Transportation Policy Academy 2016—Panel Discussion & Tour on Transit-Oriented Development and Building Communities

The 6th Annual CSG Transportation Leaders Policy Academy in Washington, D.C. wrapped up on May 20 with a panel discussion on transit-oriented development and building communities. Panelists included Marco Li Mandri, the President of California-based New City America, a company that works on business district revitalization efforts around the country; Angela Fox, the president and CEO of the Crystal City, Virginia Business Improvement District; and Michael Stevens, president of the Capitol Riverfront Business Improvement District in Washington, which was the home base for this year’s policy academy. They discussed the evolving responsibilities of state legislation-enabled business improvement districts in managing neighborhoods around transit hubs and the roles played by retail, restaurants, residential, office space, parks, sports facilities and transit in ensuring their success. This page includes extended excerpts of their remarks from the panel discussion, links to PowerPoint presentations and related reading and photos from both the panel and a subsequent tour of the Capitol Riverfront BID.

Marco Li Mandri, New City America

Marco Li Mandri is the president of New City America, a business that assists communities in the formation and management of business and community benefit assessment districts. He has been involved in business district revitalization efforts since 1988. A former president of a business improvement district, or BID, he entered the BID arena first as a stakeholder and later as a professional consultant. In 1992, Li Mandri formed the Marco Group, a business dedicated to the formation and administration of BIDs in Southern California. In 1997, the Marco Group evolved into New City America, Inc. Li Mandri has assisted in writing local legislation to accommodate special needs of property-based maintenance districts and has authored the California State ordinance allowing greater flexibility in establishing property assessment districts that has been adopted by several California cities.

On why state legislation allowing for the establishment of business improvement districts needs to evolve to encompass the full scope of the work being done by place management organizations and the people who benefit from them…

“In the 90s and the first part of the 21st Century, the impetus for redevelopment of our urban core areas or downtowns was market rate residential. People weren’t building class A office buildings. They’re really not doing that by-and-large nationwide unless you’re in Boston, south of Market in San Francisco and to a certain extent in Los Angeles. D.C. is a different animal completely. But if you look at the highest buildings going up in New York City right now, they’re not class A office spaces—outside of the World Trade Center—they’re residential. So if you see that that trend is occurring in our downtowns, … do residents really want to pay into something called a business improvement district? So the title of the legislation doesn’t fit what’s going on. So the term community benefit district seems far more user friendly.  …What I’ve learned—and I’ve formed 77 of these districts and it will probably be 80 or 85 by the end of this year—the legislation is key and there are a lot of states that have really poor legislation. So it’s very important from the outset that you have good legislation.”

On how S. 2065, a bill introduced in the Massachusetts Legislature, could lead the way in redefining BIDs…

“We’re doing this in Massachusetts right now. … Massachusetts has a business improvement district law that’s been on the books for 20 years. They have five districts in the state after 20 years. New York City alone has about 70 in Manhattan and it’s because the New York State law says that a business improvement district is formed if you do A, B, C, D and E. Well, there is a handful of BIDs all throughout the state. But there is also a provision that says ‘unless you’re a city of over a million people’ then you can basically do what you want. So how many cities in New York State are over a million people? One. So New York City has a large amount of business improvement districts because it’s easier for them to set up. So the first thing I’ve learned is that they should be easy to set up and easy to take apart.”

“Some of the thresholds that exist for the establishment of business improvement districts and community benefit districts are absurd. You need to get 65 percent of the property owners by what’s called weight and 60 percent of the parcel owners to sign a petition. You don’t have to do that to increase any tax, anywhere. But you have to do that for business improvement districts, which means that people aren’t going to do it because it’s too high of a threshold to meet.”

“They have to also include all land uses. And California is unique in many ways but one thing in the California state constitution—we’ve all heard about (1978’s) Prop. 13? It was written by (the late businessman/lobbyist/politician Howard) Jarvis’ people. The Jarvis people also wrote what’s called Prop. 218 (1996). Prop. 218 says that if you’re going to have a property assessment district, it doesn’t matter who you are, you pay. City governments, school districts, county governments, churches, tax exempt—all have to pay. It’s a very, very rational system because you go into most of our cities, who owns most of the land in our inner city? The city government. In California, usually 10 to 15 percent of the assessments are paid by the city government. Some people might say that’s not great because the city can’t afford it. Well, the city is now paying 15 percent and leveraging 85 percent that it wasn’t getting previously because the cities can’t keep up with what’s going on with the increased density within our downtowns.”

