Community Benefit DistrictsJuly 25, 2016
With a team of three State Senators and three State Representatives negotiating the final version of the Economic Development bill, it is worth looking at an important item that could make its way into Massachusetts law: Community Benefit Districts (CBDs).
The Massachusetts Smart Growth Alliance has made passing Community Benefit Districts one of our top priorities because it addresses a unmet need: with smart growth and walkable areas booming, how will communities manage these vibrant places?
Community Benefit Districts (CBDs) can be a solution.
The CBD proposal empowers communities to solve their own problems based on their unique characteristics. Some examples of how it could work:
- A downtown district that cleans snow from the sidewalks, empties trash receptacles every day, provides extra security, landscapes and maintains plantings, manages special events, works with agencies to improve transportation, implements a shared valet parking program for restaurants, recruits new businesses, and identifies possible locations for affordable housing.
- A cultural district (like a Little Italy or Chinatown) that provides cultural programming and art, offers outdoor seating, tells the story of the neighborhood families through plaques and banners, helps develop design guidelines that accentuate the unique character of the neighborhood, works with property owners to support family businesses instead of chains, works with other cultural communities across the region and even internationally to strengthen and renew the heritage of district, and attracts new entrepreneurs and investment from that cultural group.
- A Main Street CBD that markets itself as a destination for visitors with a website, events, and social media, manages a farmer’s market, provides technical assistance to small businesses, helps the municipality review new development proposals and develop rules to encourage food trucks, and raises funds for small plazas and a new dog park.
- An arts district that creates a way for artists to directly participate in managing public spaces, organizes festivals, supports public art projects, and works with property owners to develop long-term affordable live-work spaces for artists so that they do not get pushed out by rising prices.
- A series of suburban town centers connected by a shuttle service, with shared regional marketing and coordinated events.
- A historic district that develops maintenance plans for aging structures, implements painting or other improvements on a regular schedule, repairs and manages neglected properties, hosts events, researches, documents, and preserves local history, coordinates works with tourism boards and historic sites, and integrates the story of the community in contemporary development.
The fact is, local governments need additional capacity to develop and manage busy areas like downtowns, Main Streets, and village centers. These special places need extra services (such as cleaning, branding, cultural programming, landscaping, supporting local businesses, etc.) that the municipality cannot provide.
Community Benefit Districts (CBDs) can help solve the problem by establishing a local public/private/nonprofit partnership managed by a 501c3 nonprofit, which could be either an existing organization or a new one.
To establish a CBD, a community would work with local property owners to develop a management plan and assess themselves a fee (like a condo fee) to pay for implementing the plan. The private and nonprofit property owners, municipality, businesses, and the community at-large would oversee the nonprofit management organization, and could dissolve it if desired.
CBDs are similar to Business Improvement Districts (BIDs), but offer advantages that could make them more attractive to many cities and towns.
For example, Community Benefit Districts:
- Explicitly require the engagement of residents, nonprofits, and municipalities in addition to private property owners and businesses;
- Are easier to establish and dissolve even while increasing public accountability and transparency;
- Do not require districts to be renewed every five years;
- Must be managed by a 501c3 nonprofit organization;
- Require a Memorandum of Understanding with the municipality to prevent privatization of municipal services;
- Offer a streamlined process for amending the district boundaries and management plan;
- Allows a ramp-up period of up to three years;
- Includes protections for small property owners, such as a cap on representation by large property owners when forming the district;
- Provide communities tremendous flexibility in terms of services, governance structure, and revenues to accomplish their goals;
- Bring districts in line with state nonprofit oversight; and
- May link multiple districts or municipalities.
The Massachusetts Smart Growth Alliance has spoken to groups across the state who have already expressed an interest in learning more, including from cities and towns as diverse as: New Bedford, Lowell, Worcester, Boston, Andover, Salem, Somerville, Plymouth, Beverly, Melrose, Cambridge and Lawrence.
Supporters include: Massachusetts Municipal Association, Massachusetts Smart Growth Alliance, MassCreative, Springfield Chamber of Commerce, Worcester Regional Chamber of Commerce, Western Massachusetts Economic Development Council, Cambridge Chamber of Commerce, and LOCUS: Responsible Real Estate Developers and Investors, among others.