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Downtown district opponents circulate petition, ignore assessments

Original post made on Aug 3, 2007

Antipathy toward the Palo Alto Business Improvement District (BID) appears to be building, as some merchants and professionals have chosen to stop paying their annual bills and sign petitions rather than file a formal protest against the district.

Read the full story here Web Link posted Friday, August 3, 2007, 12:00 AM

Comments (24)

Posted by T
a resident of University South
on Aug 3, 2007 at 10:45 am

T is a registered user.

what does the BID do with the money?

Posted by Casey
a resident of Midtown
on Aug 3, 2007 at 1:21 pm

Typical bureaucrat:
- "They really ought to come and become involved."
- "I'm open. Tell me how we should spend [the money]."
- Some business owners don't attend because "they're not community minded."

Business owners are completely community minded. The community is their entire livelihood. They're the risk takers that work on the front lines. If money isn't coming in through the door, guess what happens? The owner doesn't get paid.

Business Improvement Districts are just like taxes. Once you start them up, it's very hard to shut them down. What they really need is a sunset clause so that the BID shuts down after five years unless 75% of the members vote to continue funding it.

Bottom line: If the BID isn't generating more revenues for downtown businesses, then what's the point of keeping it alive?

As for telling the BID how they should spend the money? I think those business owners did. Don't spend it. Return it to the business owners.

Posted by downtown merchants
a resident of Downtown North
on Aug 3, 2007 at 8:17 pm

Q. What does the BID do with the money?

A. The money collected by the City from Business Improvement District
(BID)is administered by Palo Alto Downtown Business and Professional Association(PAD)whose purpose is to use the money to promote and improve the downtown district through events, marketing and beautification programs.

For fiscal year 2006-07, our City collected $108,000 in BID
assessment on behalf of the PAD. Figures released in PAD's
annual report showed that the PAD paid its staff $80,000 as
salary plus $23,000 for "office expenses", leaving a mear $5000 for "downtown improvement" project. If you think this is bad,
read on...

When merchants or professionals who saw no improvement and refused to pay, PAD's Executive Director(who gets a salary)sent note warning them to make payment within 10 days to avoid their account being sent to collection. With their credit on the line, many yielded to the pressure and paid.

With about 200 accounts that still won't pay (some are with big names); PAD turned a few mama papa shop owners to the Collection Bureau of America in Hayward as a way of intimidation.

Just because we are so community-minded, truth must come out
about what PAD had done to 700 downtown merchants/professionals
and their BID money! Money is to be "earned", one can't threaten
others to pay, especially when that money ends up being one's
salary and not for purpose intent.

Burlingame had discontinued its BID after merchants complained, their City is well kept by a group of volunteers. Can't ours do the

Posted by goolrukh vakil
a resident of Downtown North
on Aug 5, 2007 at 12:48 pm

The comments by "Casey", a mid-town resident, are right on-mark and amazingly astute. Thank you from a non-Bid-paying merchant.

The rebuff by Bijan is ludicrous. (a) I have written several times and made suggestions to make their efforts equitable to all merchants--have a promotion for all kinds of businesses, not just those they deem bring in money for the city namely corporate restaurants. (b) I have attended council meeting and found that I what I said was ignored by council members (not validated, not questioned for clarifications, not asked to expound upon--in short, I felt as if I were talking to a wall and I felt invisible). BID
members' plea was rhetorical and self-congratulatory. As the last letter we wrote that promoted this banter, indicates, council members did not ask for the budget but simply congratulated BID in an irresponsible manner. In fact, only $5,000 of the over $100,000 collected in fees went toward helping homeless or marketing restaurants (the only two known functions the group performs). Where does the rest of the money go??? Toward the salaries of those who run this fantastic organization that they arbitrarily drummed up to pay themselves. I do not want to pay them, but I do want to do volunteer work with them toward improving downtown in an equitable manner. In fact, we are, just by our presence and taxes.

Another lie by Bijan is that we are simply complainers. As you can see from our letter, we are willing to volunteer and we are writing letters and we are attending their meetings. However, as "Casey" says, our very presence is an asset to downtown and we work hard competing with corporations and the perks the city allows them, with no guarantee in salary.

