Business districts look to increase commerce

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As city services across the board are reduced due to budget cuts, some business areas in Berkeley have turned to business improvement districts for additional funding to maintain a desirable level of aesthetic appeal and commercial interest.

There are currently four active business improvement districts in the city - the North Shattuck property-based Business Improvement District, the Telegraph Business Improvement District, the Downtown Berkeley Business Improvement District and the Solano Avenue Business Improvement District - that function to increase business visibility and traffic flow in commercial areas by cleaning sidewalks, removing graffiti and marketing and advertising the district's businesses.

Funding for these services in a property-based BID comes from an additional tax based on the square footage of a commercial space that is levied on businesses who are members of the BID. For the Telegraph Business Improvement District, taxes are collected twice a year and paid to Alameda County, which then forwards the city and special BID their respective shares. Other BIDs that are not property-based pay an assessment fee based on criteria such as the number of employees or type of business.

Still, the districts' purpose is not to substitute for the city services that are disappearing, said Michael Caplan, the city's economic development manager.

"Overall, the city has probably maintained a fairly stable level of services," he said. "But the city doesn't necessarily do the kind of stuff that BIDs do - BIDs go beyond baseline services. We look at them as sort of a partner, not as a replacement."

Roland Peterson, executive director of the Telegraph Business Improvement District, said he has seen a direct cause-and-effect relationship between street aesthetics and atmosphere and a more prosperous commercial atmosphere on Telegraph Avenue.

He said that over the years, he has heard prospective tenants decide against opening in the area because of the "crazy behavior on the street."

Peterson said every time that type of undesirable behavior is reduced as a result of services funded by the BID, he considers their work a success.

At the other end of the city, merchants on Solano Avenue have felt that the direct benefits of the area's BID services were not visible nor beneficial enough, and voted to figuratively dissolve the BID in 2007, according to Allen Cain, the association's executive director and events manager.

The Solano Avenue BID still exists, but its assessment fee was eliminated. Cain said the association in general could have done a better job informing merchants about the purpose of funds collected through the BID.

Unlike areas like North Shattuck, which has high visibility thanks to the Gourmet Ghetto, it is very difficult to advertise for businesses on Solano because of the diversity of product and service offerings there.

Though BIDs may improve an area's business prosperity, Cain said filling empty storefronts will be more effective in fighting the recession. Advertising and marketing through BID funding draws people to the area, he said, but the overall economic climate will only really improve when new businesses start to fill some of the 60,000 square feet of empty commercial space on Solano.

But business improvement districts are vital to the city and continue to provide services to commercial areas that benefit both business owners and consumers, Peterson said.

"My feeling is that our presence has arrested a significant decline - if we weren't here, there would be vacancies all over the place," he said of the Telegraph Area BID. "It would be very off-putting to be coming down the street. You would just have almost a ghost town. ... It wouldn't happen immediately, but it would over time."


Jessica Gillotte is the lead business reporter.

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