Podcast - Soul of the City: How Ward 8 Built Washington, D.C.'s, Newest BID

Kyrus Freeman: Welcome to this episode of "Real Estate Law Unlocked." My name is Kyrus Freeman. I'm a partner in the D.C. office of Holland & Knight. I am joined today by Monica Ray, who is a president of the Congress Heights Partnership and the founder of the Soul of the City BID. Thank you for joining me today, Monica. 

Monica Ray: Thank you, Kyrus, for having me.

Kyrus Freeman: Well, today we're going to talk a little bit about the District's newest and certainly very exciting BID. It's called the Soul of the City BID. Monica, kick us off a little bit, tell us a little about what a business improvement district (BID) is, its boundaries and how this BID came about.

Monica Ray: Sure. Thank you again for having us. Really excited to talk about lucky number 13, Washington, D.C.'s, 13th BID. The Soul of the City BID encompasses three primary neighborhoods in Ward 8: Congress Heights, Washington Highlands and Bellevue. I'd like to start with this kind of demystifying some of the things about an improvement district.

People often think that BIDs emerge because people want them. That's only partially true. BIDs only become possible when the economics, the ownership patterns and political conditions are mature enough to sustain one. Many people have heard me talk about for the past 10 years that we've worked on this BID. In 2014, we did our BID exploration, and what we quickly found was there was not enough taxable properties in our district to support BID operations. And our pivot at that point was to create the Congress Heights Partnership, which was designed to act as a BID-like organization in that we managed the clean, the safe and the activation in the commercial district, but we did it without a guaranteed tax revenue stream. We depended deeply on voluntary contributions to the BIDs to do this work. And over the last 10 years, we spent that time having conversations with stakeholders, talking to potential rate payers, building trust amongst the communities, digging really deep into the residential approach to how a BID could be successful and, of course, doing a lot of line drawing to get to the right mix of properties that made the BID sustainable. But the big piece about a BID is it's not just a visioning tool, it's a financing mechanism. The BID guarantees a guaranteed stream of income that's designed to reinvest back into community. Our BID is comprised of 176 taxable properties. 121 of them are commercial entities, and about 55 of them are residential units, five units or greater, that pay a flat rate of $120 per year per unit. Our tax structure is based on 18 cents per $100 of value. That formally is applied across the district, and those tax bills go out when your normal real estate tax bill goes out twice a year in April and September. That's how revenue is generated. The BIDs have the flexibility to do other things as well, other fundraising, sponsorships, grant writing. The things that some nonprofits can do, BIDs can also do. The BID is not set up as just charitable, but it's really about how we support commercial corridor. All BIDs, traditional BIDs do the same thing: clean, safe and activate. We like to take advantage of that – clean, safe and activate – and think about how we can use the leverage of a BID and that guaranteed tax revenue to truly drive human quality of life impacts for this community. These communities have, although historically, very close to one another, they've been commonly disinvested and commonly disconnected. So our BID was designed to really bring those historically disconnected communities together under a planning umbrella. They gave the infrastructure for community development.

Kyrus Freeman: So two things. One, you just eloquently described a BID, and it seemed as though you've been the president of a BID for a long time, but I know we first worked on a project maybe 10 years ago, and I know you've been doing this work for a while time. What was the trigger? How did we get to the point to say, OK, this should now officially become a BID?

Monica Ray: I like to call it just maturity. I think for years, this community has been full of aspiration, but we really didn't have that sufficient market traction. Over the last 10 years, there's been substantial investment into this part of the city. When you think about what has happened on [St. Elizabeth's East] campus, more than a billion dollars of investment has been dropped in Congress Heights, in the heart of Congress Heights. When you think about the projects that you and I worked on a decade ago, this community has become the darling of places to develop right now. The city's investment in St. E's was just a spark that we needed to really catalyze investment in this part of the city. So over the last 10 years, we've been able to look at that development pipeline to determine when and where activity was going to happen and then organize around that activity. So I like to say that it's really when the market plus politics plus community come together at the same time. And that's when the BID makes the most sense. And for us, that is now.

Kyrus Freeman: So market plus politics plus the community coming together. What were some of the challenges from a land use/real estate perspective? Was it the investment piece? Was it the regulatory piece? What, if anything, kind of took a little bit more effort?

