BID deal reached

Real Estate Weekly, August 17, 1994 by Lois Weiss

An agreement worked out between the 34th Street Partnership Business Improvement District (BID) and the McAlpin, a primarily residential building, has resulted in a new budget being passed for the BID by the City Council. The mayor is expected to sign the budget ruling this week.

Under the terms of the agreement, the McAlpin, as well as the two other residential properties in the BID, will receive a 40 percent reduction in their BID assessment on the residential portion of the properties. The commercial portions will continue to pay a full assessment, based on the square footage of the usage. The increase will bring the BID's current $5.775 million budget to $6.317 million.

Daniel Biederman, president of the BID said, "Everybody is happy as a clam."

Biederman said they decided to give a 40 percent discount to residential portions of the three buildings in the district since the Council wanted to accommodate the legal concerns around the rent stabilization program. "They voted for a turnaround in the neighborhood," added to the Biederman. Additionally, in order to settle square footage differences, the McAlpin health club will be added to the commercial portion.

On January 1st, all building owners in the 34th Street BID will have their bill adjusted upward to accommodate the new budget.

Robert Rosenberg, chairman of Grenadier Realty Corp., said "We appreciate the support we got from the entire Finance Committee and particularly the Chairman, Herb Berman, in helping us reach a compromise."

The dispute between the McAlpin and the BID had gone on for over two years, but was resolved when the McAlpin turned to City Council members for help in ending a stalemate. At that point, the BID was offering a one-third discount.

While Herbert E. Berman, the Queens Councilmember who chairs the Finance Committee, declined to become involved in the settlement, a vote on an increased budget for the BID was held up until a compromise was reached.

Berman said his personal feeling is to minimize government interference in the internal philosophy of BIDS. "We were just gentle persuaders," he said. "They settled it between themselves. My prescription was to resolve it amicably, because if they didn't, government would have no choice but to make a decision."

Berman said this was the first time the issue of a BID's handling of residential property assessment had come before the Council. While he said it is an interesting issue, he is hoping the Council will not have to intervene again.

Nevertheless, he knows that many BIDs are forming, including an Upper East Side BID that is expected to be made up of primarily residential properties.

"My guess is that improvement districts are the movement of the future," Berman said. "Government should be encouraging rather than limiting their progress."

As for those who contend they should not be paying for services twice, Berman said, "They are absolutely right. On the merits, they are right. When they pay taxes they should expect a level of service. But the level of reality is that Government can't afford to provide the level of services you want provided, so a lot of districts have adopted an intelligent approach to self-improvements."

Berman confided he is interested in creating a further incentive to the owners who pay for the BlDs. "This is merely in the germination stage," he said. "I'm trying to arrive at an equitable formula to encourage this."

While he pointed to benefits for both businesses and residences in areas like 34th Street and Times Square, who are enjoying greater security and cleanliness, Berman noted "The mayor and governor would have to get on line and I don't know if the city can afford to do this."