Laws which are passed without putting to ballot, systems which benefit corporates over small business, beaurocracies which pay themselves and do not address that fact--what does this equate to? Thoughtless arbitrariness, megalomaniacal prejudice and terrorism.

Get a life--let these do-gooders find another cause with the time that lays heavy on their hands. Let them buy a cup of coffee for a homeless, as I do, for starters.

Posted by pat
a resident of Midtown
on Aug 5, 2007 at 2:48 pm

The purpose of the BID is to attract business to the downtown area. However, if I put myself in the shoes of a person considering opening a business, here’s what I’d be facing:

- I’m forced to pay an assessment, even if I’m not a retailer who depends on a storefront or a downtown address.

- The BID collected $108,000, of which $103,000 went to salaries and expenses! That means 95% of the assessments are funding a bureaucracy, with a mere 5% left over for the purported cause.

- Now that I know where the assessment dollars go, I don’t see any point in paying. When I refuse to pay, Sherry Bijan – who is supposedly being paid to help me increase business – threatens my very livelihood by saying she will turn me over to a debt collector. In fact, I discover that she has already turned in some of my fellow business owners.

- Bijan says she's eager for feedback, but when I protest that I’m not deriving any benefits from my assessment, she says I’m not community-minded. She wants me to tell her how to spend the money, but there’s only $5,000 left after her salary and expenses.

- Although three hundred of my fellow business owners have protested the assessment, their petition was discounted because it was not on the proper form.

- Voting for or against the BID is done on a weighted basis, i.e., one business does not equal one vote. Those who pay most have their votes weighted more heavily. This doesn’t seem fair. Will this form of voting be extended to other civic elections, whereby those who pay the most taxes have their votes weighted more heavily than others?

- Those who refuse to pay the assessment are not allowed to vote. So, I have to pay before I can protest the fact that I’m being forced to pay. There’s a real Catch-22!

If all of this is true, I’m wondering why anyone would want to do business in Palo Alto. Frankly, it sounds like a protection racket: Pay up or I turn you over to the debt collector. Maybe BID really stands for Business Intimidation District.

Posted by JFP
a resident of Midtown
on Aug 5, 2007 at 3:25 pm

I thought this article was incredibly one-sided. The fact that 95% of the money collected goes to fund salaries is ridiculous.

Posted by Steve M.
a resident of Old Palo Alto
on Aug 5, 2007 at 3:58 pm

On the web, PAD claimed its mission is to provide a "resource" for Downtown Palo Alto businesses in the Business Improvement District (BID).
Considering what PAD had done with the BID money; it is more the other way around. (Daily News, Aug.5th).

Posted by susan
a resident of Downtown North
on Aug 5, 2007 at 10:01 pm

Bijan claimed the City sends business a letter "each year" notifying them of the protest opportunity was not true. It was not until February of this year, some of us received the protest form.
One thing we do receive each year is the invoice. As a matter of fact, we received two invoices in the year of 2004. In March/2004, we received one invoice for fiscal year 2003-2004 and in July, another invoice for fiscal year 2004-2005. In other words, we had prepaid for the BID before it was formed.

Posted by "I, Magnin"
a resident of Downtown North
on Aug 6, 2007 at 11:31 am

I am not a downtown merchant, but know a thing or two about retail and retail development strategies.

First, the BID deployed by our city was well-meaning, but it's an incredibly ineffective and lightweight organization. Now, as its lightweight so-called strategies have been shown in all their grand ineffectiveness, the BID turns on the very people it is supposed to be helping - calling skeptical non-payers of compulsory (compelled without their consent) dues "scofflaws" and "whiners". Unreal...

Here's some good business advice:

Cancel the BID, or make it entirely voluntary.

Either fire Ms. Bijan, or compel her to stop moving along lightweight promotions that any average sophomore marketing student would conceive (and I'm being kind).

I find it unfathomable that this BID, under Ms. Bijan's well-meaning, but ineffective, leadership, has managed to alienate retailers, and even pit some retailers against other retailers (payers vs. non-payers of dues).

I wonder how many BID members would pay dues if they were voluntary? Anyone want to take a guess?

Case closed.

