by Pete Mazzaccaro

About 12 years ago, business leaders in Chestnut Hill, faced with stiffer competition from suburban shopping centers and the early boom of online retail, decided to organize and develop a new strategy to make things better on Germantown Avenue.

The decision reached and ratified in 2004 was the Chestnut Hill Business Improvement District – an institution created by city legislation that allowed the district to collect a property assessment from all properties in the district in order to raise funds for everything from bicycles for Chestnut Hill’s bike patrol officers to hanging lights on trees for the holiday season.

That initial BID encompassed 190 properties, mostly on Germantown Avenue, and generated an annual budget of $240,000.

The decision was one that has paid off in many ways. In addition to strengthening longstanding Chestnut Hill events like the Garden and Fall for the Arts festivals, the BID points to strengthened partnerships with Chestnut Hill College, Chestnut Hill Hospital, Woodmere Art Museum among others. It points to a successful four years of marketing and retail recruitment. Vacancies, according to BID executive director Martha Sharkey, have been reduced from 20 percent to 11 percent. The BID has also worked to make the successful Harry Potter weekend a growing event.

Its mission has been to be sure that a steady stream of funds is available to advance the Avenue, and on many points it has succeeded.

This year, however, the BID is up for renewal, and to grow its revenue stream from $240,000 to $320,000 it is looking to expand its boundaries, particularly up and down many unit blocks on either side of the Avenue, along Bethlehem Pike and Winston Road. If approved, the BID will grow from 190 properties to 281.

Properties that fall in the district will be assessed based on a formula that calculates the property’s assessed value against the proposed BID budget. That budget will have limits placed on it so that it can’t change drastically from year to year.

The expansion, BID leaders say, was necessary.

“A lot of our revenue streams have disappeared as the economy has changed,” said Seth Shapiro, who has been the BID board’s president for the last four years.

Those funding streams came from numerous sources – from federal and state grants to the Chestnut Hill Business Association’s health insurance program, a program in which the CHBA acted as an insurance broker for its members that has seen many leave for other vendors.

The BID, Shapiro said, needed to grow, and it made sense, he said, to grow its boundaries. After all, it was only fair.

“When the BID was initially created, some portions of unit blocks and commercial nodes ancillary to Germantown Avenue were included, and for whatever reason, some were not,” he said. “Likewise, a property on the Avenue was assessed when one around the corner might not be. The BID board felt that there was not a commensurate difference in the benefit derived by those properties from the health of the Avenue. It seemed more equitable to have all of the immediately proximate properties share in supporting the BID activities. We considered whether there was a difference in how various properties benefited, but ultimately the board decided that those differences would be reflected in a difference in property value as well.”

The BID board believed that its work to enhance the retail corridor clearly added value to the surrounding residential properties.

“People live here because of Germantown Avenue,” Shapiro said. “My wife and I moved here because of it. We chose this neighborhood because we can walk.”

It’s not hard to see Shapiro’s point in real estate marketing for nearly any home or apartment in Chestnut Hill. Germantown Avenue and its “Best of Philly”-winning shopping experience is in countless advertisements and home listings. It’s a selling point.

But not all residential property owners agree that the BID is worth an additional expense.

Many of the unit blocks in the southeastern portion of the BID expansion, from Woodale Road and Willow Grove Avenue to Benezet Street and Springfield Avenue, are dotted with homes owned and rented by the George Woodward Co. The company, founded by its namesake in 1921, owns and rents 150 homes in Chestnut Hill.

But in an interview with company president Stanley Woodward and board member, Florian Schleiff, the BID’s expansion is an expensive hardship it’s not willing to endure.

“We currently pay $4,500 for five properties on the Avenue,” Schleiff said. “Under the proposed expansion we will pay $22,000, an increase of $17,500.”

In a prepared statement, the company said:

“We are willing to continue to pay our assessed fee for our five commercial properties on Germantown Avenue, as before, but are absolutely opposed and refuse to pay additional assessment fees for any residential units, which we continue to maintain to the high quality standards and the happy environment of our tenants who form an important minority of Chestnut Hill.”

Woodward and Schleiff said their needs were different than those of the businesses that receive a much more direct benefit from expenditures on marketing, security and physical improvements.

“We spend $100,000 a year on improving the public space,” Woodward said, pointing to $65,000 last year spent on taking care of street trees. The company also maintains sidewalks and several parcels of land in the lower hill owned by the city.

Schleiff said the BID would also reduce the property value of every residential home in the district. Even though primary residents do not have to pay fees, if they rent out space – a room or a whole home – they must then pay an assessment. Schleiff said the value loss would be between $5,000 to $8,000 for each property.

“We have been stewards of Chestnut Hill for many years,” Woodward said, pointing out that it was the Woodward family that donated Pastorius Park to the city. “We have been maintaining the lower Hill and have done everything we can to improve business here and the neighborhood.”

While the BID legislation has already had a round of public input and a hearing before City Council, the process is not over. The BID is hosting a second “open house” to discuss the district at the Woodmere Art Museum on Wednesday, March 12, from 6 to 7:30 p.m. A second public hearing before City Council is scheduled for Friday, March 28.

City Council has the final say on whether or not to pass the legislation that will continue the district another 10 years. If owners of 51 percent of the assessed properties object in writing, however, the bill is automatically defeated. Woodward company owns 30 to 35 of the new properties assessed, but it is not the only landowner to object. Several other property owners have voiced their concerns with the BID in public hearings and will likely continue to do so at the next two public hearings.

In the meantime, Sharkey said that she welcomes input from anyone in the neighborhood and has information to share for anyone who might be concerned.

But again, she believes that everything the BID does that’s good for the Avenue is good for Chestnut Hill.

“The more we do, the more we get Chestnut Hill featured in the news and bring them here for events, the more people want to be here,” she said. “ People will come here for an event, see how vibrant the district is and say, ‘I’m moving here.’ I think we have a big impact that goes beyond the Avenue.”

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