Why BIDs shouldn’t have a term that expires…

“I also believe in this experience you should not have a term. Your downtown’s not going to go away. So will the special needs that your district has also go away? In the district that I manage—the Little Italy district (in San Diego)—we have no term. None of the districts in New York City have any term. They exist in perpetuity. And in Massachusetts our new legislation will say there’s no term. These things have to go beyond us. And this whole idea of renewing a district every five or seven years is like running for Congress, which is absolutely absurd. If the property owners like it, keep it in. If they don’t, they should have a mechanism for taking it out. But otherwise it should be in.”

On tax structures and financing BIDs…

“And then how do you finance your efforts? Well in my experience the assessments are kind of like the fuel and the district management corporation is the 501(c)(3). I’d say form a 501(c)(3), don’t form a 501(c)(6). 501(c)(6)’s are usually chambers that can advocate and lobby but a 501(c)(3) is a public benefit corporation. You get a charitable write-off if you get a foundation to give you money. Foundations will not give money to a 501(c)(6).”

On why traditional retail isn’t typically a big part of development in modern transit-oriented developments…

“New City America manages four districts in the state of California. If you want to talk about a transit-oriented district on steroids, you look at (San Diego’s) Little Italy. …When we talk about bringing people back to downtown in the old days … and the shopping. Get over that because we have 24 feet per capita of retail space and when Amazon gets done with everything, it’s probably going to be at what Canada’s level is. Amazon is radically altering retail. So don’t think that your downtowns and your transit-oriented developments are going to come back and there are going to be new department stores. Macy’s is toast. JC Penney’s and Sears are going to be gone within two years. Wal-Mart’s having problems. So Amazon is flipping everything on its head. … Don’t think (that in) your downtowns your success is going to be purely retail. It’s really going to be mixed use. It’s going to be residential, cultural, as well as retail.”

On why public spaces and the activation of them are important to the success of transit-oriented developments…

“When you rebuild your downtown on a transit-oriented basis, having public spaces is critical. Because people are now (living more densely). They gave up their backyards. They gave up their closets. They need outdoor spaces. So not only creating the public spaces but managing the public spaces and activating them is key. And the most successful places really in the country are the ones that have great public spaces and great public spaces that are managed well.”

Angela Fox, Crystal City Business Improvement District

Angela Fox was hired as the first president and CEO of the Crystal City, Virginia Business Improvement District, or BID, in 2006. Under her tenure, the BID has grown in size and scope and become a pioneer in the place management industry. She previously served as executive director and CEO for Cultural Tourism D.C. She also ran her own consulting firm, providing business strategy, marketing and executive coaching services to individuals, corporations and non-profits. In addition, she was vice president for product, and then strategic development, at Simplexity and began her career in the executive development program at Bell Atlantic (now Verizon).

On how the Crystal City BID is structured…

“We’re a small team. We’re a 501(c)(6). I actually don’t really have an issue being a 501(c)6. I like the fact that we don’t have to fundraise at all. … But our (annual) budget is about $2.5 million.”

On Crystal City’s present and its past…

“We have more than 8,000 residential units in Crystal City, more than 11,000 people who actually live there. Lots of businesses, 30,000 office workers at peak. One of the reasons the business improvement district was formed in Crystal City is because of something called BRAC—Base Realignment and Closure, which basically said because of 9/11, there was a whole new set of rules around how you could do Defense Department consultants and contractors so that we stood to lose about 17,000 of our 30,000 jobs (Crystal City is just over a mile from The Pentagon). We hit the peak of that a couple years ago and we’re now ticking down at the vacancy rate so we’re about 90 percent occupied. But we were at 25 percent vacancy for a while. … Most communities would absolutely die under a stress level of that sort. And Crystal City because of (proximity to National) Airport and the infrastructure and the other things that we sort of have repositioned … we’re bouncing back.”

On why focusing on process is an important part of what BIDs do…

“In addition to all the programming and re-marketing and transformational efforts that we’ve done in Crystal City, we’re also very focused on process. I spend most of my time working with politicians, county staff to really sort of re-orient process and not just on the innovation side. I know that that’s a big topic these days. What does government do to regulate the kinds of innovation that’s coming at the speed that it’s coming versus killing small tech companies just because of new innovative ideas that there is no regulatory response to. But how we deal with things like signage and getting people around, wayfinding, recruiting businesses or retaining (them) even.”