Posted by barber
a resident of Downtown North
on Aug 6, 2007 at 1:06 pm

Not only that we had bad experience talking to the current Executive Director of the PAD (Sherry Bijan); we were also frustrated with the previous Executive Director (Susan Hemmenway).
When we asked Hemmenway what had been done with our money to improve downtown? She would ask if we had noticed the beautiful flowers and lights on the tree? We told her that flowers and lights had long been there, she then said we were the Only one who complained.
When my neighbor called a week later, Hemmenway would say the same
to him that he was the Only one who complained.
We are so fed up with these people, can't they just go away?

Posted by Paul Losch
a resident of Community Center
on Aug 6, 2007 at 1:15 pm

What seems to be missing in terms of developing business for downtown Palo Alto is a "strategic" view of what sorts of businesses should be attracted and supported to operate in that environment, in light of what downtown can offer and how it compares to "competition" elsewhere, whether it is Stanford, other downtowns or big box located nearby.

Who patronizes downtown now? What gaps are there for those types of patrons which could be met with merchants not presently found downtown? What other types of patrons could be attracted to downtown in light of what is offered and what could be offered that would make it attractive to shop downtown compared with alternatives?

How do we find merchants that can fill the gaps identified? How can we attract other target patrons who could spend a larger share of their dollar in downtown establishments?

Maybe these sorts of questions are getting asked and answered and I simply have not learned about this disucssions. Events, marketing and beautification programs, if that is what the money is being used for right now, is way downstream from have a well thought out strategy of identifying the merchants and patrons that are the targets for fostering a healthier downtown business environment for all.

Much of this stuff is not really highly visible to the day to day operations of what goes on downtown, but can have huge benefits as tactics and programs are actually executed. There seem to be way too many long empty store fronts, and way to many of the same sorts of certain types of businesses along University Avenue for this observer to believe that a truly strategic assessment and plan of action on how to improve business in this part of the world is in place.

Posted by Mike
a resident of College Terrace
on Aug 6, 2007 at 3:15 pm


Be assured that there is NO coherent, long-term, retail stategy in Palo Alto. You are on target when you suggest that a retail strategy is sorely needed in Palo Alto.

There have been attempts to get a grip on what retailers need, but to no avail. The last retail "committee" effort resulted in a final round of decision-makers that didn't include even ONE major retailer in Palo Alto. Preceding rounds of the latter effort (that did include some retailers) concluded that signage was the most important thing that retailers needed.
I thought that was a joke until I saw "parking" signage signs (designed by a well-known, local developer's staff) that looked to be some of the most bombastic things I had ever seen, as far as signs go. Oh, well...

There are good studies showing that certain kinds of retail don't fit together very well; there are additinal studies that indicate maximum efficient density of certain kinds of business, etc. etc. Do we heed things like that? Nope.

Palo Alto policy - as regards retail - has long been "the market rules". While that's a nice. catchy, way to create the perception that one is following the most enlightened capitalist dictates, it's certainly not any way to run the long-term municipal retail strategy (assuming there is one) for revenue generation in a municipality.

Essentially, one policy-making body after another has "copped out" on retail strategy. Why? Because the REAL retail players - the people who csall the shots - are the commercial developers and landlords. Hohw else is it that there would be hundreds of eateries in downtown Palo Alto - or almost two dozen beauty and spa-related businesses in the California Ave. sector - or, Mexican restaurants opening one-after-another is some places, only to fail, one-after-another.

In this case "market rules" mean, let the REAL proprietors control our city's retail destiny - those "reral proprietors being the landlords and commercial developers (not infrequently the same people).

btw, this isn't to denigrate landlords and developers. They are doing what they are supposed to do - i.e. build commercial property and rent it out for a profit. That's their business.

It's much easier to rent one's space to a beauty salon than a small, interesting, niche-oriented retail venue - the former generally being a cash cow business (especially in our demographic - that should have no trouble paying the rent.

Why are there so many restaurants? Because once a space is built out with a kitchen, it's easier for the landlord to rent to another restauranteur. [[more often, it's the landlord's agent who does the renting, and dispassionate about whether the business will or will not survive; the agent (or management agency) is mostly interested in the short-term returns of maintenance commission). I have heard local management agents predict (with success) that this-or-that restaurant is doomed to failure, even before it begins. This is not to say that commercial retail management agents are unscrupulous; it's more to say that they know the score better than many naive clients.