Monica Ray: So I came to Congress Heights in 1993, and some of the same challenges that operated then still exist. So none of these answers are probably novel ideas, but I think we face just overall skepticism about who to trust, when to trust. I think there was planning fatigue. We've probably been the most planned communities in Washington, D.C., with very little outcomes from those plans. Historic distrust from disinvestment. There's always concern about displacement, uncertainty about assessments of property value. And I think finally, it's just a fear of what people think about this downtown style of governance models. This work for me began well before place-based development was even a concept, or at least it wasn't named that. And I think there are fears in this community about how we lose ourselves in the process of developing community. So I think all of those things were the challenges that we faced when we started to really truly organize around this BID, but our job was 10 years ago – and it probably still is – is to somehow prove that this BID is not an extraction from the neighborhood, but a reinvestment into the neighborhood. And our first piece of evidence is in the petition gathering process for a BID, we have to have 51 percent of the valued owners in the district and 25 percent of the number of businesses have to sign on. And those people vote to tax themselves because they're committed to reinvesting into the community. That's our first step. And I think that first step helps us to tap down all the other list of challenges we have as we organize.

Kyrus Freeman: I'm going to challenge you a little bit because I think the first step is actually strong, committed leadership, that people can cast a vision and people can participate in that vision. And I would suggest that you are a part of that strong, committed leadership that actually can cast the vision for people to say, hey, I want to get on this train and work through 10 years of twists and turns and ups and downs to actually see this thing through.

Monica Ray: I was really, really fortunate when I landed in Washington, D.C., fresh out of college, to meet some people who were community champions then. And this being 30, almost 35 years ago. But I think about people like Phinis Jones and Mary Cuthbert and Teresa Jones and Robert James and James Bunn. These were people who were fighting during a time when nobody was fighting for this part of the city. And they trained me and helped me understand how important community transformation is and can be. So I give all the credit to those people, and I just hope that I'm able to live up to their foundation they've set for me.

Kyrus Freeman: So, in that vein, what does living up look like? What do you see as the future or success for the BID?

Monica Ray: Good question. Success, of course, looks like all the things that we think about, you know, property retention, taxes going up, new businesses being attracted. But I think ultimately, success for us really is when we get to a point where we have enough organizational power to shape our investment instead of just reacting to it. This community has been the place where we have been acted upon. We have been developed through rather than with. So I think as we build power, that we're able to really shape what happens in this community, I think that's the ultimate benchmark for success for us.

Kyrus Freeman: I think that's awesome. What are some lessons? It feels like you could write a book and take this experience and share it with others to help them start BIDs, grow BIDs become more either sustainable in terms of how they operate their BIDs, or even get a BID up and running. Any thoughts or words of advice for other BIDs for folks thinking about starting a BID?

Monica Ray: I think the biggest lesson for me has been the intestinal fortitude that you need to get through this process. Because I had worked in this community for so long, I very naively thought that this would not be as heavy of a lift as it has been. I had walked these streets, lived in this community, gone to church here for almost three decades. And there were people that I talked to every day that I did not know they didn't own their building. Whenever we did an activation, I'd go to them and say, can we do this? And they'd say, sure. And we'd go down our path and we'd do whatever. And some amazing things have happened over the 30 years I've been here. But when we got ready to get owners, I was surprised by the number of people who had been in buildings for decades who didn't have ownership. And our lift became trying to find these people who had been gone from the city, moved to California, wherever they were. And they were not necessarily as connected to the process as the people who were living and breathing and operating buildings every day. So trying to convince the third-generation property owner in California, whose father may have owned Martin's Cafe for 40 years, that they should now reinvest this community, was a much harder argument than it would have been for her grandfather. And that's where we found ourselves. Trying to show that corridor confidence and small business survivability and increased pedestrian activity is really, really important. Or that we were going to spend your resources, making sure that the public realm was clean, that we're coordinating other investors. So, reducing that fragmentation across the community is an important task, but it did not necessarily translate to displaced or foreign owners in our community. So it took some stick-to-it-ness and time to nurture those relationships to really build an opportunity to get to the finish line. So the petition process was one that required us to do far more outreach, deeper outreach and spend a lot of time massaging relationships to get to the end. So it takes stick-to-it-ness more than anything else.

Kyrus Freeman: Because I wrote down, you said there are 176 properties. So that's a lot of folks you got to engage with.

