Attorney and downtown property owner Alan Scheinman not only thinks that the proposed Northampton Business Improvement District (BID) is a bad idea, but believes that the Northampton BID petition does not meet the requirements of Chapter 40O, the state legislation that enables the creation of BIDs. He maintains that the BID petition should not have been approved by city clerk Wendy Mazza and by city assessor Joan Sarafin, and should be rejected by the City Council.

There are three rules that define a valid BID petition: one, a BID must be "a contiguous geographic area with clearly defined boundaries in which at least three-fourths of the area is zoned or used for commercial, industrial, retail, or mixed uses." Two, the BID petition must contain "the signatures of the owners of at least 51 percent of the assessed valuation of all real property within the proposed BID." Three, these signatures must represent "60 percent of the real property owners within the proposed BID." BID insiders refer to these as the 75 percent rule, the 60 percent rule, and the 51 percent rule.

Before any public hearing, the city clerk (or her assignee) must verify that the BID petition meets these three requirements. At the public hearing, the City Council must also determine if the BID requirements have been met. According to the law, "the local municipal governing body shall dismiss the petition" if it appears that the petition is not in conformity with the provisions of Chapter 40O.

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Does the BID map encompass a contiguous area that is zoned or used for commercial, industrial, retail, or mixed uses? Scheinman maintains that since 27 percent of the BID area (including the Smith College neighborhood) is zoned as "URC," or Urban Residential, the statutory requirements of the law are not met.

In the wake of Scheinman's questioning, Director of Planning and Development Wayne Feiden on January 8 issued a letter to the city clerk stating that "99.8 percent of the BID is zoned for or used for commercial, industrial, retail, or mixed uses, far more than the required 75 percent."

The Advocate asked Feiden to explain: If 27 percent of the BID map is zoned for residential use, how can it be construed that the 75 percent rule has been met? "The URC district is zoned for mixed-use and some business uses, and therefore is in accordance with Chapter 40O," he replied. "The fact that the uses require a special permit does not make the area any less zoned for mixed-use."

Scheinman takes issue with Feiden, and has filed an objection with the city clerk. "No Commercial, Retail, Industrial, or Mixed use is allowed by right in the (Urban Residential) C zone," he wrote in a memo to the City Council. "Only two types of businesses are allowed in the URC zone by special permit from the Planning Board. They are funeral establishments and businesses related to junk cars/motor vehicle accessories/scrap metal. To the best of my knowledge, the Planning Board has never issued a special permit to allow any of these businesses in the URC zone. The very small number of businesses, if any, within the zone were 'grandfathered' and not subject to the zoning law. And those few businesses, if any, make up such a small part of the URC portion of the proposed BID that their existence doesn't correct the failure to meet the 75 percent requirement."

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Massachusetts General Laws Chapter 40O states that a BID petition must contain "the signatures of the owners of at least 51 percent of the assessed valuation of all real property within the proposed BID and 60 percent of the real property owners within the proposed BID."

What does this mean? Well, it depends upon whom you ask.

"The city should make a list of property owners, and determine whether 60 percent of those owners have signed the BID petition," Scheinman told the Advocate. "One signature, one property owner. What they have done instead is made a list of parcels and said 'one signature, one parcel.' This gives them a clear advantage. You've got the city of Northampton's assent being counted 15 times. You've got Smith's assent being counted five times. This is not what Chapter 40O stipulates. It should be 60 percent of the owners, not 60 percent of the parcels."

Indeed, the stack of signed assent forms revealed at least five signatures from Smith College's Ruth Constantine and at least 18 from Northampton Mayor Mary Clare Higgins. Skera's Harriet Rogers signed once for 221 Main Street and once again for the basement of 221 Main Street. Condo owners were signing once for their residence and once again for their garage.

Which standard was the city actually using in evaluating the BID petition's compliance with the 60 percent rule: one-owner-one-signature, or one-parcel-one-signature? And what about Scheinman's other assertions—that the assessor's office never checked to see if the signatures on the BID petition were actually those of the owners of the property, and that many of the signatures on the assent forms were illegible? (The assent forms did not require signers to print their names.) And who, specifically, did the math to determine that the 60 percent and 51 percent standards had been met by the BID petitioners?