My sense is that local retail develompent requires some guidance. How does that happen?

the first thing to do is find a way to involve retailers in policy-making. This is NOT an easy task, because retailers are very busy making the rent - most on a day-to-day basis. They do not - by-and-large - trust gogvernment to make their lives easier. In fact, based on the experience of most retailers I know in this city, it's just the opposite.

Something other than a BID has to happen here, with serious attention to the STRATEGY that Paul is talking about, with EFFECTIVE TACTICS generated to guarantee more comprehensive and enthusiastic retail participation.

Currently, this is not the case.

Posted by cpa
a resident of Downtown North
on Aug 6, 2007 at 6:10 pm

Daily news reported our executive director draws an annual salary of $52,000 and $18,000 goes toward support staff. It did not mention the $10,000 payroll taxes in their $80,000 salary package.
Question to Susan Arpan of the City and Sherry Bijan:
Name one BID that pays salary besides Palo Alto.

Posted by anonymous
a resident of Duveneck/St. Francis
on Aug 6, 2007 at 8:35 pm

I feel sorry for downtown businesses/merchants having to put up with this. Let's benchmark with other cities and towns.

Posted by Casey
a resident of Midtown
on Aug 7, 2007 at 2:37 pm

1/ The Business Improvement District is an insult to Palo Alto. Instead of larding up the budget with salaries, they need to adopt a start-up mentality and operate lean and mean. Do they really need to spend $80,000 in staff salaries in order to allocate $63,750 in marketing, events and the Downtown Streets program? By any measure, the BID is not an efficient vehicle to allocate marketing expenses.

2/ If you want to know what the BID has accomplished, you can read their 2007-2008 Annual Report Online. <Web Link

I love their "cost-benefit analysis," where BID focuses only on the "cost" of the program. If you're going to offer a cost-benefit analysis, you have to include the BENEFIT. I'm not looking for some amorphous "benefit" that accrues to our downtown business owners, but defined, concrete numbers. How much additional sales is BID delivering to downtown merchants on event days for each buck it spends. They should poll the businesses and post the results on their website.

Posted by Alyssa
a resident of The Greenhouse
on Aug 7, 2007 at 6:09 pm

Casey is right. This but another local pork project which provides a salary for someone who doesn't do much real work. Read the Annual Report Casey links to. The lack of sophistication in this BID effort is truly astounding. The Annual Report reads like a Jr. High School club statement.

Posted by Albert
a resident of Crescent Park
on Aug 8, 2007 at 1:19 pm

BENEFIT? Has anyone heard of a member-funded organization that offers no by-laws and members are not allowed to opt-out? This PAD is full of nonsense.

Posted by David
a resident of Downtown North
on Aug 8, 2007 at 4:37 pm

In the article, Bijan said (sounded angry) "They don't have a leg to stand on. A BID is not a voluntary thing, by law they have to pay it."
Here is a letter to the editor in the Palo Alto Daily, August 3rd, from Robert N. Grant:
Dear Editor: (An open letter to the city of Palo Alto) As the co-owner of the law firm of Grant & Gordon, I would like to protest the annual imposition of the assessment for the business improvement district. Our small business derives no benefit whatever from this assessment. We were subjected to this tax without a right to vote on its enactment. This strikes us as taxation without representation at its worst.
If the city council believes this program is of general benefit, then the tax should be paid for from the general tax revenues.
If the council believes this program is of benefit to only a limited group and wishes to impose the tax only on that group, then it should give that group the opportunity to express its view of the benefit by voting on the tax.
Our previous objection has never been acknowledged by the city. Now we are told that of the $108,000 collected in business improvement district assessments last year, only $5,000 was targeted for downtown improvement, the remainder covering salaries and office expenses. This is quite an indictment of this assessment and you should be ashamed of yourselves for imposing this additional tax burden on your downtown merchants and professionals. Robert N.Grant, Palo Alto

Posted by Bye Bye Bijan
a resident of Green Acres
on Aug 8, 2007 at 6:22 pm

Sounds like Ms Bijan is another one of the "in crowd" in PA that does not have to worry about competence or malfeasance in order to keep their job (Harrison and Benest are two other names that come to mind).
This is another example of the terrible job that our mayor and city council are doing as far as the running of the city in a competent, well-thought out manner.
We need a good house cleaning at city hall and some of it's associated agencies.

