It’s no accident that the all the neighborhoods in Oakland that are likely to spring to mind when you think thrivingTemescal, Lakeshore, Rockridge, Uptown and KONO—also happen to be the neighborhoods with CBDs. Community Benefit Districts are made up of business owners and property owners in a neighborhood that decide to tax themselves an extra fee to fund projects they feel will be collectively beneficial.

Some organizations, like those in Rockridge and Montclair, are made up solely of business owners and therefore are technically BIDs (Business Improvement Districts). There are ten CBDs/BIDs in Oakland currently, and many other neighborhoods hope to join their ranks.

CBDs have done much of the heavy lifting responsible for the recent economic growth, strengthened security and vibrancy in the areas of Oakland to which they tend. If you’ve ever wondered about the flags on the street lamps that say “TEMESCAL,” “HIP,” “COOL,” or who puts holiday lights up in the trees, or who employs the security officers with the orange vests that say “Uptown,” the answer is CBDs. But there is much more to them than those visible clues.

CBDs work to attract businesses to vacant buildings, improve facades and signage, abate graffiti, dispose of trash, trim trees, enhance street lighting, act as a public forum and city liaison, and coordinate programming like street fairs and farmers markets, to name a few. To the extent that neighborhoods can drive the quality and character of their economic growth, CBDs are the entities at the steering helm.

Solar powered ‘BigBellys’ installed by Lake Merritt/Uptown hold more trash than standard garbage cans and offer appropriate recycling options. They also digitally alert the district when they need to be emptied.

Solar powered ‘BigBellys’ installed by Lake Merritt/Uptown hold more trash than standard garbage cans and offer appropriate recycling options. They also digitally alert the district when they need to be emptied.

Of course, good old-fashioned voluntary Merchants Associations have long been a part of the urban ecosystem. CBDs, however, benefit from a much more intimate partnership with the city. Once a CBD has been established, participation (paying taxes to the group) is mandatory, and therefore funding is more robust and reliable than it tends to be for Merchants Associations. Rather than being self-regulating, CBD contracts are enforced by the City. Because of this close partnership, the City is also more likely to provide support by backing loans or facilitating permit-guarded projects like landscaping public space.

In Oakland, new CBDs are proliferating in part because city and state revenues are at an historic downturn. Neighborhoods are now privately supplementing city services that were once considered baseline. “We are constantly trying to negotiate with the City and determine what is considered baseline,” said Shari Godinez, KONO’s director. “We don’t want to shift the burden off of the City and onto us.”

In this respect, CBDs pose a concern similar to that of the PTA in a public school system. Private money may relieve the budget strain in those areas that can afford to help themselves, but other areas remain subject to a public system that fails to meet baseline needs. For some local residents CBDs are arguably undemocratic and unaccountable to anyone other than the dues-paying property and business owners, yet their purview includes public domain. Some of CBDs harshest critics at the local paper SF Bay View characterized their influence as “the privatization of public space and the elimination of democratic politics from city budgeting and services.”

However, degrees of democratic accountability can be built into the bylaws of CBDs in the form of board and committee membership. According to Godinez, KONO’s volunteer board members are roughly equal parts property owners, business owners and residents. Each of its committees represent about the same distribution.

Godinez says she has learned in her several decades working with merchants associations that “things really only start to happen once the residents are involved. They have the energy and the sense of ownership of the space.”

She considers her role to be to maximize community engagement. She explained that once a CBD is operational, its neighborhood can direct programming as they choose, within the confines of the bylaws.

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KONO funded mural projects as part of graffiti abatement plan

It’s hard to object to a pot of money sourced from business and property owners but invested through a collective and open process. However, the process of forming a CBD is  of course directed by those who can and will pay for it.

According to Aliza Gallo of the Office of Economic Development, City of Oakland, the formation process costs about $5-10,000 up front, which is typically returned to whomever invested that money, once taxes are collected. Of course, if the plan is voted down, that initial cost is sunk.

The process begins with a group of business and property owners drafting a plan and submitting it to an assessment engineer, who assesses the plan’s compliance with the state constitution. A plan that is unconstitutional would be one that creates “special benefits” rather than “general benefits.” The plan that is submitted to the engineer determines: (1) the boundaries of the district, (2) the priority services, (3) the frequency of services, and (4) the term, in years, of the CBD before it goes up for renewal. These stipulations become the skeleton of the CBD’s bylaws, and can’t be revised.

