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.
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.)
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.