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Highlands Business Partnership: Frequently Asked Questions

What will a BID do for Highlands?
It is the committee’s feeling that a BID in Highlands will be the catalyst to the continued rebirth of the town. It also was the committee’s feeling that only the commercial property owners’ should be involved (as the majority of the 41 New Jersey BID’s involve only commercial property classifications - not residential). BID is an organization, management, and financing tool used by commercial property owners and local businesses to provide specialized services such as: maintenance of public areas, physical improvements, special events, holiday lighting, area marketing and business promotion. Almost any type of service or improvement can be supported. The services are designed to compliment rather than replace municipal government services in order to implement a business revitalization plan.

What is a BID?
A BID, Business Improvement District, is similar to a water, sewer, sidewalk or fire district in which property owners pay an additional charge for specific services. A BID is created under state law and enacted by municipal ordinance by Mayor and Council.

The state law permits property owners and businesses to organize and assess themselves to pay for the services that they determine they need. The assessments are collected by the local municipality and turned over to the BID, usually on a quarterly basis, through the normal municipal collection process.

How does the BID operate?
A non-profit District Management Corporation is created that is made up of commercial property owners, business operators and government officials. The non-profit, District Management Corporation governs by a District Work Plan that defines the operations of the BID District. The District Management Corporation creates and defines the District Work Plans, sets priorities and monitors progress, along with all decisions relating to the operation of the BID including budgets, annual assessments, and management of the specialized services.

Why a BID and not something else? (That we don’t have to pay for….)
A basic human factor comes into play when a problem needs to be solved. The stakeholders of the problems become involved when their personal interests and money are on the line. The same holds true for commercial business districts.

Commercial districts form business organizations or Chambers of Commerce to address their problems or promote their businesses. Often these business organizations lack comprehensive representation from the business community to undertake the challenges dealt them. Highlands has a Chamber of Commerce that represents approximately _ of the commercial business community. Many commercial property owners and business operators are not involved in the funding of the Chamber of Commerce and/or the volunteer efforts that go into creating the agendas and implementing the solutions to the problems. In addition, due to the size of the Chamber of Commerce budget, there is inadequate funding to provide full time professional management for delivering competitive business practices and services developed at the local level. The Chamber of Commerce receives the criticism for lack of solutions or success for the local business environment, when they are not fully empowered to undertake the tasks at hand.

Empowering the commercial property owners as stakeholders of the future growth and development of their personal commercial property investment’s, provides the best approach to finding a tool to maintain an organized process. Capturing professional commercial talents; collecting fair assessments, that allows them to invest in their future; and are equally shared by all commercial property owners of the district ensures comprehensive management of the issues that affect the local commercial business district. BIDs provide a cooperative funding tool where solutions can be found to enhance commercial property owners’ private investments. These public private partnerships overall enhance the entire community and provide ongoing resources for positive community development.
Business Improvement Districts permit municipalities to compete more effectively and efficiently with existing retail/commercial markets (particularly shopping malls). By creating a BID - implementing a system for organizing business issues, creating a financing tool and using professional management; the management of commercial business services develop competitive business strategies utilizing private/public partnerships.

The management tools created through a Business Improvement District do not replace services provided through established municipal services. The management tools of the BID add competitive advantages to the business district that can not be provided through the municipal budget and administration. Through this tool the district begins with the understanding that district wide service is a requirement for business development and excellent service and community reputation is a competitive advantage for success and growth.

Excellent service is not an accident and neither are successful business communities. They are cooperatively planned and managed professionally.

Can’t we get by without a BID?
There are more than 43 Business Improvement Districts, BID’s in New Jersey and hundreds throughout the nation (Times Square BID District New York City, North Flatbush Brooklyn, New York; Center City, Philadelphia; Larimar Square, Denver Colorado; Seattle, Oregon) and state wide (Red Bank, Freehold, Iselin, Historic Bound Brook, Rahway, Wildwood, Woodbridge, Vineland). The large and small of these cities and central business districts rallied around the following potential benefits for commercial properties and business districts:

1. Supplementing government services (not replacing services) to be more competitive
2. Provide non-government services – marketing, promotion/advertising business recruitment and retention
3. Serve as an AVOCATE for commercial business districts to speak collectively, develop and promote unified positions on matter that affect the local economy, improve government services through performance monitoring.
4. Cooperative enterprises allow business to engage in joint advertising and purchase of services, special needs common to many but not all businesses.
5. Capital improvements financing – capital improvement financing allows BIDs to borrow to pay for (example streetscaping) programs under applicable state laws and public private partnerships.
6. Research and planning services that collect and analyze economic and demographic data.

