Pair of property owners in Northampton sue BID, city over new state law
NORTHAMPTON — Two downtown property owners, including former judge W. Michael Ryan, are suing the city and the Northampton Business Improvement District in federal court, saying a new state law that forces them to join the BID and pay fees is a violation of their constitutional rights.
The lawsuit, filed in recent days in U.S. District Court in Springfield by former district attorney Ryan and Alan Scheinman of Holyoke, asks the court to declare the amendments unconstitutional.
The suit also seeks to prevent the Northampton BID from taking a renewal vote as outlined in the new law, from assessing a fee as a result of that vote, and stop the city from processing the fee.
“I think the lawsuit stands for itself,” Scheinman said Wednesday. “I think we state a reasonable case on a multiplicity of grounds. We’re basically trying to stand up for our rights.”
The BID’s executive director, Dan Yacuzzo, said the organization’s attorneys are reviewing the lawsuit with lawyers for the city.
“We will defend ourselves vigorously,” he said.
BID boundaries, fees may change
Meanwhile, in a separate development a few months in the making, Yacuzzo said the BID board of directors is about to unveil a new plan that will dramatically shrink the district’s boundaries and lower the fees most property owners pay.
Such a change would require a new petition and approval by the City Council.
The proposed changes, the details of which are to be mailed to more than 300 downtown property owners this week, are the result of meetings with property owners who opted out of the BID, as well as current BID members. The plan is a result of the board’s effort to respond to local feelings surrounding the new state law, which Yacuzzo said they did not lobby for.
“I’m hoping our effort indicates we’re listening to what people are saying,” Yacuzzo said. “The board is proposing some very dramatic changes.”
Ryan’s property at 1 Autumn Lane downtown would not be in the newly-drawn BID, and Scheinman, who owns a condo at 247 Main St., is exempt and doesn’t pay a fee to the BID. Both owners opted not to join the BID when it was created four years ago.
The BID currently includes 109 commercial properties, or about 40 percent of the total number of commercial parcels. The remaining 166 commercial property owners chose to opt out.
The changes to the BID law, known as Chapter 40O, approved by the Legislature last summer eliminate the ability of property owners to opt out of a BID after one has been created, bringing Massachusetts more in line with BIDs in other states.
In BIDs that are already operating, such as those in Northampton and Amherst, non-participants would be forced to join and pay the additional tax after district members pass a renewal vote.
This renewal, required every five years, gives property owners recourse to dissolve a BID if the majority feel it is not providing an adequate return on their investment.
Opponents have argued the law has one major flaw in that, as non-members, they would not be able to cast a vote in the current BID’s first renewal election.
That’s one of the major points Scheinman and Ryan highlight in their lawsuit.
The lawsuit does not challenge the Legislature’s power to permit the creation of business improvement districts, but instead questions whether the law can allow conversion of an existing voluntary BID into a compulsory one.
BIDs can “unilaterally transform themselves into mandatory BIDS, upon a vote of as few as a handful of individual, private citizens or entities, already members of the BID,” the lawsuit states.
Scheinman and Ryan argue that forcing them and others to join after the fact and against their wishes is a violation of the Fourteenth Amendment. That amendment grants equal protection of the laws, due process and free speech.
After initially exploring a larger lawsuit incorporating opponents from the seven BIDs in the state, Scheinman said they instead opted to focus on Northampton because they own property in the district.
“We would be affected by the amendment through the existence of the Northampton BID, and more particularly by a vote of that BID,” Scheinman said.
Scheinman is also part of a separate lawsuit challenging the BID’s creation three years ago. That lawsuit, which he filed with Eric Suher and David Pesuit, claims that the city violated state law in forming the BID. The city denies the claim. The case is pending in Hampshire Superior Court.