Posted by mary
a resident of Downtown North
on Aug 9, 2007 at 12:31 pm

We paid because Bijan had threatened to turn our past due for collection and we were refinancing our house at the time. Pat is right, our BID stands for Business Intimidation District. Now we know only 5% of our money goes to the purported cause, we shall ask for a refund.

Posted by merchant N
a resident of Downtown North
on Aug 9, 2007 at 6:01 pm

We paid too, out of fear. Who can afford a bad credit?

Posted by Barbara
a resident of Downtown North
on Aug 11, 2007 at 6:54 pm

Mary asked what happened to the petition with 300 signatures presented at the council meeting to re-authorize the district on May 15, 2006.
In brief, the city rejected the signatures as invalid because the petitioners did not fill out the formal protest forms that were mailed to downtown business owners, according to city officials. (Palo Alto Daily, May 17, 2006).
In spite of verbal reports to the contrary, downtown business owners claimed they never received an official protest form from the city. (Palo Alto Daily, May 20, 2006).
In retrospect, more than a dozen merchants had attended the council meeting on May 15, 2006 and picked up the meeting agenda. The computer date stamp appeared on the meeting agenda indicated the agenda and the protest form were, in fact, printed on May 15th, 2006 and could not have been mailed earlier.
Even though some merchants and professionals did get their protest form this year; the process makes it a near-impossible task to un-do the BID, according to Pat's comment posted on August 5th.
From the beginning, the BID was ridiculous. There was no vote on creating the district, city council simply approved it. To blame some merchants and professionals who have chosen to stop paying their annual bills and sign petitions rather than file a formal protest against the district simply distorts the truth behind what is happening here !

Posted by amadcitizen
a resident of another community
on Sep 7, 2007 at 10:58 pm

You folks give me hope! We are small business people that invested in commercial property in our VERY small rural NW NJ town. Two years ago the town formed a BID - our's is structured purely on a tax to the property owners with the theroy that we can pass the cost to our tenants. Our town like many others is in shakey condition... massive illegal influx and big box competition has left us with many empty storefronts. With property taxes in NJ already being some of the highest in the country - this extra tax is a very harsh burden. We have some retail tenants like we are, we also have one service business and one wholesale distributor.... BID does NOTHING for them. We are in NO position to raise the rents on these businesses for fear that we will loose them. In our town - if you don't pay this TAX they can put your property up for tax sale - not just send you to a collection agency. The first year - the director they hired did nothing (but earned $65,000) and the board to whom he was accountable did nothing.... finally an outcry about his incompetance was loud enough that he was fired. Now they have hired someone 25 years old with no business experiance (for $60,000)and still we have no quantifiable results. Those of you that are fighting - fight on! We have been discouraged - there are a significant number of property owners that have signed petitions - but the town council doesn't care. The BID hired a consulting firm to conduct a survey to tell them what is wrong and how to fix it - the cost of this survey is WAY over $100,000.... And all we keep hearing is they need more time.... We fear being 5 or 10 years in and still having no results. Many are trying to sell - but the BID makes that harder too - because prospecive new buyers must be told that they will pay not just one tax but 2! We wish there were more towns that would fight... we wish there was legal help out there that could help fight.... Many are frightend of political retribution.... isn't that sad - taxation with out representation and intimidation methods - sounds like a great way to improve a town - right? We sunk our life into the property we bought in town... we loved the town - now we just feel sad and disolutioned.... so much for small business, small town, small investor American Dream stuff....

Posted by For the BID
a resident of Evergreen Park
on Sep 8, 2007 at 11:08 am

It is hard to know how many people actually are opposed to the BID because they write many times, anonymously.
How many are California Ave merchants who don't want the downtown to flourish. I am really asking. I will appreciate it if people would not flame me, and please write under your real names.

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