If the engineer approves the plan, a petition goes out to all the potentially-taxed stakeholders, i.e., business and property owners. If the petition is endorsed by 30% of those stakeholders by weight (meaning, rather than one vote per stakeholder, the votes are weighted by proportion of the CBD’s total tax revenue contributed by that stakeholder) then the plan goes to a Prop. 218 ballot vote. Stakeholders have 45 days to return their ballots; if the weighted majority of returned ballots approve the plan, then there is a public hearing before City Council. City Council ultimately has the power to approve the CBD or not.

“I would like to see more support from the City in the formation process and I would like to see by-laws that more strictly promote the interests of residents,” said Godinez.

The City used to be able to loan the formation money to districts. “When funding times were better we sourced those funds from the Redevelopment Agency and from the CDBG [Community Development Block Grant Program],” said Aliza Gallo, Oakland’s Business Development Services Coordinator, “since those funds have been diminishing and of course the Redevelopment Agency was disbanded, we haven’t been able to do that.”

Gallo says she and her team are interested in finding ways to provide stimulus to the neighborhoods that can’t afford to form a CBD — often the very neighborhoods that most urgently stand to benefit from one. “We were able to make a grant for the formation of the Jack London CBD, it was a complicated process but we’re very proud of that,” she said.

Temescal funded this overpass mural

Temescal funded this overpass mural

“Oakland has something like a one billion dollar retail leakage,” said Godinez, meaning we go elsewhere to spend our money. “[CBD-supported] First Friday creates the opposite, a retail surplus, meaning people are coming here to spend their money.”

Godinez, a former small business owner, has been working on local business boosting strategies in Oakland since 1991. When the Oakland Merchants Leadership Forum was disbanded, she helped found Oakland Grown, which promotes the local, independent economy. She said CBDs are crucial tool in promoting Oakland’s independence from big corporations, it’s employment rate and its character. Rather than allowing market forces to invisibly have their way, KONO pays Godinez to “create the dialogue and the meeting place to come together and make decisions at the most local level.”

For a list of CBDs and BIDs in Oakland, click here.

11 Responses

  1. Chuck Johnston

    Isn’t this just another step down the slippery sloap toward “pay to play”? We have already done this with our educational system and now we are doing it again with municipal services.

    It is unethical and (to my mind) unconstitutional to subvert the legally mandated democratic process by handing over public services to these quasi democracies run by those who can pay.

    We cannot allow our public officials (already beholden to lobbyists and special interest groups) to abrogate their legal duties and hand over the direction of public services to those who will pay more to be first in line.

    WAKE UP! We already have the power we need to fire these lazy public officials for not doing their jobs. See you at the voting booth!

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  2. Valerie Winemiller

    Who is Liza Veal, and why does this read like a total PR piece written by those with a financial interest in the formation and running of CBDs or BIDs?

    I agree that we cannot privatize public services, though I believe that local funds have been severely hurt by actions not in the control of local officials–like the last several governors taking more and more local tax money to balance the state budget, and the loss of revenues related to reductions in corporate taxes, commercial property taxes (Prop. 13), and the economic crash.

    One very import thing lost with CBDs and BIDs is transparency and accountability. As imperfect as transparency can be with government, it is even greater with these private structures. There have been questions about the costs and expenditures of some of these in other cities, including San Diego. I can post a link to a story later (I do not have access to it at the moment).

    Piedmont Avenue is thriving *without* one of these organizations. Merchants have voted against forming one several times. Piedmont Ave commercial properties are owned overwhelmingly by 3 individuals, who have not proven themselves to be altruistic visionaries. It would not be beneficial to the businesses to have so much money and control going to them.

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  3. Susan Mernit

    Valerie, Liza is a young reporter working for OL. We don’t think CBDs and BIDS are the answer for everything, and we think there are lots of ways to create and support successful business districts, including merchant associations. But we didn’t think everyone even knew what a CBD is. It would be great to get your insights for more coverage of this area–as in why groups might not want and not feel they needed a CBD (we get that as well.)

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  4. livegreen

    The money is coming from paying members, and goes to infrastructure. Therefor those who appear to be providing a valuable community service that they and we often benefit from.

    To Chuck’s point, the article does mention in a general way that the City is trying to push some basic City Services onto the BID’s. It doesn’t sound like the BIDs are any more happy with that than Chuck or I are.