The Advocate hit the trail early last Thursday morning for a visit to City Clerk Wendy Mazza's office. "I can't tell you how the 60 percent determination was made...and I did not do the calculations to verify the BID petition," said Mazza. "You would have to go over to the assessor's office for that. The assessor's office did the BID verification. All we did in this office was to make sure there was an assent form for every parcel that the assessors had certified. The assessor's office generated an official list of property owners in the BID. The BID committee went around collecting signatures. On December 8th, the signatures were presented by the BID committee and viewed and certified by the assessors. All I can do is rely upon the word of the assessors, and upon the word of City Solicitor Janet Shepard and Planning Director Wayne Feiden."

The Advocate asked Mazza what she did in cases where BID assent forms contained illegible signatures. "In those cases," she said, "I would call Kristen at the Chamber of Commerce or call Ann Burke to find out what the names were." (Kristen Cole is a staff member at the Chamber of Commerce, and Ann Burke is a consultant retained by the BID committee.) When asked if it were true that no effort was made to verify that the signatures on the assent forms matched the current owners of the property, Mazza answered in the affirmative. "That would have been onerous," she remarked. "The City Solicitor has issued a statement saying that she has examined the BID petition and that it is valid. I have to rely upon her word."

The city assessor's office produced no further information on how the 60 percent rule was verified. Assessor Joan Sarafin explained, "(Secretary) Joe Cross was with me. We had a spreadsheet which had a list of the current owners as of January 1st. All we did was make sure we had a signature for every parcel. We did not check the signatures to see if they had permission to sign—that is, if they were actually the owner of the property. As for calculating whether 60 percent was reached, or determining how, that's not what we did in the assessor's office. That would be Wendy Mazza, the city clerk. You should go talk to her."

Having had no luck at city hall determining how the BID petition was verified, this reporter made her way to the Chamber of Commerce. "Quick question—why would the city clerk be calling the Chamber of Commerce in order to verify signatures on the BID petition?" the Advocate asked chamber director Suzanne Beck.

"The Chamber provides administrative and clerical support to the BID committee," she responded.

"Then you should be able to tell me what standard is being used to calculate the 60 percent standard—one owner, one signature, or one property, one signature?"

"I have no idea," replied Beck. "If I were you, I would go talk to the assessor and the city clerk."

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Back at Advocate headquarters, I soon received a call from Teri Anderson, the city's economic development director. "I heard that you were at city hall this morning asking questions. Let me clarify," she offered. "It's one assent for every separate tax parcel. Not one owner, one assent. That's how Chapter 40O has been interpreted and implemented in Massachusetts. Attorneys have looked at this. The state publishes a guidebook for communities that want to establish BIDs, and that is their recommended interpretation of the 60 percent rule. All of the existing BIDs in Massachusetts—Springfield, Westfield, and Hyannis—were formed by gaining assent on a by-tax parcel basis, not on a per-individual basis."

Ann Burke, vice president of the Economic Development Council of Western Mass. and consultant to the Northampton BID committee, concurred. "Every taxable parcel is considered a separate signature for the purposes of forming the BID," she told this reporter. "The Massachusetts Department of Housing and Economic Development has issued guidelines for BID formation through its Downtown Initiatives Program, and indicates that this is how the 60 percent rule should be interpreted. But we ultimately relied upon the advice of our lawyer, Chip Doherty of Bulkley, Richardson and Gelinas."

There is no Massachusetts case law regarding the implementation of Chapter 40O; no decision which might clarify how the statute is meant to be interpreted. Until there is, proponents will likely interpret "60 percent of the real property owners within the proposed BID" as meaning "60 percent of the parcels within the proposed BID."

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Opponents, including Scheinman, have claimed that petitioners "gerrymandered" the BID map by adding several large parcels owned by Smith College at the eleventh hour—parcels that were not included in the initial map presented in the BID plan. According to this argument, when parcels of high value are added to the BID map, the balance is tipped toward the proponents. Conversely, if it is known that certain property-rich institutions will not sign assent, then it is in the interest of proponents to draw them out of the map. (The Forbes Library, for instance, was in the original BID map, but was removed from the final district.) For the purposes of meeting BID petition requirements, the ideal addition to a proposed district would be an entity that owns multiple high-value properties. Smith College fits this description.

Since there is no public oversight of the early stages of the petition process, it is indeed possible that the map could be dynamically redrawn as information came in from BID committee members about which property owners or institutions would be willing to sign. The edges of the map would be most vulnerable to this type of on-the-fly amendment.

But is this against the law? Chapter 40O does not stipulate that the BID map be set in stone before the signature drive begins.

"It only makes sense to do it that way," remarked consultant Ann Burke. "Of course you'll want to draw the map to encompass the areas where you have support for the BID."