Why consider a Business Improvement District BID?
The advantages for Highlands to consider a BID are:

• Legal authority designed to promote commercial business revitalization
• Capability of professional management of retail/commercial services that enhance business in the district.
• Dependable source of private sector funding to spur reinvestment in the commercial business district.
• Ability to attract public sector funding partnerships to solve commercial business district problems and promote solutions to those liabilities.

BIDs allow for the organized and professional implementation of competitive buisiness practices and services developed and maintained cooperatively at the local level. Professional commercial district managers coordinate and deliver services specially designed to enhance the business environment and strengthen Highlands economic capacity.

In summation, it is the Business Improvement Steering Committee’s unanimous feeling that the Mayor and Council of the Borough of Highlands promptly proceed with the establishment and implementation of a Business Improvement District in the Borough of Highlands.

Members of the Highlands BID Steering Committee have been active participants with the Neighborhood Preservation Program and the Highlands Chamber of Commerce. Members of the Highlands BID Steering Committee are: Doug Douty, Chairman (Lusty Lobster CPO/BO), Carla Braswell/resident (Parties By The Sea BO), Ray & Jay Cosgrove (Bahrs Restaurant CPO/BO), Ray Goddard/resident (Suzanne’s Antiques BO), Lynn Hunter (Clam Hut CPO/BO), Martin Klose (Bobby D’s Bay Avenue Grille CPO/BO), Katharine James/resident (Sand Dollar Card & Gift CPO), Shawn Mc Coy & George Ruth/resident (Forever Antiques CPO/BO), Sasha Morford/resident (Sasha’s Boutique BO), Sherry Ruby/Gloria Miller/resident (SeaScape Manor Bed & Breakfast CPO/BO), Bill Wilson, Esq./resident (Wilson & Fasano CPO/BO), Joan Wicklund/resident (Sand Dollar Card & Gift BO).
CPO = Commercial Property Owner
BO = Business Operator

The fifteen Highlands BID Steering Committee volunteers are comprised of:
10 commercial property owners/business operators who are residents of Highlands
4 business operators who do not own the commercial property but operate a business
1 commercial property owner who does not operate a business
10 commercial property owners who also operate a business in the commercial property that they also own.

The BID Steering Committee would also like to thank the assistance provided through this process by Mayor Richard O’Neil, Councilwoman Dolores Howard, Councilman Robert Rauen and Borough Clerk/Administrator Nina Light Flannery.

1. District Boundaries and Property inclusion for the Highlands BID District

1.1 Committee findings conclude that with the size of Highlands (0.64square miles) the entire Borough will comprise the BID District with inclusion of all commercial properties (See Zoning Map with commercial property class 4a noted).

2. Commercial Property Inclusion in the BID District

2.1 This includes approximately 113 commercial properties from the Tax Assessor’s records noted as property class 4A as defined by the Assessor’s Manual, Section 1002.2 Classification of real property: Class 4 – Other property may be described generally as land or land and improvements used in and/or designed for use in a business or commercial or industrial enterprise, Which produces or is intended to produce income. This category encompasses:

• Commercial properties (Class 4a)
• Industrial properties (Class 4b)
• Special purpose properties (Class 4a or 4b
• Apartments designed for the used and enjoyment of five families or more (Class 4C)
• Any other type of income producing property other than property in
  Class 1 (Vacant Land), Class 2 (Residential), or Class 3a (Farmland regular) Class 3b (Farmland qualified)

Prior to beginning the process of determining properties inclusion in the BID, the Assessment subcommittee undertook a project to make an inventory of commercial properties in relation to the new Zoning Ordinances. Katharine James, Kathaleen Shaw and Linda Greco conducted site visits and reviewed all commercial properties and provided the Highlands Tax Assessor with a list of properties identified as inconsistent with use and Borough Records. All properties listed in the Borough of Highlands Tax Assessor’s records as property class 4a have been included in the BID. Any questions from property owners must be addressed to the Borough of Highlands Tax Assessor, Fred Maffeo.