Michael Stevens, Capitol Riverfront Business Improvement District

Michael Stevens is the president of the Capitol Riverfront Business Improvement District, an organization he founded in 2006. The Capitol Riverfront BID provides a range of services on behalf of its stakeholders, including business and retail attraction efforts, strategic planning, transportation planning, management and maintenance of parks, and community building. Stevens has been involved in the economic development, urban planning and downtown/neighborhood development fields for the majority of his 35-year career. He has participated in numerous downtown redevelopment efforts for cities around the country. He served as director of planning for his hometown of Jackson, Mississippi, and as the vice president of development for the Center City Commission in Memphis, Tennessee. Prior to his work at the BID, Stevens served as the president & CEO of the Washington, D.C. Economic Partnership from 2000 to 2006.

On the history of the Capitol Riverfront and Navy Yard…

“It has been a transformative experience (over) the past 16 years. I give a lot of credit for that to Mayor (Anthony) Williams, who was our mayor from 1999 to 2007 (and) who set a vision, restored fiscal responsibility as well as political responsibility and the investment level in the city has been incredible and as a result of that we’re seeing these new growth areas like the Capitol Riverfront. So welcome to our neighborhood by the river, which really was for 90 years the light industrial and light manufacturing backyard of the city anchored by the historic Navy Yard, which made ships from 1799 until current days. They don’t really make them here anymore. They make systems for nuclear submarines and nuclear aircraft carriers. But we were known not only as the light industrial and light manufacturing backyard but the tenderloin district for Washington, D.C., with a series of dance clubs and strip clubs as well as one of the worst public housing complexes called Arthur Capper Carrollsburg. So it wasn’t the area as a tourist you came to unless you wanted drugs, prostitution or to get your car worked on or to go dancing in one of the clubs. So we were a slate for transformation, if you will.”

On how city officials were able to turn the neighborhood around and how change took shape…

“We have been shaped by big thinking, vision, political realities and political will … and a lot of public investment. … Angie mentioned [Base Realignment and Closure]. Well that brought 7,000 to 8,000 people from her neighborhood to ours, to the Navy Yard. NAVSEA (Naval Sea Systems Command) was relocated, doubled our office population at the Navy Yard and stimulated the first new office development for Defense contractors. Then we saw the (Anacostia Waterfront Initiative) Framework Plan (in 2003), which was Mayor Williams’ vision that the (Anacostia) River should be engaged, embraced, celebrated and cleaned up and become this new recreational amenity. (The U.S. Department of Transportation) moved to our neighborhood. We got a Hope VI (grant from the U.S. Department of Housing and Urban Development) for the Arthur Capper Carrollsburg (housing) complex. Forest City Washington was selected to redevelop federal lands called the Southeast Federal Center. And when they were willing to bet the farm on our neighborhood, other developers took note. We were selected as the site for the (Nationals) baseball stadium. It opened in 2008. Our (business improvement district) was approved in 2007.”

On the importance of parks to the neighborhood’s revitalization…

“We talk about parks and what they mean and how BIDs are place managers. (The area’s nine) parks did more to create community, a sense of identity and pride and gathering places than anything we could have done from any other investment standpoint. So (they are) a key part of our civic infrastructure.”

On the role of retail in reshaping the neighborhood…

“And then we started seeing neighborhood retail come. A Harris Teeter Grocery—50,000 square feet. A 28,000 square foot VIDA health club. And now a Whole Foods is under construction just north of us—35,000 square feet.”

On the office market in the neighborhood…

“Now we’re starting to see the office market get traction. … The office market went stagnant after the recession. We’re experiencing compression, less square footage per employer. The federal government started leading that through (the General Services Administration). Now law firms and non-profits are following suit. So our market went flat and we were having a hard time bringing people (in). But now the National Association of Broadcasters is coming. D.C. Water is going to build a new administrative headquarters.”

