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All property owners within Business Improvement Districts now must participate

Property owners within Business Improvement Districts will no longer be allowed to opt out from participation once these are established, now that new state legislation has been adopted as part of an economic development bill.

But the legislation also offers protection to all property owners by mandating renewals every five years to ensure that they are accruing the services such districts are designed to provide.

“The main benefit of this (legislation) is it treats the downtown as a whole,” said Alex Krogh-Grabbe, the executive director of Amherst’s BID. “It is much more efficient to talk about the whole downtown.”

While Amherst had what Krogh-Grabbe said is a “very high participation rate,” 21 of 92 property owners, representing about 15 percent of the property valuation, opted out from participation.

Daniel Yacuzzo, executive director of the Northampton BID, said even with a number of property owners not participating, they still get the perks offered.

“We provide general service for the downtown,” Yacuzzo said. “We don’t light the trees during the holidays based on who pays and who doesn’t.”

Even before Northampton’s BID became official, Alan Scheinman, David Pesuit and Eric Suher filed a lawsuit against the city for how it was established.

The legislation went into effect Aug. 7 after being passed through the legislature and then signed by Gov. Deval Patrick.

Ann Burke, vice president of the Economic Development Council of Western Massachusetts, said the legislation is sensible as the services being provided, from snow removal and landscaping to the holiday lights, are virtually impossible to carve out and deny to those not participating.

“People were getting services but not carrying their fair share,” said Burke. This is consistent with the way such districts throughout the United States and in other countries are created. Opt out provisions have been unique to Massachusetts.

The bigger concern, though, from BIDs that have existed for several years was that they were beginning to lose properties as they changed hands, reducing income and diminishing services, Burke said.

Though BIDS are formed by petition from 60 percent of property owners, with at least 50 percent of assessed value, and vote by an elected council, there has never been a mechanism for checking on their health. Burke said the legislation ensures a period where property owners will look back and be able to determine if the BID is performing up to the expectations envisioned.

“This increases incentives for us to be productive and meet the return on the investment that people want,” Krogh-Grabbe said.

He said he will be meeting with the BID board of directors in early November to plan for a renewal vote, which is being considered for mid winter or early spring 2013.

In Northampon, Yacuzzo said a similar approach is being used for renewal of the BID that has existed for just over three years.

“We are giving full consideration to an outreach campaign to the downtown property owners, but specifically to the property owners who have been in good standing,” Yacuzzo said.

The should also bring in additional revenue. Krogh-Grabbe said the $260,000 budget for Amherts’s BID would increase to around $300,000.

“We understand the opt outs will not be happy about this, but we want people to feel good about the BID,” Krogh-GRabbe said.

Yacuzzo said the $300,000 annually collected in fees will be given a boost and property owners should have concerns alleviated.

“Attrition can become so great that services start to be threatened,” Yacuzzo said.

Burke said besides maintaining a predictable and sustainable budget, she believes the legislation should help other cities form BIDs and could help eliminate the divisiveness that can sometimes continue even after a district is in place.

“We’re really looking forward to being one community, one Business Improvement District,” Yacuzzo said.

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