3. Highlands Process
The first meeting of the Highlands BID Steering Committee was held at Bahrs Restaurant, Wednesday, April 29, 1998 with a presentation from Seth Grossman, Department of Community Affairs, State of NJ Business Improvement District Program.

The Highlands BID Steering Committee designated the following subcommittees:
ByLaw/Ordinance
William Wilson, Councilman Robert Rauen
Goals/Services
Shawn McCoy, Lynn Hunter, Sherry Ruby, Ray Cosgrove, Jay Cosgrove,
Joan Wicklund, William Wilson, Chair: Carla Braswell
Assessment
Doug Douty, Katharine James, Lynn Hunter, Gloria Miller, George Ruth,
Chair: Ray Cosgrove
Public Information
Councilman Robert Rauen, Katharine James, Sasha Morford,
Chair: Ray Goddard
(see attachment #3 and #3A)
Technical Assistance was provided by Kathaleen R. Shaw, and Linda Greco
Neighborhood Preservation Program, funded through the Department of Community Affairs and the Borough of Highlands.

A meeting schedule was organized and is provided as (See Attachment #3) for all subcommittees to meeting and develop BID agendas under their information topic.

3A. Goals and Services provided by the Highlands Business Improvement District (BID)
The goals and services subcommittee developed a comprehensive agenda of issues important to the Highlands commercial business district.
The issues were developed from the subcommittee and through their outreach to business peers within the community.

The issues identified for developing the BID were compiled into a District Work Plan (see attachment #4). A Highlands BID Work Plan Summary was compiled to provide a one-page summary of the BID objectives along with the potential partners to accomplish the goals of the commercial business district (see attachment #5 & #5A).

4. Assessments for the Business Improvement District (BID)

4.1 A listing was requested from the Highlands Tax Assessor containing all properties defined under the Assessor’s Manual 1002.2 as Other, Properties, Class 4, as described above. The Bayshore Development Office, providing technical assistance for the Highlands BID Steering Committee, entered the data received from Fred Maffeo into a database, which allows for the application of various calculations.

4.2 The Highlands BID Steering Committee considered using the Merchantile
License procedure administered by the Borough of Highlands as a means of organizing a BID. This list included commercial business operations and excluded various commercial properties that were not required to participate with the Borough Merchantile License regulations. All Merchantile License holders are included in the BID eligible properties through a detailed analysis of the Assessor’s database of commercial properties Class 4a, and the Borough Merchantile List records. The Borough Merchantile License regulation, created by an ordinance, has no provision or procedure for enforcement unless tied to a liquor or board of health license application. Using this mechanism would leave the business district with a same result as voluntary participation and membership in the Highlands Chamber of Commerce

4.3 Assessments must be proportionate to the benefits received. Evidence of proportional benefit is linked to services or physical improvements that enhance the value of commercial properties. Assessments must be equitable and affordable. All who benefit must share the costs. This
Is welcomed in Highlands where commercial business district activities have been dependent on the generosity of a few business owners and/or unpredictable municipal support. Because all beneficiaries pay, the cost to each is typically small.

4.4 Highlands BID Steering Committee recommend the most widely accepted method of selecting an assessment formula is the assessed valuation (or percentage of taxes due). Commercial property class 4a properties included in the BID District will have a BID assessment of .34 per $100 of assessed property value. There shall be a cap of $3,000, whereby no individual commercial property owner will have a BID assessment higher than $3,000 per year, based upon the .34 per $100 of assessed value formula. There shall be a minimum assessment of $365, whereby no individual commercial property owner will have a BID assessment lower than $365 per year, (a dollar a day) based upon the .34 per $100 of assessed value formula.

4.5 The assessed value formula method:

• Responds directly to assumed principal benefit of the BID, i.e., improved property values.
• Easily calculated from Borough records.
• Established methodology includes consideration of the variables of property values, including location, lot size, size of improvements age of improvements, etc.
• Methodology is not subject to dispute at the BID level.
• When commercial properties experience diminished occupancy, owners can appeal to the municipality under established procedures.
• Easy to understand.
• Widely accepted as equitable.

