Photo Credit: Dave Zylstra
Downtown BID #21's public service ambassadors are just one of the many programs that business improvement districts are responsible for in Milwaukee.
In January, the Milwaukee Public Market announced that 2017 was another record-breaking year. Total vendor sales increased by 5% to $16,533,534. Customer visits increased 6% to 1,634,534. The market, which is owned and operated by the Historic Third Ward Business Improvement District (BID)—the oldest active BID in the city—stands out as one of the crowning achievements of such entities in Milwaukee, generating revenue and drawing visitors to the district.
When Wisconsin first passed legislation enabling the creation of BIDs in 1984, the concept almost immediately took off. Since then, Wisconsin—and especially the City of Milwaukee, which has 32 active BIDs and eight of the similar Neighborhood Improvement Districts—has become a sort of poster child for BIDs in the U.S.
According to data compiled by the Wisconsin Policy Forum, Wisconsin ranks third in the number of BIDs (behind only California and New York); Milwaukee is currently tied for third (with Los Angeles) for the sheer number of city-based BIDs—behind New York City and Chicago. But, per capita, Milwaukee is the clear BID capital of the nation with 6.5 BIDs for every 100,000 people (the next closest city is Minneapolis with 3.2).
What Exactly Does a BID Do?
While Milwaukee has more BIDs per capita than any other city in the nation, there remains confusion about what exactly a BID does, even though most people are likely affected by their services on a daily basis. “Business improvement districts are organizations that allow neighborhoods to basically assess (tax) themselves in order to provide services and activities in their neighborhood above and beyond what the city delivers,” said Ken Little, who manages Milwaukee’s Department of City Development Commercial Corridor Team, which oversees all BIDs. “Typically what they do is help market their neighborhood, help provide additional security services beyond what police might do—including security cameras—and help with beautification of the neighborhood.”
The state law for BIDs is relatively vague and open for interpretation. BID directors and their boards have used this to their advantage to provide programs and initiatives tailor-made for their stakeholders. “Look at the state law, and you can do this today; it doesn’t tell you what you can and can’t do with a BID,” said Jim Plaisted, executive director of the Historic Third Ward Association and former executive director of the East Side, Shorewood and Wauwatosa BIDs. “All it tells you is how you are structured, how you interact with the municipality, and that’s it. So, for any sized business district that can get the buy in, they can take care of whatever they want to take care of.”
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BIDs have taken up initiatives as small-scale as graffiti removal, sidewalk cleaning and trash pickup, all the way up to large-scale event planning, creating streetscapes and helping attract outside investment. “All business improvement districts are not created equal,” Little said. “Some do more than others, but at the end of the day, it’s all about improving their neighborhood and coming up with things from the property owners in the neighborhood that will make things better.”
As business owners hone in on their day-to-day operations, it can prove difficult to worry about the overall viability of the neighborhood they are doing business in. “[BIDs] have really allowed the business owners to work with one another, learn what’s happening and successful, voice support for some ideas and voice concern if they’re not happy with a program or an issue,” said Carolyn Esswein, a professor of urban planning at UW-Milwaukee and director of Community Design Solutions. “It’s allowed them to work together as a group.”
While BIDs have been embraced across North America—with more than 1,500 across the continent according to the International Downtown Association—certain factors specific to Milwaukee have made it easier for BIDs to thrive here.
Why Does Milwaukee Have So Many?
Civic pride and a local-first ethos are as visible as ever in Milwaukee these days, and they run deeper than the city level. Neighborhood pride also seems to be at an all-time high. While this may seem like a new phenomenon, BIDs have embraced the neighborhood-first ideal since their inception, which has combined with Milwaukee’s blue-collar roots and municipal funding limits to drive the amount of BIDs in the city.