On the residential market…

“We have 10 residential buildings under construction. Like (Crystal City), we’re a live/work/play (and stay) neighborhood. We’re only five blocks south of the (D.C.) Convention Center so our hotel market is starting to become very robust. We have 5,000 residents right now, 34,000 employees, and these nine acres of parks that anchor our community and one ballpark. Now, a soccer stadium is coming as well. … The rebuild of the Arthur Capper Carrollsburg housing project – 707 units torn down—affordable units—replaced one-to-one and the addition of 1,100 new market rate units. So a densification of a public housing site but on a much more humane scale … blended income, aspirational neighborhood than what (the old project) was, which literally was warehousing of the poor. When (the old project) was demolished, our crime stats dropped dramatically. Many of the residents are coming back already and it’s a big success. …(It’s a) blended-income neighborhood (with) a lot of affordability due to the amount of public incentives. The District (of Columbia) government requires 20 percent affordability in some projects. The Arthur Capper was a one-to-one replacement of those publicly subsidized units. And then we have inclusionary zoning, which was passed by the city that requires affordable housing if you’re within a quarter mile of a Metro station and it’s based on how big your project will be but they have to provide affordable units, which I think is a good thing.”

On the role of the business improvement district…

“When the board authorized (the Capitol Riverfront BID)—and we’re authorized in five-year increments (and) I’d like to get rid of that and just go on in perpetuity so to speak—my three charges were … create a baseline of ‘clean and safe’ because there was none, do economic development—fill the office buildings, bring retail, bring residents, but also help people understand where we are in the geography of the city, what we are in real time and what we’re going to be when we grow up. So we spent an enormous amount of time on marketing and branding like all the other BIDs. But for an area that had largely been forgotten we had to do a lot of perceptual change and a lot of marketing and positioning. … We help manage growth. We not only did ‘clean and safe,’ we not only did economic development and business attraction, and the marketing and (public relations) and branding, but we helped manage change in an area that’s going through a rapid transformation and adding residential population. We do tax residents through our apartment buildings but also our condo and co-op owners—the for-sale product—pay $120 a year, which I always remind them is the price of a $10 bottle of wine per month for all the services you get. They’re largely happy but we’re starting to think as we transition from a strategic planning, economic development entity to a management of the public realm (entity) but also an interface with the residential community, we’re going to have to have a residents advisory council to deal with that.”

On the role transit has played in the neighborhood…

“We have been anchored by Metro. We’re on the Green Line, which we think is the next great line in the city without all of the mechanical difficulties of the Red Line. And we did a study showing that more housing has been built on the Green Line than even the Rosslyn-Ballston corridor (along Metro’s Orange and Silver Lines) in the decade of the 2000s. So the millennials are clustering there and this is how we promote our office market. It’s a one-seat ride. … What the Metro system has done for our entire region is nothing short of incredible. You see Crystal City, which is yes, a concrete canyon, but has been transformed into this live/work/play outdoor space. That is happening along all the (Metro) lines—rapid urban densification.  … I really believe the investment in Metro was one of the best strategic decisions this region made and that was under LBJ. It was seen as a way to move federal employees and a safe way to move tourists around. Now it has really become the backbone of infrastructure for transportation and we have a new leader there (Washington Metropolitan Area Transit Authority CEO Paul Wiedefeld) but I think we’re going to have to go to a regional sales tax to fund the deferred maintenance (on the Metro system), which is $6 billion in deferred maintenance. … And that doesn’t even (include) buying new cars for the next 15 years. … (It’s a) brilliantly designed system yet they didn’t foresee the popularity of it so it’s single tunnels—you don’t have redundant tunnels like New York where you can go around a stalled car. So as they work to fix it, we’re going to go through two years of pain, which is better than five years of pain, to fix the tracks, to fix the electrical connections.”

On the importance of the Nationals Baseball Park to the neighborhood’s success…

“(It was) about a $650 million investment by the city, which is bringing almost 3 million visitors to the neighborhood. They are celebrating 10 years of baseball in the community and off to a good start. We received a lot of criticism about the ballpark. … It opened during the recession so we didn’t see the collateral real estate development but what it did for us was it mentally mapped our neighborhood in a region of 6 million people. It was a cornerstone piece of the (Anacostia Waterfront Initiative) Framework Plan. It stabilized and then accelerated land values. It showed a commitment to our neighborhood by the District (of Columbia) government. And then it brought new visitors and exposed them to this river that they hadn’t really thought about before.”

On the importance of BIDs to transforming neighborhoods…

“There are 10 (business improvement districts) in the city (of Washington). There are 15 … in the region. These really are wonderful management organizations and we’re the only BID in the city that actually manages two city-owned parks. And we started out with a very low rating (on the question of) ‘is the area clean or very clean?’ … at 6 percent. In about 6 years we went to 94 percent saying ‘clean or very clean’ and 81 percent saying ‘safe or very safe.’”

Session Presentations

CSG Resources

Further Reading