A Grand Alliance

Local Business Improvement District Compares Well to Peers in City Review

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The New York City Department of Small Business Services (SBS), which oversees the operation of the City’s Business Improvements Districts (BIDs), has completed a report that sheds light on the work of the Downtown Alliance, which covers Lower Manhattan, roughly between between City Hall and the Battery, from the East River to West Street.

A BID is a geographical area where local stakeholders form a non-profit organization that oversees and funds maintenance, improvement, and promotion of a commercial district. Services (which are meant to supplement, rather than replace, those offered by City government) can include street cleaning and maintenance, public safety and hospitality, marketing and events, capital improvements, and beautification of public spaces. The SBS white paper, titled “Fiscal Year ’16 Business Improvement Districts Trends Report,” looks at all 73 BIDs spread across the City’s five boroughs, which collectively raise and invest more than $135 million in local neighborhoods each year. In almost every category, the Alliances compares favorably to similar organizations operating in other areas of the City.

By any measure, the Downtown Alliance is the largest BID operating in New York. It is one of only six BIDs that spend more than $5 million per year, and comes in first on this list with an annual budget of slightly more than $20 million. The next largest spender is the Grand Central Partnership, which trails with a budget of $ 13.7 million, or 31 percent less. (As with all bids, the Alliance funds its operations through assessments paid by business and property owners within its borders. The Alliance also raises an additional $1.3 million per year in direct contributions.)

Within this budget, the largest line item is sanitation, on which the Alliance spends slightly more than $5 million, logging more than 125,000 hours per year (at a rate of just over $40 per hour), and spending an annual total of approximately $11,000 on each of 458 block faces it cleans. This is slightly less per block than is spent by the Grand Central Partnership, and significantly less than the cost for the Times Square Alliance (which spends almost four times as much per block).

The second biggest expense for the Alliance is public safety, which costs $4.1 million and accounts for slightly more than 108,000 hours. This translates into security expenses of approximately $38 per hour, or slightly more than $9,000 per year on each block face within the Alliance’s borders. Here again, the Alliance’s expenses are roughly in line with those of the Grand Central Partnership BID, but vastly less than those of the Times Square Partnership (which spends $43 per hour, and $32,000 per block annually on security).

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In 2016, the organization also spent $3.1 million on marketing programs and events. Last year, the Alliance’s dozen-plus public events attracted more than 25,000 participants. This category also includes producing and distributing more than one million brochures and other marketing materials, as well as creating free digital platforms, like smart phone apps, which draw some 46,000 subscribers. In this comparison, the Downtown Alliance again spent less than the Times Square Alliance, but the BID covering West 42nd Street appears to achieve more robust results, hosting public events that drew more than 8.5 million attendees, according to the SBS report, and attracting an audience of 1.6 million subscribers for its digital platforms. (In fairness, these numbers may be skewed by the siting in Times Square of events such as the New Year’s Eve celebration, which by itself draws more than two million visitors.) On balance, local residents who have grown weary of competing for sidewalk space with the 11 million-plus tourists who visit Lower Manhattan each year may wish to thank the Alliance for hosting public events where attendance is limited to single-comma totals.

In the category of streetscape beautification, the SBS report found that the Alliance maintains nine public spaces in Lower Manhattan, along with 195 public planters and more than 1,500 pieces of street furniture.

To provide these services, the Alliance spends $1.7 million per year on general and administrative expenses (including payroll), which comes to 8.7 percent of its budget. This is a less that half the typical percentage, according the the SBS report, which says that the average BID spends 18.4 percent of its budget on administration and payroll. The portion of revenue that the Alliance spends internally is also lower than several directly comparable organizations: the Grand Central Partnership (which spends 12.4 percent of its budget on payroll and administration) and the Times Square Alliance (which allocates 14.9 percent of its budget to the same expenses).

Along with the services described above, the Downtown Alliance has created multiple unique programs, such as Lower Manhattan Headquarters (LMHQ). Launch in 2015, LMHQ is a collaborative workspace catering to companies in the technology, advertising, media, and information (TAMI) industries, located at 150 Broadway, where it occupies the entire 20th floor. The Alliance operates LMHQ as part of its mission to lure more firms from every industry to Lower Manhattan. The 12,500-square foot facility consists of meeting and social gathering venues, work areas, advanced audio-visual equipment, a 140-seat event space, a coffee and pastry bar, and original programming from a broad spectrum of partners, across a wide range of disciplines.

The Alliance also produces research and reports documenting the ongoing resurgence of Lower Manhattan as a business and cultural center, a destination for tourists, and a residential enclave. The organization additionally provides free wifi connectivity to more than 4.5 million square feet of public space in Lower Manhattan.

Among the other services provided by the Alliance that Lower Manhattan residents especially prize is Downtown Connection shuttle, which ferries passengers (free of charge) between 37 local stops that link residential areas neighborhoods with business and shopping districts. The Alliance spends more than $2.2 million per year to operate this service, which is also funded in part by the Battery Park City Authority. The Connection shuttle is currently utilized by more than 800,000 people each year.

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