4.6 Highland BID Steering Committee also considered an a BID Assessment of .17 per $100 of assessed commercial property value, which provided a total BID Budget of $40,000. This was deemed not sufficient to undertake the goals and objectives defined by the Goals and Services Committee.

4.7 A flat rate assessment for all commercial properties was considered and put aside die to lack of accountability to an established methodology evaluating the value of the commercial property. This consensus of opinion was made after a meeting with Robert Goldsmith, esq., of the Law Firm of Greenbaum, Rowe, Smith, Ravin, Davis & Himmel. Woodbridge, New Jersey, Bayshore Development Office Staff and the Highlands BID Steering Committee.

The creation of a BID assessment strategy based on a flat rate (across the board) assessment left the BID extremely vulnerable to litigation. There would be no means to justify differences in benefits from the flat rate assessment. In addition, a system would need to be created to respond to appeals based upon a flat-rate assessment. The BID Steering Committee was presented with prevailing BID assessment rates for Monmouth County: Freehold .225 and Red Bank .556 cents per $100 of assessed commercial property valuation.

4.8 Assessment committee also considered capping commercial properties that would have BID Assessments in excess of $1,000 annually. These were organized by proximity to the ferry/customers and the distance from Highway 36. The concept was to organize different levels of caps. This was difficult to make determinations based on such arbitrary reasons.

4.9 A BID assessment minimum of $500 annually was calculated and it was reduced to $365 annually. The minimum rate was agreed as a modest assessment for the services and improvements offered through the BID District Work Plans.

4.10 Vacant properties (property class 1) utilized by commercial properties were considered to be included in the BID District as eligible properties.
The data collection revealed a total of 172 vacant properties (property class 1) and approximately 80 were identified as vacant land used as commercial provided approximately $3,000 additional assessment funding at the .17 rate and $6,000 at the .34 rate. Therefore, vacant properties were eliminated, as there was consensus that including these properties would add a hardship to the commercial property owners.

The goal was to include all the stakeholders in the process based on individual ownership.Participation by commercial property ownership was a way to include everyone on an equal basis.

4.11 Many BIDs include vacant properties because they are vital for commercial growth and expansion of the commercial business district base. In Highlands’ case the commercial business district is fully developed, but it highly underutilized by commercial business operations. This was visually evident by the creation of the digital zoning map of Highlands and the designation by salmon color the commercial property class 4a properties.

4.12 Taxable property in the Borough of Highlands total $228,831,250 There are:
4 vacant parcels valued at $4,054,900
2,220 residential parcels valued at $195,619,750
113 commercial parcels valued at $26,212,400
0 industrial parcels
15 apartment parcels valued at $2,944,200
The 113 commercial parcels valued at $26,212,400 contribute two and one half times to the taxable property base by camparison to the residential parcels

4.13 A goal put forth by BID Steering Committee Chairman, Doug Douty, at the beginning of the assessment determination process was to formulate for Highlands an average BID Budget in relationship to the total commercial assessed value in the community. The rule of thumb for an average BID Budget is 6% of total commercial assessed value. Highlands’ commercial property total assessed value is $26,212,400 (1/6/99) and 6% would be $1,572,744. It was evident that Highlands by no means could tolerate a budget at 6% of the commercial property total assessed value. The BID budget recommendation is based on .34 per $100 of assessed commercial property value. At approximately $85,000 the Highlands proposed BID Budget is less than 1% of the total assessed value of Highlands commercial properties.

4.14 Highlands BID Steering Committee proposes .34 cents per $100 of commercial property valuation with a cap of $3,000 and a minimum of $365. This assessment formula provided the most comprehensive, fair and equitable participation without affecting financial hardships at the top and bottom of the range of commercial assessed value of properties included in the BID District. (see attachment #6)

5. Highlands Bid Steering Committee – Summary
The Highlands BID Steering Committee Meeting was held on October 20, 1998 at Bahrs Restaurant to review all subcommittee findings and recommendations. A Joint Assessment/Goals Subcommittee Meeting was called for Tuesday, October 27, 1998 at the Clam Hut.

The Top Five Issues were identified by consensus of all the subcommittees.

