Friday, May 4, 2012

Coverage from Downtown Express and Villager on BID overcharge scandal

BY ALINE REYNOLDS   |  Though a billing snafu for the Chinatown Business Improvment District has been resolved, it has reawakened a long-standing debate over the neighborhood’s new BID and caused anxiety among some property owners about being overcharged by the organization in the future.
The BID’s interim board of directors voted in favor of retroactively charging property owners the mandatory payments starting last October, when Mayor Bloomberg signed off on the BID’s formation. However, a group of property owners contended that the fees should only have started once state Comptroller Thomas DiNapoli approved the entity at the end of January.
The property owners, backed by the Asian American Legal Defense and Education Fund, claimed the charging of fees prior to February was illegal and threatened to file a lawsuit against the city to contest the charges.
“As we have noted to the city, the BID did not exist at that point, and the BID has not yet contracted with any entity to perform its services,” said Bethany Li, a staff attorney at AALDEF. “We will work with small property and business owners in Chinatown to monitor the BID to ensure that it does not run afoul of the law again.”
Andrew Schwartz, first deputy commissioner of the Department of Small Business Services, which oversees the BID payments, said the start of the assessment fees has varied from BID to BID since there isn’t a firm policy in the city regulations.
“In light of the confusion, we basically said, ‘Let’s just go with Feb. 1 as the start date,’ ” Schwartz said. “We didn’t want people to think they were going to be penalized or foreclosed, so we reached a quick and reasonable accommodation.”
All Chinatown property owners that had retroactively paid the fees beginning last fall will be credited for four months’ worth of payment up until February and, from now on, billing for future BIDs will begin upon the state comptroller’s approval, according to Small Business Services.
By this July 1, Chinatown property owners will be responsible for paying five months’ worth of fiscal year 2012-13 assessment fees, between February and June. Fees for fiscal year 2013-14, meanwhile, must be paid in accordance with the property owners’ regular real estate tax bill schedule, which varies among property owners, according to S.B.S. Last week, property owners in the BID’s catchment area received letters both in English and Chinese explaining the changes.
Meanwhile, Wellington Chen, executive director of the Chinatown Partnership Local Development Corporation, which spearheaded the BID’s creation, said the delay in collecting fees is depriving Chinatown of vital resources. The L.D.C. has wholly financed some $300,000 worth of sanitation, holiday lighting and other BID-like services since last July, he said, and the BID’s interim board of directors has passed a motion requesting that the L.D.C. be reimbursed.
“We’ve been saving every nickel and dime, but that cannot last,” Chen said. “Regardless of when the BID clock starts, the fact is, services are being rendered.”
David Louie, chairman of the BID’s interim board, said he believes the BID is “morally obligated” to reimburse the L.D.C., particularly since funds that the Lower Manhattan Development Corporation previously provided to the Partnership have dried up.
“They did all this cleaning without even knowing where this money was going to come from,” Louie said.
Property owners such as Jan Lee, however, deem the charges premature and arbitrary and say they have lost all potential trust in the BID’s actions moving forward.
Lee and others who were suspicious of the October start date of the assessment fees refused to pay when they received the bill in late February.
“I don’t understand how this could have happened — it’s very disappointing,” Lee said. “The BID board was advised to say, ‘Someone has put money into cleaning that started last July, and someone should be reimbursed for that. Let’s use tax money guaranteed from the Department of Finance.’ It’s completely contrary to what the BID law says.”
Dean Fong, who will have to pay the BID an $800 annual tax assessment for his two commercial condominium units at 210 Canal St., also found the charges to be unlawful.
“It was very negligent on the part of the BID board who, we were told by elected officials, would be very careful and have great oversight into making sure that monies assessed to property owners would be proper,” Fong said.
Fong said he feels far from relieved by the city’s reversal of its initial decision.
“I knew they had to, or they would face a lawsuit, which would be so embarrassing for them,” he said.
Councilmember Margaret Chin denied the allegations by Fong and others, saying she reached out to S.B.S. for clarification as soon as she got wind of the objection to the fees.
“Property owners have raised their concerns with the Department of Small Business Services, and their concerns are being addressed,” Chin said. “Like other elected officials, including the mayor, I have a mandated seat on the BID board. As a board member, I will continue to represent the needs of small business owners and residents while supporting the BID in their efforts to improve the Chinatown community.”
Regardless of when the fees take effect, local property owner John Casalinuovo resents having to pay more than $2,000 annually toward the BID, particularly since city services such as trash pickups have recently been on the decline, he said.
“This is one of the most underhanded things the city has done in a long time,” Casalinuovo said of the BID. “I have no confidence in this, no matter what they would have done.”
But other property owners see value in the BID. Philip Lam, who owns a residential and office building at 38 Market St., said he would have been more than willing to fund the services starting last fall. His tax assesment for the BID amounts to $1,500 per year.
“I always support them, because they do the job,” Lam said. “Somebody has to pay these workers.”
James Tsang, whose real estate company, Prosperity Enterprises, owns 185 Canal St., said the L.D.C. deserves to be reimbursed.
“They continue to do the work and clean Chinatown. I think they deserve to get more support,” Tsang said. “Without financing, how can they hire people to do cleaning or anything else?”