“I think Milwaukee is a city of neighborhoods when it all comes down to it,” said Damon Dorsey, executive director of the North Avenue Gateway BID. “These neighborhoods were created from the industrial past, and you had commercial corridors that sprouted up to serve these neighborhoods.” This industrial past also produced a do-it-yourself culture that lends itself well to not just local, but neighborhood, control of resources, according to Beth Weirick, executive director of the Downtown Milwaukee BID. “Milwaukeeans are involved people just by our nature,” she said. “We’re people who burrow down and get involved and take ownership. We take responsibility for our communities, and if we see a problem we find solutions. I think it’s one of the things that I love most about our community culture.”
And with shrinking city budgets, BIDs are one way for property owners to take their neighborhoods into their own hands. “This is no criticism to any city government, but let’s face it, their funds are drying up,” said Plaisted. “So, when you go to the city as a community and say, ‘We want X,’ they have to say—depending on the size and scope of the project—‘We can’t afford that right now.’ BIDs are stepping into that vacuum. The city can only provide so much service. If a commercial district really wants a clean, safe, beautiful district, the city can’t do it anymore.” But changes in the state budget will make it harder for BIDs to provide these services as well.
Law Changes Limit BID Funding
Tucked into the most recent state budget was a provision that, for some BIDs, severely cuts back on their funding sources. Until recently, mixed-use developments were fully assessed as commercial property by BIDs. Residential developers, likely looking out for their bottom lines, decided to take action. “Some of our residential developers approached the state, and instead of having a public hearing process around it, they hired a lobbyist to lobby to change the BID legislation,” said Weirick.
As a result of this lobbying effort, Sen. Alberta Darling and Rep. John Nygren offered Budget Motion 418. Point eight of the motion reads, “if a first class city (Milwaukee) specially assesses a mixed-use property located in a business improvement district (BID), that is real property and is partly tax-exempt or residential, or both, the special assessment may be imposed only on the percentage of the real property that is not tax-exempt or residential.”
According to Weirick, some commercial property owners who do pay BID assessments have argued that developers are marketing their rental properties by talking about work that the BIDs are doing in regards to events, safety and cleanliness, but are refusing to help pay for it. “Those residential developers benefit significantly from the investment our commercial property owners are making in those neighborhoods,” she added.
While this just recently became law, the fight is not new. “This is three years old,” said Plaisted. “Several Downtown property development companies petitioned [Wisconsin State Senator] Duey Stroebel to introduce legislation similar to what got passed.” Plaisted said that the BID community was successful in stopping the legislation three years ago because it was going to go statewide. He believes that part of the reason that the law change passed this time was because it only applies to Milwaukee.
An Underhanded Undermining of BIDs?
“In classic, current, upstate Republican politics, and kicking Milwaukee to the curb, suddenly we get word about two weeks before the state budget is to be approved that it was inserted into the budget as a line item,” Plaisted said. “It was not its own piece of legislation …There was a hearing on the budget, and this got talked about for about 10 minutes … Of Walker’s 99 vetoes, this wasn’t one of them. It was undemocratic the way it ended up happening, but the real kick in the teeth was that the state legislation said only ‘First Class’ cities [Milwaukee is Wisconsin’s only “First Class” city]. So now, there’s no pushback from the upstate Republicans whose Main Street BID boards all said, ‘Don’t do this’ three years ago. It was just really underhanded the way that they did it.”
Plaisted expects a “double digit percentage” effect on the Third Ward BID’s assessable property base. Steph Salvia, executive director of the Brady St. BID, said that 25% of their budget would have been lost had they not raised their assessment rate, and Little, the city’s Commercial Corridor Team Manager, said that Kinnickinnic Avenue lost about 20%.
While the immediate hit to the budgets are top of mind now, Plaisted is also worried about the precedent this sets. “So now, we have carved out the residential commercial activity,” he said. “What’s next? Are we going to have offices coming to us and saying, ‘We don’t get anything from a BID?’ Now we’re going to take offices out because they’re another component of the commercial code? It’s nonsense. The fact is that these are some of the most successful property developers in the region that asked for this. Did they have a legitimate beef about the size of their assessment in Downtown and the Third Ward? Sure. This wasn’t the way to go about it.”