• BID and Borough Boards have the same goals for Business Community.
  Create a Business Guide to define the same invitation for new business development and recruitment.
• Identify flood hazard conditions that deter economic growth – partner with the Borough for funding opportunities.
• Secure a trolley that connects Sandy Hook, ferry landing with commercial business district (including off-season times) and other pertinent destination points in the Bayshore Region.
• Identify distressed or underutilizated commercial properties. (Encourage repair or sale of property)
• Utilize the Atlantic Group Report to begin a waterfront agenda for economic development options and partnerships.

January 27,1999
A Highlands BID Steering Committee Meeting was held on January 27, 1999 to discuss budget changes and finalize a letter to all commercial property owners inviting them to a public meeting scheduled for 2/10/99.

Notices were direct mailed to 113 commercial property owners inviting them to a public meeting to be presented with the fact findings and recommendations of the Highlands BID Steering Committee and discuss their specific questions.

February 10, 1999
The entire BID Steering Committee was present at the 2/20/99 public meeting and thirteen commercial property owners attended the meeting in addition to the fifteen members of the BID Steering Committee. There were various questions directed to the Steering Committee and Kathaleen R. Shaw, regarding statutory regulations of a BID and general questions about what will be improved and how the BID operates. There were many positive comments about the potential implementing the services and goals for the commercial business district. There were comments that a BID was not needed and an invasion of one commercial property owner’s rights; that they are getting along just fine paying their bills ahead to time and satisfied. Overall the consensus of the BID Steering Committee that the meeting was successful and that the process needed to be continued to inform commercial property owners and seek their involvement. (see attachment #7, #7A)

February 23, 1999
A Public Information subcommittee meeting was called by Chair, Ray Goddard along with a BID Steering Committee Meeting scheduled for immediately after.
Minutes of the February 23rd meeting (see attachment #8 ) are submitted along with
the final report to the Mayor and Council. Consensus from the Steering Committee, and members of the governing body was to move forward and introduce the BID Ordinance and Budget Resolutions at the earliest possible date. The public process can then continue during the ordinance process.

6. GIS (Geographic Information System) Interface
Availability of digital versions of the Borough of Highlands maps will be expanded as the County of Monmouth completes the tax-mapping project. This will enable the Highlands BID to track and produce business expansion and bench marking strategies. The Highlands Zoning Map has been scanned and is currently available in a digital format. Using these tools commercial areas that are underutilized or in poor condition can be identified. Marketing of selective commercial properties, as in regularly undertaken in Red Bank, RiverCenter, can be undertaken by the Highlands BID to strengthen business recruitment strategies and the commercial tax base. Coordinating the tracking of improvements, certificates of occupancy, new construction of the commercial properties will enable the BID to evaluate the impact of the BID and the effects on the entire community.

7. Regional Marketing Joint Services

7.1 Regional Event Journal
The Bayshore Development Office in joint partnership with the Northern Monmouth Chamber of Commerce is embarking on the creation and development of an area wide event journal to be published quarterly. This Bayshore guide will offer editorial, advertising and an event calendar for the region, but specifically centered on BID activities. The piece will also contain a regional map, highlighting activities and destinations in the region and specific municipalities.

7.2 Web Page
The desire of the Bid to undertake maintenance of a web page to feature all activities and events of the BID while supplying information on the Borough. This Internet marketing tool will have links from the Bayshore web page and to specific web pages highlighting businesses and activities of Highlands.

8. Management

8.1 Management Services Agreement (see attachment #9)

9. Sample Ordinance/Resolution

9.1 Draft ordinance to establish district, boundaries, non-profit, development corporation and Board membership. (see attachment # 10 )10. BID Organization Structure

10. BID Organization Structure

10.1 The sub-committee’s established for the purposes of this report, were created as an interim committee. When a BID is established in the Borough, the same organizational structure could be followed until formal nominations and elections of the formal Board of Directors and Executive Committee. New or expanded committee development would be encouraged if the initial committee development does not fulfill the needs of the newly formed leadership.

10.2 Membership with these committee’s is the backbone of any Business Improvement District. Success can be defined and measured by the structure, balance and wisdom of a BID’s committees and leadership. All actions come from and lead to the committee.