Business improvement districts and boundary spanning

Business improvement districts are created by property owners (and businesses) as a management mechanism to provide services that collectively improve the commercial district and thereby the economic value of property. They are paid through a "tax" assessed on property which is collected by the city and passed on. The districts are self-managed and don't have board members representing stakeholders (i.e., residents, customers, etc.) that are "served"* by the property owners and businesses located in the properties.

At the same time, BIDs are supposed to manage the commercial district overall in ways that maximize its popularity and success. Sometimes this means that the BID should make decisions that might anger individual business owners. This ought to be the case with regard to vending. The Post had articles in October and December with regard to food trucks angering bricks and mortar businesses, especially in Adams-Morgan ("D.C. restaurant owners pushing for tighter restrictions on food trucks"), as well as Latino vendors in a nearby plaza being seen as competition as well ("D.C.-backed weekend Latino food market upsets some restaurateurs.

From the food truck article:

For years, the District has sought to diversify its street-food scene, and rules proposed by city regulators in June were designed expressly to attract unique vendors like Fry Captain, the truck that parked near Bennett's shop.

But brick-and-mortar restaurants are pushing back against the proposed rules, saying they fail to protect existing businesses that make bigger investments in their neighborhoods and pay higher taxes. In response, food truck owners, fearful of the power of restaurant lobbyists, are busy drumming up popular support for the proposed rules.

Jake Sendar, the Fry Captain himself, felt the pressure in Adams Morgan. On his first night doing business, he found himself defending his rights to two angry restaurant owners and several police officers. Sendar decided enough was enough. His Fry Captain food truck now sticks to places where other food trucks have found a welcoming audience, mainly around Farragut West and L'Enfant Plaza.

(Note that this is an issue in Eastern Market as well.)

In each case, individual business owners aren't thinking about the need for the overall commercial district to continue to be vital and interesting and able to serve many different market segments--and not all market segments are able to or going to be served by particular merchants and their offers because what they offer isn't what some segments want.

Some people want the quick bite, something interesting, maybe less expensive and faster than going into a restaurant or standing in a long line. And as someone said in the discussion about food trucks and Eastern Market -- "you ought to be happy that food trucks want to be here, as it's a sign that the area is considered vibrant."

In Prince George's County, food trucks, often run by Latinos, were seen as blight, and banned, whereas Montgomery County is interested in food trucks in terms of the vibrance and vitality issue.

But the business improvement districts rarely take on the merchants for the greater good.

Last night at a Ward 4 ANC subcommittee meeting on the "Square 2986" issue (a/k/a "Walmart") I mentioned that I didn't like doing "Main Street" type work with property owners and merchants because in my experience, they were too self-interested and unwilling to be reflective about their offer--that they are independent businesspeople for a reason, and that by definition their independence makes them underappreciative of "help."

A sociologist graduate student's blog, A (Budding) Sociologist's Commonplace Book, has some interesting discussion about Adam Smith:

Smith devoted several extensive passages to showing how merchants (and others) often colluded to act in their own interests and against that of the public (think of: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” from Book I, Ch. X). And Smith’s hatred of corporations was evident, as noted by Polanyi. In the famous invisible hand passage, Smith notes that some merchants prefer to safeguard their capital and thus invest locally rather than abroad, in spite of the higher possible returns in foreign trade:

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. (Book IV, Ch. II)

So, his point is that most merchants are most of the time out for themselves and do all sorts of terrible things that are not at all in the public interest to get their way. But, some merchants, those that out of fear (and not civic-mindedness) support domestic over foreign industry, end up promoting the interests of society by accident. Hence the irony of the joke.

I think Smith's comments are relevant to how merchant interest groups make recommendations about vendors. The recommendations and preferences of merchants and their BID representatives need to gauged in part with regard to their self interest. And BID organizations need to be admonished to carry out all of their mission--managing the commercial district overall, for the greatest public good, not just for particular interests.

* Served maybe in the vernacular sense with regard to police power -- in Black communities in Los Angeles, people referred to being "served" by the police meaning "arrested," abused etc., in relation to the department slogan painted on the vehicles "To protect and serve." The other line was that "the police department protects white people and 'serves' black people." LAPD police car image from Wikipedia.