2021 | Government

County Council overrides Elrich’s veto of Silver Spring business district

State legislators are also working on a bill

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The border of the Silver Spring Business Improvement District

Montgomery County government

The Montgomery County Council on Tuesday voted 8-1 to override County Executive Marc Elrich’s veto of legislation that creates a business improvement district for downtown Silver Spring, aimed at giving business owners more control over marketing and promotion.

The Silver Spring Urban District, one of three in the county, currently handles marketing and promotions. The county funds the urban district through a tax assessed on properties in densely populated, unincorporated areas. That money funds services such as streetscaping, public amenities, and promotion of culture and the arts.

The council’s legislation shifts some of Silver Spring Urban District’s responsibilities to a BID, which has become common in jurisdictions throughout the region, including the District of Columbia, which has 11 such districts.

According to the legislation, the Silver Spring BID board will include:

  • three members who own property assessed at more than $20 million
  • two members who own property assessed at $20 million or less
  • one member who owns a business with more than 50 workers
  • three members who own businesses with 50 or fewer workers

Additionally, the BID would need to conform to the boundaries of the Silver Spring Urban District, and would authorize a tax on nonexempt property in the district to finance its operations.

Former or expanding the BID would require approval from property owners who own at least 51% of the assessed value within the BID, according to state law.

The council approved the BID legislation 7-1 in July, with County Council Member Will Jawando casting the lone dissenting vote.

Both Jawando and Elrich have opposed the legislation because they think it gives too much power to large property owners, and not enough to minority business owners who run smaller enterprises.

Elrich vetoed the legislation in August. In a letter to the council, he wrote that he didn’t think the BID furthered the county’s racial equity goals and that small businesses would pay most of the costs. He instead proposed an urban district corporation model similar to the Bethesda Urban Partnership.

The eight votes to override Elrich’s veto on Tuesday were more than the two-thirds required to do so.

Jawando again cast the lone “no” vote on Tuesday, saying that the Ethiopian business community along with Black business associations at both the county and state level had opposed the BID.

“The fact remains that property owners with the largest, the most expensive property, not only have the plurality of seats in the board, but they also have more votes,” he said.

Jawando then noted that the council’s Office of Legislative Oversight released a racial equity impact statement on the BID proposal, stating that it shifts the voting power for board members to those with the largest assets that “predominantly represents the interests of medium and large businesses.”

“Granting greater voting power to board members with larger businesses also shifts decision-making power from people of color-owned businesses to white-owned businesses …,” Jawando said, reading from the statement.

Jawando noted that state lawmakers from District 20 (Silver Spring and Takoma Park), which includes Dels. David Moon, Lorig Charkoudian and Jheanelle Wilkins, along with state Sen. Will Smith, are working on introducing their own Silver Spring BID legislation that differs slightly from the council’s. Under their proposal:

  • The board would consist of at least 15 members instead of 9, with no maximum
  • The board would need to include representatives from property owners, small businesses, businesses of various sizes “and others as determined by local law.”
  • Forming or expanding the BID would require approval from owners of 65%, rather than 51%, of property parcels and property value within the district
  • 65% of tenant businesses would need to express an intent to establish a BID
  • A neutral party would need to notify all businesses and property owners before the process can begin

Jawando said the District 20 delegation’s proposal helps balance out the “inequitable structure” laid out in the council’s version. But he worries that even if the state bill were to pass, the council’s version could remain as is.

“It would be grandfathered in, is the analysis from our staff,” he said.

Council President Tom Hucker later clarified that the council’s bill would have to conform to state law.

Hucker said he hopes the BID will help offset the loss of business in downtown Silver Spring that has occurred over the last 20 years.

“Just walk through there and count the empty storefronts. We are not positioned to address that, absent this proposal,” he said.

Hucker said the downtown area has seen more than 20 restaurants close during the last few years, which predates the COVID-19 pandemic.

“We used to market Silver Spring,” he said. “We used to attract patrons from all over the metro area. If you went there on a Thursday or Friday or Saturday night, six months a year, you were shoving your way or jostling through crowds of people that were out enjoying our restaurants, and our theaters and music and nightlife, and that’s all gone.”

County Council Member Hans Riemer said the aim of the BID legislation is to strengthen Silver Spring’s potential for economic development.

“Silver Spring is awesome. I love it. I spend a lot of time there. I think we probably all do, but it also has not fulfilled its potential,” he said.

Riemer agreed that the process for crafting the BID legislation was flawed, and that the small business community was “not adequately engaged.” But he said the board structure is set up to create a diverse set of business and property owners.

“Five out of nine board seats are for businesses that have either fewer than 50 employees or less than $20 million in property value. So that could be all kinds of things, you know, all kinds of business owners, and we should work together with the applicants to create a board, initial board that reflects the community,” he said.

Dan Schere can be reached at daniel.schere@bethesdamagazine.com