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Business owners unsure about city's plans for Business Improvement District
"Stan Parente suspects it will take sales skills that rival those of millionaire Veg-O-Matic king Ron Popeil to convince small-business owners in Federal Way to form a Business Improvement District downtown. Parente, who owns Salon Parente at Gateway Center, said he believes the Federal Way Chamber of Commerce will have a hard time persuading enough downtown business owners to form a district. To gain the proposed BID, property owners representing at least 50 percent of the calculated value of any designated area would have to support the formation by voicing that support in front of the City Council during a public hearing.You'd have to have a good sales technique to get 50 percent, he said. If they had some rock solid evidence of other cities or other communities, I would think that would be pretty handy for them. I think if they didn't have that, they'd be in pretty rough shape.Beginning in February or March, the chamber will start delivering its sales pitch, as chamber officials meet with business and property owners to let them know the city's goal of forming a BID, said chamber CEO Delores Shull. There's really no way we can have a successful revitalization program that will achieve its potential unless we have the involvement of business and property owners, Shull said. They're kind of stakeholders of the entire process.Last month, the Federal Way City Council approved spending $18,000 in 2001 toward forming a BID, mostly for the chamber's marketing services. Business owners responsible for at least 60 percent of the calculated value of a proposed district area can petition the city to form a BID or the City Council can pass a resolution to do so. The petition or resolution specifies the boundaries, the uses of the money and the amount of the assessment to be levied. It's comparable to a Local Improvement District in which neighbors vote to contribute a share of money to a project like installing a new sewer line or building a new road that would improve the quality of life for everyone. The main difference is a BID would be ongoing whereas people stop contributing toward a LID after they have contributed their portion of the project's cost.Businesses that receive the most benefit from the existence of a BID would pay more money toward its operations. Factors taken into consideration would include the square footage of a business, the business and occupation taxes the business already pays, the number of employees and gross sales.Business owners responsible for more than 50 percent of the assessments in a proposed district would have to support it in order for it to become reality. That bothers people like Chris Leavitt, who owns Chris Leavitt Photography, and Chad Hiatt, who manages the Active Computer store. Leavitt said the chamber has made good decisions in the past and he will keep an open mind. But his initial reaction is a thumbs-down. I can't bring anything to mind that would be worth something to me and something to my neighbors across the street at the same time, Leavitt said.Hiatt said he objects to 51 percent of business owners determining the other 49 percent must pay an assessment. That, he said, sounds like outright theft. As long as it is voluntary participation, I have no problem with that and would support it, Hiatt said. It should never be something where someone is capable or has the power to come into my business and tell us to give them money for my own good.Every business owner within the proposed boundaries of a BID can voice support or objection at a public hearing in front of a city council required by state statute. If business owners representing more than 50 percent of the calculated value protest, the city can change the boundaries and hold another hearing. The city believes the formation of a BID represents its best hope of creating a downtown that will draw tourists and residents alike. Maryland-based consulting firm Hunter Interests Inc. recommended the city form a BID. The city hired Hunter Interests in March to study the pros and cons of constructing a convention center, performing arts center or other types of public facility in the downtown. The city spent $37,500 in lodging tax revenue for the plans, which were released in August. It probably will be the most lasting and important element of the tourism program downtown, in terms of long-term benefits, said Iwen Wang, the city's Management Services director, of a BID. That's why the success of this first model BID will be so critical. When a BID is created, cities have the sole authority to determine how the money is used. However, they can appoint a stakeholder group to offer recommendations. The cities collect the annual assessments, which will be used for such things as maintenance, security and advertising.Businesses that open within the district after it is formed are exempt from paying the assessment for up to one year, according to state statute.The city wants its BID to include the entire city core, bordered roughly by South 316th Street to the north, Pacific Highway South to the west, South 324th Street to the south and Interstate 5 to the east. But the city might pursue a smaller BID in order to ensure the minimum 51 percent support, Wang said.It's flexible, she said. The reason is we want to build something that will work and be successful. That's the key goal. If there's a lot of reluctance, we might draw a different line, do a smaller project. "