Downtown Silver Spring Property Owners Exploring Potential ‘Business Improvement District’

Group wants to redirect county funds to a public-private partnership to better market the downtown area


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A child plays in a fountain in downtown Silver Spring

Bethesda Beat file photo (Andrew Metcalf)

A group of property and business owners is conducting a petition drive calling for the formation of a business improvement district in downtown Silver Spring that could take over Montgomery County government responsibilities such as marketing and keeping the urban area clean.

Steve Silverman, CEO of the local lobbying firm SSGovRelations LLC, said Monday he is working with Silver Spring property owners including Washington Property Co., Foulger-Pratt, Brookfield Properties, Brandywine Realty Trust and Peterson Cos. as well as small business owners to obtain the support needed to create a business improvement district (BID).

In the county, the district’s creation must be supported by 51 percent of commercial and residential property owners as well as by owners of 51 percent of the assessed value of properties in a defined business area, according to state law. In this case, the area would be the central business district defined by the county that surrounds the Silver Spring Metro station.

Silverman, a former County Council member and former director of the county’s economic development department, said if the owners can achieve the required levels of support, they’ll ask the council and county executive to approve formation of the BID. He said the group is close to garnering the support needed, but needs to reach out to more business and property owners before the plan can advance.

The property owners want to increase the promotion and marketing of downtown Silver Spring and believe the BID could do that better than the current urban district model that’s funded by the county government, according to Silverman.

Silver Spring blog Source of the Spring first reported initial details about the BID proposal.

Silverman said the BID could be funded by the $3.5 million the county currently spends on its Silver Spring Urban District each year and the BID’s operations would be overseen by a board of directors. He described the model as a public-private partnership similar to the Montgomery County Economic Development Corp., a nonprofit funded by the county to attract and retain businesses.

The urban district is largely funded by revenues the county receives from downtown Silver Spring’s parking garages. It uses the funds to employ staff members known as “redshirts” who maintain public amenities, patrol parking garages and public areas, improve streetscaping and answer people’s questions about the downtown area.

The urban district also plans and puts on events such as the Silver Spring Jazz Festival in the fall, the Montgomery County Thanksgiving Parade and a summer concert series, but does not spend funds on marketing for the area.

Reemberto Rodriguez, who oversees the urban district for the county as director of the Silver Spring Regional Center, said he believes it’s unusual for a BID to be created in area that already has local improvement operations.

“Business improvement districts have been part of the urban landscape for a few decades now and they have shown to be most successful in areas where there was little economic activity or no other improvement entity in place,” Rodriguez said. “Silver Spring’s situation is different and therefore more challenging for the conversation about whether to evolve it to a business improvement district or not.”

Silverman said a key component to the BID proposal is that no new taxes would be placed on property owners to fund the district. This model would differ from many BIDs that already exist around the country. In many cases, the BIDs are funded through a special tax applied only on properties or businesses within the district.

In Washington, D.C., BIDs are financed by a self-imposed tax on the businesses within the community through a surcharge on their property taxes, according to the D.C. Department of Small and Local Business Development. If residents opt to also be taxed, the BID is called a “community improvement district.” The Silver Spring urban district does receive about $800,000 each year from a commercial property tax on buildings in the district, but about $2 million each year is from parking district funds. The urban district spends about $2.4 million each year on personnel costs.

Silverman said property owners promoting the Silver Spring BID won’t support paying additional taxes.

“That’s the line in the sand the property owners are drawing,” Silverman said. “If the county isn’t interested in continuing its support financially, then there won’t be a business improvement district.”

However, some members of the downtown community are concerned that the creation of a BID would transfer power and resources from the county government to wealthy property owners.

“The devil’s in the details,” Karen Roper, a community activist and land use chair for the East Silver Spring Citizens’ Association, said Wednesday. She added that the BID proposal “would be the biggest transference from the working class to the 1 percent that I’ve seen in Maryland for a long time.”

She pointed to a website set up by proponents of the BID that includes a proposal on how voting would be conducted for the BID’s board of directors. It calls for allowing property owners and commercial tenants to vote for board members, but provides tenants with one vote and property owners with one vote per “$500 of BID tax.” The proposal later defines BID tax as the same rate of the current urban district tax levied on commercial properties in downtown Silver Spring, which is $0.024 per $100 of assessed value. This could potentially provide high-value property owners with a larger proportion of the votes needed to choose board members.

The proposal also lists the potential makeup of the board to include six representatives of large property owners or developers and three Silver Spring small business owners.

Charlie Nulsen, the president of Washington Property Co., which is developing sites in the downtown’s Ripley District into high-rise residential buildings and was listed as a potential board member, said he believed the BID would be more effective at representing the area than the county government agency.

“The BID board, if it were to come together, would consist of property owners and business owners including small business owners and minority business owners,” Nulsen said. “It will be a board that really reflects the business activity in the central business district of Silver Spring.”

He added the BID would be responsible for handling the “clean and safe aspects of managing an urban environment”—one of the main roles of the redshirts. And he said it could significantly improve marketing efforts for the area.

“I would say the county has done an OK job on the clean and safe aspects, but when it comes to marketing budgets, it usually hasn’t grasped the right approach,” Nulsen said. “It’s not competitive with other central business districts in other jurisdictions.”

Silverman said that with the impending exit of Discovery Inc. and its 1,300 full-time employees from downtown Silver Spring, the area must be marketed better to attract new businesses.

“This is an extension of the county’s economic development efforts,” Silverman said. “The challenge is getting that message out.”

County Council member Tom Hucker, whose district includes downtown Silver Spring, said earlier this week he has not yet developed a position on whether a BID could benefit the area. But he added it’s “hard to argue with the idea of marketing Silver Spring more.”

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