Wednesday, March 17, 2010

novel public finance

Long ago I studied, as a student at least, Business Improvement Districts in New York City where were and are now a big topic.  Many don't fully realize that the Pittsburgh Downtown Partnership (PDP) is a BID.  A BID is not just your run of the mill neighborhood business association.  One of the defining characteristics of  BID is an ability to assess taxes which is done on the property value.  BIDs in themselves are not new, but grew rapidly in use under Mayor Ed Koch in New York City a couple decades ago.  I am not sure but I think the BID downtown is one of the last true land taxes in use.  It used to be an assessment based on the land value, and not on total property value.  Is that still true?  

Anyway, the news today is about a study done by the International Downtown Association looking at the plan to lease the city's parking assets.  Worth a read.  It also uses a better description of what is going on. At the end of the day its the all about the 'monetization' of the parking assets value.   But what caught my quick read is that they propose that if this all goes through then:  "The BID should receive a PILOT payment at the BID assessment rate on leased facilities".   I think that's quite a novel idea.  A public authority paying a PILOT (Payment in Lieu of Taxes) to a BID, in this case the PDP.  Fascinating.

BIDS are fascinating in that one path the city may take if its finances collapse is that you may see more neighborhood level districts like this created to supplement services.  It is not as big a tool in Pennsylvania as in some other states, but it's a possibility.  Only 2 BIDS in the city right now I think, but need to check.  Oakland and Downtown?  Could there be more BIDS throughout the city?  It may be worth talking about at least.


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