Monica Ray: Absolutely. You know, there's a growing BID brand happening, and oftentimes the boundary becomes a very contentious conversation. Boundaries like ours, for instance, cross multiple communities. And in Washington, D.C., the community concept is a very strong concept. And how do you find ways to string those together in a way that makes sense? Trying to make sure that we have a boundary that's broad enough that generates the right income to support it, but also that's not so broad that it dilutes the community or the brand. So we've been very, very conscious in this conversation that although there's a Soul of the City brand that represents all three communities, each one of our communities has its own separate sub-brand because we want to make sure that the communities understand that their history, their legacy is not being diluted in any way. So it's an important little delicate dance between broad enough to be sustainable, but yet now enough to maintain that autonomy and that individuality that comes with communities in D.C.

Kyrus Freeman: So Soul of the City, and I'm going to ask you, how'd you come up with that name? I'm curious to know that. It's the overarching brand, but then there are different communities within that brand.

Monica Ray: Yes. So, I talked a little bit about how we made this pivot back in 2014 when we realized that we could not support a BID. We created the Congress Heights Partnership, and the first thing we did, we realized that in most of the city's advertising documents, Washington, D.C., as an advertisement, pretty much cut off right below Capitol Hill. If we were lucky on some days, they might mention Anacostia, and they would think about Anacostia as being everything across the river down to Maryland. And we wanted to make sure that everybody knew that Congress Heights, Bellevue and Highlands were communities in and of themselves. And we brought in a consulting firm to help with the brand. And she did a series of about four months of community interviews. From the old-school stakeholders to brand-new implants. And we did a community charrette. And in that charrette, she did an activity that I will never forget. It was called postcards from the future. And she had residents to literally mail themselves a postcard from a community that they could envision 20 years into the future. And the thing that showed up most often was how people felt like true, authentic Washington, D.C., lived in this part of the city. This is where the soul of the city truly was and where it should always be. And we were in this constant fight for the soul of the city, and that's how the name happened. So it was a community brand at first, and then we expanded it and it became the name of the BID, ultimately.

Kyrus Freeman: Well, Monica, that was an awesome, awesome story. And this has been great. This has been great for us to just rehash how place-based investment actually takes a lot of work. It takes a lot of effort, leadership, input. One last question. I know you didn't do this all by yourself. What does your team look like in terms of what's done?

Monica Ray: I'm glad you asked that question. We were extremely fortunate to be championed by a group of volunteers for almost 10 years. I mean, it's almost unprecedented to see people show up as this group did, but it was led by a guy you've probably heard of, his name is Richard Bradley. And Richard's probably the godfather of BIDs in Washington, D.C., creating the downtown BID, but has expanded his wings and is doing things both across the region, across the nation and internationally now. But Rich joined us as a consultant back then, a volunteer consultant, I think his contract is for a dollar a year, I think. But he was the person who gave us all of the initial foundation around our approach to BID formation, our approach to place-based development. But as important is he brought along a cast of characters that have stuck with us.

Georgetown University came on their urban planning studio, and we've had teams of students of urban planners and law students who have been [in] our R&D division for the past 10 years, led by Uwe Brandes. He brought along Jeannette Hanna who has been our brand and marketing expertise from a company called Trajectory. She's also the mother of the brand for the cherry blossom. Otto Condon as a planner and architect. And he also brought, we met at Georgetown, a young man named Landis Masnor, who was an urban planning student when we met. Landis has now graduated, started his own urban planning development company and is still with us. And he has been the master of the application, the thousands of spreadsheets, the thousands of maps we had to create to get to the final map. So there's an entire crew of people who've been with us for a long, long time. And then we have our newest and first employee, a young urban planning master student at the University of Arizona named Vaughan Butts, who we have chosen as our first employee. So everything from 10 years to one day, we're excited to have all of them to help this happen.

And then you can't forget community. One of the most important parts of this conversation has been the community members who've stepped up to help champion this effort. They've asked their neighbors to sign on. We've had block captains that not only signed their petition, but got their neighbors as well. So it's a huge lift, and I'm so appreciative to all of the people who jumped in to help us. My last help comes from the downtown BID. You know, there's 12 other BIDs, and the downtown BID has become the big brother that I never had. Gerren Price has been amazing in his generosity of time to talk to me and to help answer questions. He's lent his staff expertise to me. To help answer questions that we approach on boarding and developing our first executive director (ED). So I have to always thank Gerren for his undeniable support through this process.

Kyrus Freeman: All right, well, this has been another episode of "Real Estate Law Unlocked." I'm Kyrus Freeman, and we just had a great conversation with Monica Ray, the president of the Congress Heights Partnership, founder of Soul of the City BID. It's been a wonderful chat, and look forward to seeing you and the BID continue to be successful.

Monica Ray: Thanks, Kyrus.