NEIGHBORHOODS: Downtown Crossing effort hits $1m snag. Big properties reject improvement group fees.

Some of the largest property owners in Boston’s Downtown Crossing are refusing to help fund a new organization created to improve the downtrodden shopping district, erasing about 25 percent of its budget for stepped-up maintenance, aesthetic upgrades, and public festivals.


The organization, known as a business improvement district, was approved by the City Council in August after dozens of business owners asked for permission to join together and pay extra taxes to help revitalize their neighborhood.


While more than 80 percent of the area’s property owners have signed onto the effort, the few holdouts own many of Downtown Crossing’s largest buildings and were expected to provide about $1 million in annual funding. Instead, they have notified the city that they will not participate, punching a large hole in the budget and angering Mayor Thomas M. Menino.


“It’s a little selfish,’’ said Menino, who has made revitalizing the historic shop ping district one of his top priorities. “To me, it’s not being a good neighbor.’’


The property owners declining to participate include Equity Office Properties, which owns five large buildings in the neighborhood, and Tishman Speyer, the New York real estate giant that owns One Federal Street, one of the area’s tallest office towers. Also refusing to join are three McDonald’s restaurants in the district and entrepreneur Steve Belkin, who owns an office building at 133 Federal St. and previously proposed construction of a 1,000-foot tower there.


Their refusals highlight a major snag in the effort to create the city’s first improvement district and to replicate it in other neighborhoods around the city. Unlike other states with such organizations, Massachusetts allows businesses within the district to opt out of paying the fees to support it. While those firms can still benefit from the improvements the organization provides, they do not have to share the financial burden.


“We’re the only state that does it this way,’’ said Rosemarie Sansone, executive director of the Downtown Crossing Partnership, a business association that has been organizing the effort. “I don’t think it’s fair that some people can opt out and others still meet their obligations and take responsibility for providing these resources.’’



The state’s law was passed during the administration of former governor William Weld. A spokeswoman for the Equity Office declined to comment, as did a representative of Tishman Speyer. Belkin did not respond to phone messages. Attempts to reach the Napoli Group, a franchisee who operates two of the district’s McDonalds, were unsuccessful.


Downtown Crossing supporters have been particularly motivated to spruce up the area. The district, already suffering from years of declining activity, is pockmarked with empty storefronts that have invited petty crime and graffiti, discouraging new companies from locating there.


The stalled redevelopment of the Filene’s building has also hurt, leaving a massive construction crater in the heart of the district as well as the prolonged closure of Filene’s Basement, which had made the area a destination for shoppers and tourists.


Sansone and other supporters of the Downtown Crossing organization said they are not yet sure how they will compensate for the loss in funding, which will cut the annual budget to about $3 million from an anticipated $4 million. Several small businesses have also balked at paying extra for the improvement district.


Organizers are trying to pay for an array of enhancements, including daily cleaning crews, stepped-up graffiti removal, and uniformed “ambassadors’’ to help direct tourists. The new group would also publish promotional materials, plan music and arts festivals, and devise standard lighting, landscaping, and other design elements to improve the area’s appearance.


The work is scheduled to get underway next spring. It will be paid for through an annual fee levied on commercial property owners within the boundaries of the district, which covers a large grid of streets from City Hall to Chinatown and stretches east to Congress Street. Property owners will pay $1.10 per thousand dollars on the first $70 million in assessed value of their holdings in the district and 50 cents per thousand dollars beyond that limit. Residential owners are exempt.


“We’re looking at the budget right now in terms of what services we’ll be able to deliver,’’ Sansone said. “It’s important to have as many property owners as possible engaged in what we’re doing.’’


She and others said Equity Office Properties, by far the largest of the holdouts, has shown interest but has questioned whether the firm should be included in the improvement district because many of its buildings are on the fringes of Downtown Crossing.


Many other large companies have already agreed to pay the fee and are helping to manage the improvement district. Among them are Bank of America, State Street Corp., Fidelity Investments, Macy’s, and the Druker Co., a real estate firm that owns several buildings in the area. A multitude of smaller businesses are also participating, from hair salons to cafes to jewelry stores.


Many business owners and city officials said the improvement district is a way to take matters into their own hands.


“I personally believe this is the beginning of the resurgence of Downtown Crossing,’’ said City Councilor Bill Linehan, chairman of the council’s economic development committee. “Once people see this work begin, I think it will only encourage others to participate.’’


Casey Ross Boston Globe November 8, 2010