New City America

Fashion Backward:
Divide Continues in Fashion District; Area BID Could Be Split in Two

Los Angeles Downtown News / Downtown News
June 23, 2008 by Anna Scott

The business improvement district that operates in the Fashion District could be split into two separately managed sub-districts, the organization's leader said last week. The proposal is an attempt to keep the BID alive in the face of opposition from disgruntled members who want to break away and form their own group.

The Fashion District BID, whose employees do everything from clean the streets to help tourists with directions, is in jeopardy, as a group of property owners are fighting its renewal. The organization has a $3 million annual budget. Photo by Gary Leonard.

The Fashion District BID, whose employees do everything from clean the streets to help tourists with directions, is in jeopardy, as a group of property owners are fighting its renewal. The organization has a $3 million annual budget. Photo by Gary Leonard.
"Is it the best alternative? No," said Kent Smith, executive director of the Fashion District BID, formally known as the Fashion District. "The best alternative would be to approve the current management plan, but the board has to be realistic. It's better than no BID."

The nonprofit Fashion District BID coordinates street cleaning, marketing and other services for 90 blocks in the apparel industry-oriented, southern part of Downtown Los Angeles. After 12 years, it is in serious jeopardy of not being renewed in 2009, because dozens of property owners within the BID's boundaries are withholding their support of another five-year term.

The opponents, mostly longtime landlords who lease space to apparel industry tenants, say they have seen services diminish as the BID has expanded to encompass residential projects and large fashion houses. They hope to create their own business improvement district, the Garment District BID, by the end of the year.

To gain another term, the Fashion District BID needs the signatures of individuals who own more than 50% of the district's property before the end of the year. Because of the resistance, it has collected just 35%. The two sides have been deadlocked for weeks.

Smith said his proposal to divide the Fashion District offers a compromise.

"It gives them the smaller BID they want," while at the same time, "you can still maintain a lot of the economies of scale and coordination we've been able to achieve," he said.

Attorney Steve Barnhill, who represents the Garment District BID, said he would have to assess the proposal but was skeptical. "My suspicion is they're going to propose something that's not enforceable, so they'll have the renewal of the Fashion District and it will be business as usual," he said. Two separate BIDs makes more sense, he added.

"If we're going to divide the territory, let's do it."

Splitting Up

The Fashion District BID, formed in 1996, covers an area roughly bounded by the Santa Monica Freeway to the south, Seventh Street to the north, San Pedro Street to the east and Spring and Main streets to the west. All landowners in the area pay assessments based on the square footage of their property.

The BID's size has been a sticking point for Garment District BID supporters. While the Fashion District's Clean and Safe Program, which removes an estimated seven tons of trash from the sidewalks each day, has been successful, they say, residential projects and large fashion houses drain a disproportionate amount of the BID's $3 million budget and divert marketing efforts.

"They more and more are gearing their services toward the loft owners," said Saeed Farkhondehpour, a property owner in the area. "They're not taking care of the needs of the Fashion District itself."

The Fashion District opponents want to form their own BID with lower annual assessments and more targeted services.

Smith said having two BIDs would harm the neighborhood. "The world knows this as the Fashion District," he added. "Having one image and one brand for the district, we think, is very important."

The boundaries of his proposed sub-districts would mirror the preliminary borders of the Garment District BID, which are approximately Ninth Street to the north, the Santa Monica Freeway to the south, Stanford Avenue to the east and Main Street to the west.

Smith likened his proposal to carve up the Fashion District to Downtown's Arts and Industrial districts. The BIDs in those adjacent neighborhoods are separately managed but both overseen by the Central City East Association.

Garment District BID consultant Marco Li Mandri, who has helped assemble dozens of BIDs throughout the country, said the Fashion District conflict is unique and will not be easily fixed. He noted there was similar opposition by some property owners during its last renewal effort.

"For whatever reason, the issues weren't resolved. I think the only resolution is that there will be two districts," he said.

A First

Li Mandri and other BID experts say that the rift is unprecedented. Almost uniformly, established BIDs are renewed.

"I have not heard of any other situations like this," said Dave Feehan, president of the Washington D.C.-based International Downtown Association, which provides support to urban centers worldwide, including helping to establish BIDs. "With BIDs, the property owners really do get to say what goes on. If things aren't going right, they generally only have themselves to blame."

Brad Segal, president of the Denver-based consulting firm Progressive Urban Management Associates, which specializes in planning business improvement districts, said that the issues facing the Fashion District are more common in start-up BIDs than established ones.

For example, when the 270-block Downtown San Diego Partnership BID formed in 2000, a group of property owners in the traditionally Italian part of the area pulled out to form the Little Italy BID. Since then, the Partnership has seen little conflict, and was renewed in 2005 with "a huge percent of the vote," said the BID's president, Barbara Warden.

Other Downtown Los Angeles BIDs have faced growing pains, but none have reached the magnitude of the Fashion District-Garment District feud.

The Chinatown BID, which encompasses about 24 blocks, faced some resistance from older property owners in the area when it was formed in 2001, said Executive Director George Yu.

Nonetheless, that BID got the support of owners representing 59% of its territory when it was created, said Yu, and he expects an even greater percentage when its 10-year term expires in 2011. "Some of the older stakeholders who were not in support ended up being some of my most active board members," he said. "When they actually saw the work being done, their hesitancies went away fairly quickly."

The Historic Downtown BID, meanwhile, recently faced protests when its board of directors proposed expanding the 25-block district by a few blocks in 2009. While the BID is settling the conflict, said Executive Director Russell Brown, the district still collected signatures from owners with 60% of the district's property in only three weeks and is moving forward with renewal.

Carol Schatz, president of the Downtown Center BID, said the Fashion District predicament "is the most serious questioning of the existence of a BID" in the area.

In the coming weeks, Fashion District staff will hash out the specifics of their proposal and prepare two management plans for the potential sub-districts, said Smith. Then, they will hit the streets again to gather petition signatures.

Smith said the door remains open for further negotiations with the Garment District group.

"We think that it's in the interest of everybody to work together," he said. "Whether there's two BIDs or one BID, it's more important that there's a coordinated approach to the renewal."

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