    The City’s efforts to continue dumbing down basic government services, even in an economic upswing, is irresponsible. Even negligent.

    The increase in the Budget that the Mayor proudly proclaimed last year has gone elsewhere…like vapor.

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  5. Sue

    Just a note, all CBD’s and BIDS fall under the Brown Act. Meaning, all of their meetings are posted 72 hours in advance and are open to the public. Every meeting has minutes dictated and submitted to city records and notifications and also uploaded to their individual website. CBD’s are always encouraging the public to attend meetings, however, despite the perceived public’s passion on the internet, when you actually invite an individual to come to a two hour community development meeting suddenly they just can’t be bothered. So, unless you personally have made a commitment in other ways to community development — I encourage you to take the complaints on here with a grain of salt. If you are that complainer — enough. If your not willing to roll up your sleeves and work for this community then you haven’t earned the right to your complaint. I challenge you to get up from behind your cozy computer screen and get out there and do something. I for one am tired of armchair citizens.

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  6. Art

    Agreed that CBDs and BIDs aren’t for everybody, but in some cases they are an effective solution to address challenges that new business districts face. We live near a BID (LM/Uptown), a CBD (KONO), and the Piedmont Avenue corridor, which as Valerie notes has neither. We’ve been here since before the BID and CBD formed, so I’ve had a chance to see their effects over time. Piedmont has PAMA, PANIL, and many active merchants, who all contribute volunteer resources to making the corridor strong and vibrant; there are also many residents on the adjacent streets who are active and vocal in promoting a safe neighborhood. KONO and Uptown do not have these resources (and do not have as many residents as concentrated near the commercial corridors), and many of the programs I’ve seen the BID and CBD implement have to do with safety (we love the LM/Uptown ambassadors!), cleanliness and beautification (mundane things like litter pickup, but we also often see BID employees planting flowers in tree wells, touching up public art, etc.), and branding/marketing (banners and signal box art in KONO, building awareness that there is a community of businesses there, etc.) These things absolutely occur on Piedmont, too, but there is an infrastructure already in place to make it happen–they don’t need a BID or CBD to get it done. As nascent commercial districts, Uptown and KONO do (or, at least, weren’t successfully getting it done until they created these organizations–so it has been a solution for them). Are there ways to make these kinds of things happen without a CBD or BID? Sure–check out the beautifying/branding that the Adams Point Neighborhood Group has done through their trash can mosaic initiative, for instance, funded largely by KOB grants and donations from local businesses. But are CBDs and BIDs one way to streamline and formalize this kind of work? Absolutely, and for some districts, they are a great tool.

    I share the concerns about the need for transparency in how funds are spent and the slippery slope of the City handing off services that ought to be its responsibility to the CBDs/BIDs, but I also get the clear sense that the businesses in these areas are as concerned about these things as residents are.

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  7. Valerie Winemiller

    It’s not so much that the city is “handing off” its responsibilities, as Art words it. Corporations have fought hard over the years to cut their own taxes, placing a much higher proportion of the burden on us individuals, and leaving a gap we 99% can’t fill. So the city and other levels of government have far fewer resources. With CBDs, property owners (and downtown, that means large corporations) get to pick and choose what previously government-provided services they will fund. Make no mistake: the flower pots and ambassadors are funded by what used to be tax dollars funding city-wide police and public works services. And in struggling districts, it used to be funded also by redevelopment monies, which Gov. Jerry Brown took away to balance the state budget in this era of reduced corporate taxes.

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  8. Valerie Winemiller

    The increase in the Mayor’s budget went primarily to pay for public safety, including funding 3 police academies to train new officers (Oakland hadn’t run an academy for several years), as well as for hiring additional investigators, lab technicians and other support staff.

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  9. Art

    To be clear, CBDs and BIDs are funded through additional assessments above and beyond what the City and County already collect; they are not being given tax money that previously went to the City and deciding how to spend it. (You might argue that this assessment affects the city at large because property owners who are already paying into a CBD or BID will be disinclined to vote for a citywide tax increase to fund similar services, and that might be true–but that’s a separate issue, and not one I’ve seen studied yet–would be interesting to look at.) The Urban Habitat article provides a good overview of some of the reasons to be wary of BIDs, especially around equity issues when there are a few property owners with large interests in the district (and CBDs share many of these problems, though they’re structured a little differently). The debate around the design of public space and who is served by it rages whether it’s the City or a BID paying for design and improvements. However, redirecting tax revenue from the city at large is not one of these concerns. (That was roughly how redevelopment agencies were set up, but those were a very, very different animal.) What I meant by “handing off” services is simply that there’s a danger that a city may be inclined to, say, send garbage collectors less frequently to collect trash in a CBD or BID if they think the merchant organization will pick up the slack, or a police department may send patrols less frequently if they know there are also private security officers in the area. That’s not how these assessment districts are intended to work, though–the activities funded by the tax should be supplementing the government-provided basic services and infrastructure that are provided to all city neighborhoods, not replacing them or taking over their management. BIDs and CBDs aren’t a panacea for commercial districts–they’re just one of many tools out there, and clearly one that is not well understood.