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One question remained unanswered: who did the math, if not the city clerk or the city assessor, to verify that the BID petition was valid? I picked up the phone and called Dan Yacuzzo, chairperson of the BID committee.

"The BID committee did the math before presenting the final petition," Yacuzzo revealed. "Of course we did the calculations—why would we have wasted everybody's time by presenting a petition that did not meet the requirements of Chapter 40O? When we had about 63 percent assent, we submitted the petition, and it was appropriately verified and approved by the assessor and the city clerk. City Solicitor Janet Shepard has issued a statement verifying that the BID petition meets all of the statutory requirements."

The Advocate asked Yacuzzo to comment upon Scheinman's assertion that large Smith College parcels were added to the map in order to pad the numbers and ensure approval of the BID petition. "There are 492 parcels within the proposed BID district," Yacuzzo responded. "We collected signatures for 309 of them. That's almost 63 percent. If you get rid of the six Smith parcels, that's 303 divided by 486, which is still 62.3 percent. As for the 51 percent rule, consider this: the total assessed value of the BID district is approximately $402 million. The value of the Smith-owned parcels is $106 million. Without Smith, the BID district would be assessed at $296 million. Without Smith, we still have signatures for $214 million, which is about 70 percent, way more than the 51 percent needed. Scheinman's assertion is mathematically incorrect."

But what about the combined effect of all non-tax-paying entities combined? Assent forms were signed by Smith College, the City of Northampton, the Commonwealth of Massachusetts, the First Congregational Church, the Hampshire County Courthouse, the Roman Catholic Diocese, the Edwards Church, HAP Inc., the Unitarian Church, the Edwards Church, Servicenet, Smith Charities, the Chamber of Commerce, the Christian Science Church, Northampton Friends Meeting and the Hampshire United Way.

Scheinman put it this way in a recent address to the City Council: "The BID has a total assessed value of approximately $398 million. To reach the 51 percent threshold, you need assent from the owners of $203 million worth of property. The assessed value of all nonprofits who have signed on to the BID equals $194 million. The non-profits alone account for a full 95 percent of the necessary 51 percent. The BID could be approved almost solely upon the assent of non-tax-paying, non-BID-fee-paying entities."

A skeptic might remark that the requirements of Chapter 40O, especially as interpreted by its proponents, create a situation in which BID petitioners simply cannot lose. This is especially true in districts, such as downtown Northampton, that are rich in residential condominiums and non-profit, governmental and educational entities. These entities are not obliged to pay BID fees (although they may forge agreements with the BID for providing money or services). Signing the BID assent form becomes a no-brainer for home owners and non-tax-paying institutions, as they have nothing to lose and everything to gain from BID membership. The 60 percent threshold can be met with very little real support from business property owners, who are in fact the individuals who will be obliged to provide the BID with an operating budget.

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Proponents maintain that membership is not mandatory for property owners within the district. After the BID is adopted by the City Council, owners have 30 days to proactively "opt out." Those who opt out do not have to pay, and, according to statute, need not be accorded any services by the BID. (This is somewhat hard to imagine: will the BID's ride-on sidewalk sweeper lift its bristles while passing certain buildings?) Owners who do not opt out within 30 days must remain BID members for as long as they own their property, or until the BID is dissolved. The city may place liens upon properties that do not pay their BID fees.

The Massachusetts Municipal Association is lobbying to have the opt-out provision removed from Chapter 40O, making paid participation mandatory for property owners within a BID district. The MMA recently testified to the Massachusetts House and Senate, noting that under current regulations, "some landlords opt out and undermine a BID... Most states do not have opt-out or non-participation provisions in their BID enabling laws."

In a city like Northampton, where a BID could, hypothetically, be formed almost solely by the assent of non-tax-paying entities and private residents—none of whom need pay for their BID membership—is it fair to force private property owners into subsidizing services for the entire district? And is it wise? Although several large property owners support the BID, others, including real estate investor and nightclub owner Eric Suher, have vowed to opt out.

Few argue that a BID might not provide valuable services to the downtown, or question the motives of the volunteers on the BID committee. But do BID proponents really have the broad base of support from the business property-owning class that will be necessary to fund the enterprise? It remains to be seen how many property owners opt out of the BID if and when the City Council votes its approval.

"Opponents will be actively encouraging private property owners to opt out of the BID," Scheinman said. "The City Council might vote to approve the BID, but there is no guarantee that the BID will end up with the $938,000 operating budget that it wants."