special events. 

Lanagan said rising housing cost “is a valid concern,” but it goes beyond the district. Plans are in the works for mixed-income housing across the city, he said, including downtown. He pointed to the three apartment buildings under construction on Union Street. Most of those 125 units are affordable housing, he said.

To address concerns about LiMandri’s role, BID proponents, including LiMandri, agree that if the BID is approved, he will not be on the board of directors and will not have a paid position with the organization. Strictly speaking, LiMandri said the New Bedford BID is not a project of his company, New City America, in that the company would not have a contract to run the district.

Based in San Diego, New City America has been working with cities to create these districts since 1996. LiMandri lists 94 projects in which it has played a role — variously in preliminary inquiries, consulting, and creating districts. Most of their work has been in California, but also 11 other states.

LiMandri said he was invited by the California-based Garfield Foundation to give a presentation in Boston in November 2013. That’s how he got introduced to people from New Bedford. In February 2014, he spoke at the Whaling Museum.

“I was stunned by how beautiful downtown was,” LiMandri said in a phone interview. “It looked like a movie set, with the cobblestone and the beautiful buildings.”

He said he thinks of cities in terms of “form” and “content,” the former being the buildings and the streets, the latter the businesses and other elements that fill the spaces. New Bedford has great form, he said, and needs work on the content. 

His work on assessment districts around the year 2000 got the attention of authorities who were tipped off by a San Diego city official with whom LiMandri said he’d had a personal falling out. The result was an investigation by city police and the FBI. 

A 65-page report completed in 2007 — leaked by the public official who tipped investigators in the first place — claimed two legal violations against LiMandri. He was accused in the report of swapping a $50,000-a-year job as executive director of a newly created district with another man for two Community Development Block Grant contracts. He was also accused of breaching state ethics law by taking the director job after working to help establish the district. 

The local District Attorney declined to bring charges. The state attorney general had already ruled in 2005 that one state ethics law invoked by investigators would not apply to a consultant accepting a job with an improvement district they had earlier helped to establish. 

City officials question, applaud

City councilors heard from LiMandri and many others in a Finance Committee meeting last month that ran more than three hours. Councilors had questions then, and still do. 

“They are forcing people to pay for something that the city should be providing,” At-large Councilor Linda Morad said in an interview. “I’m uncomfortable forcing people to pay for something they don’t want to pay for.”

Morad, who chairs the Finance Committee, said she has a list of concerns about the money. 

She noted that the assessments, if they are not paid, will become tax liens, and the city will be responsible for collecting them. That’s because the money sent by a property owner is applied first to service fees, then to taxes. Delinquencies in service fees — such as water, sewer, and a possible BID levy — are covered with property tax payments, leaving the owner owing taxes. 

Morad said “it sticks in my craw” that nonprofits are volunteering to pay their BID levy, even though they’re exempt, and they do not pay city taxes.

“But when they call 911, it’s not the BID that shows up,” she said. 

She also noted that the law allows the nonprofits who volunteer to pay to also stop paying. If that leaves the BID short of funds, Morad asked, who would make that up? She said she’s seeking more information, but if she had to vote now, it would be “No.”

At-large Councilor Shane Burgo said he’s a sure “No” vote.

If entrepreneurs feel they need a separate district to provide services that the city should provide, Burgo said, “Downtown is realizing this government has failed them … This is a failure of government.” 

Ward 3 Councilor Shawn Oliver said he’s still gathering information, but he’s leaning in favor. He said he’s seen that these districts elsewhere have improved urban neighborhoods, and downtown could use some help. 

“It’s a dereliction of duty if we continue to do nothing, stay the course,” Oliver said.

Ward 1 Councilor Leo Choquette said he’s leaning in favor. Still, he said “the last thing I want to do is hurt small businesses,” and he’d like to see some sort of protection for those financially stressed by rising rents.

City spokesman Jonathan Darling said the BID would build on work the city is already doing downtown, including stepped-up five-day-a-week trash pickup, landscaping, seasonal decorations, and marketing.

Mayor Mitchell said these districts have been around for decades and are “widely seen” as a way to bring visitors to city neighborhoods.

“I applaud the property owners in our Downtown for showing the initiative to establish a BID among themselves, an effort I am pleased to support,” he said.

Email City Hall reporter Arthur Hirsch at [email protected].

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