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  10. Victoria

    Lucas,

    That article you linked too isn’t entirely accurate:

    1. ” if they are organized and in agreement, (BIDS) can raise taxes on all other property owners in a district”.
    FALSE: BIDS in Oakland can only raise assessments by 5% each year, and most BIDS do not choose to invoke that privilege because the BID is up for renewal every 10 years. Meaning if the rates increase too much, property owners would not renew bids.

    2. “which have state-like powers in policing, sanitation, redevelopment, and taxation matters,”
    HAHAHAH,Woo. This one made me laugh. Come to a KONO meeting — we only have a $200,000 yearly budget. Our ‘state-like powers’ consist of trying to figure out if we should power wash the sidewalk or commission a new mural.We can only choose one though — small budget.

    3. “But as corporate real estate firms stake a claim to the maintenance and administration of public space in Downtown Oakland, the area is being reshaped in accordance with the model for a controlled and commodified space exemplified by the post-war suburban shopping mall”
    FALSE: A) where is a shopping mall going to fit in Oakland any of these BIDS? B) KONO strives to focus on Mom and Pop small businesses. So much so they commissioned a 5 month economic study to advocate for saving Oakland First Friday. The study showed that small business overwhelmingly benefited from the event. KONO also lobbied the city needed to save the event because it served as a gateway for new small business creation. The event was on the verge of being closed down by the city prior. (Source: Me, I wrote the report)

    4. “Oakland’s BIDs had pressured City Hall to remove the encampment. In a letter addressed to Mayor Jean Quan, the BID directors—essentially Oakland’s largest corporate real estate owners—demanded that the city remove any and all signs of protest from the downtown area, saying: “The protest has been allowed to run its course. Now it’s time to focus on jobs and the economic restoration of our city.” Ironically, the BIDs identified Frank Ogawa Plaza as a “public space,” to be “enjoyed by all the people of Oakland, not just a minority who have now had their moment and headlines.””

    EVERYONE in the downtown area called the Mayor during that time. I worked for a non-profit organization on 17th and Telegraph during the time and one of our interns was attacked, beaten, and robbed by a few guys that had been camping on the plaza. We immediately shut down the office and my Directors started an AGGRESSIVE communications campaign demanding the Mayor address safety issue. Small business owners on the plaza lost a lot of money during that time and one woman was being harassed for free food by the protestors. She was afraid to tell them no out of retaliation. It wasn’t just BIDS that wanted them gone.

    5. “BIDs actively lobby elected officials and civil servants, influence how city general funds are spent, shape police policy and practices, and pressure elected officials on a variety of controversial issues”.
    Yes, and so does every other civic org, 501c4, and corporation — whats your point?

    6. “BIDs attempt to create a cityscape conducive to commerce, and by claiming “curb to property line” space, attempt to instill an atmosphere of publicly accessible private space,”
    BIDS do not enforce this — its a city zoning code, the city enforces it. As a matter of fact BIDS push the city to adjust those outdated and often tiresome codes to encourage property owners to take ownership of beautification projects.

    7. “In an apparent emulation of Disneyland, friendly-looking, smartly dressed “ambassadors” in navy blue or bright orange uniforms patrol the sidewalks, ready to direct tourists and enforce district rules.”
    ….And who also attend 2 hour community safety meetings with OPD, work on community action plans to address chronic issues like blatant drug use on the street, report crimes and car break-ins, PREVENT crimes and car break-ins, attend court when needed, connect homeless individuals to social service assistance, and a host of other services — but sure, I guess if that is how you define Disneyland security, yes, you can say they are just like Disneyland……

    Anyway, I could go on but I’m out of time. My point, your link isn’t accurate, but it did give me a good belly laugh! So thanks for that! :)

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