BID letter 

BAGLEY ACQUISITION CORPORATION
800 Michigan Building
220 Bagley
Detroit, Michigan 48226
(313) 963-5270
Fax: (313) 963-7727

To: Curt Guyette, Metro Times News Editor
From: Anthony V. Pieroni
Date: October 13, 2003
Re: "Taking Care of BIDness"

Your report on the proposed BID is the most comprehensive and accurate that I have read to date ("Taking care of BIDness," Metro Times, Oct. 8-14).

Bagley is the owner of two office buildings, a parking garage and a surface parking lot within the BID area; the original BID area that was published in April, 2003 did not include my real estate, and for some reason unknown to me the BID area was later expanded to include it.

The BID, if passed, is going to be a monumental failure. The money to be raised annually when applied to the cosmetic work alone to be done in the BID area is like putting a Band-Aid on somebody who has been mauled by a grizzly bear. For example, a couple of the stated purposes of the BID are to make sure that the sidewalks are shoveled in the winter, and the graffiti is removed. The $3 million annual assessment is not sufficient to clean a fraction of the sidewalks in the BID area, or remove a fraction of the graffiti. The stated intent of the BID promoters is to address problems in the "high-traffic" areas initially; that means the heart of the Central Business District, including Compuware and General Motors, two high-profile proponents of the BID whose voting rights were skewed in their favor and against smaller property owners as you correctly pointed out, will receive the bulk of the services. Also, several large landowners’ assessments are capped, GM’s I believe, at $250,000. So, they get a higher proportionate vote than their financial commitment would otherwise permit.

Because I have my sidewalks plowed before 7 a.m. after each snowstorm, and because I cause the graffiti from my own buildings to be removed periodically, I suggested to Downtown Detroit Inc. that in lieu of paying a BID assessment, property owners should be permitted to submit certified copies of paid invoices for work which the BID proposes to handle, but which of course it cannot with the limited funds available. I got a negative response.

One of the reasons the BID will fail is because there is no reasonably effective method of collecting assessments. While it is true that the BID will have a lien on landowners’ property for non-payment, that lien does not have the status of a municipal tax lien. That means that if a lien is imposed, it is subject to all existing mortgages and liens, including those for unpaid municipal and county taxes, and because there is so little, if any, equity in most downtown Detroit office buildings, there is little likelihood that the BID can economically collect unpaid assessments from landowners. It will interesting to see the number of landowners who don’t keep their City of Detroit and Wayne County taxes current, and if those aren’t current, what makes the BID proponents think that landowners are going to pay a significantly junior BID lien for non-payment.

The most laughable aspect of the proposal is to hire a bunch of "ambassadors" to stand around downtown Detroit and welcome visitors to the Central Business District. Supposedly, they are to act as the eyes and ears for the police department and are supposed to create a positive image for the Central Business District. Well, nobody is in downtown Detroit that doesn’t have to be there, and if they are there, they generally know where they are going and don’t need directions, or handholding. These "ambassadors" are also supposed to help keep derelicts and homeless people from bothering visitors. Well, I don’t know how they are going to do that, since somebody can be passed out dead drunk on the sidewalk and the police absolutely will not respond because they are understaffed and have more urgent business. The first "ambassador" that tells a panhandler to move elsewhere is probably going to be assaulted.

Downtown Detroit does not need more taxes, imposed not by the municipality, but by big business.

Peter Conkey’s (he’s the owner of the Buhl Building) comments were right on. He’s going to pass the $65,000 annual tax on to his tenants, who will probably be financially able to pay the costs, but there will be a few who will claim that it’s the straw that breaks the camel’s back and will move to the suburbs like the legion of former Detroit tenants who have done so. Many downtown office buildings will not be able to pass on the BID assessment to their tenants.

From the research I have done, BIDs which have been successful in other parts of the country cover relatively small areas of dedicated, financially capable real estate owners who wish to supplement city services. Here, there is very little money from the city that goes into downtown Detroit, certainly not for snowplowing sidewalks or cleaning off graffiti, and the BID’s attempts to take over what should be an entirely governmental function is going to fail in Detroit because of Detroit’s economic condition, the size of the BID area, and the enormous amount of controversy in opposition to the BID which is not reflected either to the public, or in your article, because of the fact that the BID was supposedly passed by the extraordinarily highly weighted votes of GM and Compuware. There are few city services to supplement. I’ve heard several rumors that there will be litigation over the BID if it passes.

Another disaster for downtown Detroit.

Sincerely,
Anthony V. Pieroni

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