2021 | Silver Spring

State lawmakers plan legislation to modify possible Silver Spring business district

Proposal to create a new district has been debated by officials, merchants

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The boundaries of the proposed Silver Spring BID.

MONTGOMERY COUNTY GOVERNMENT

This story was updated at 2:20 p.m. Sept. 17, 2021, to correct how the tax would work within the business improvement district.

Four state legislators plan to draft legislation to rework plans for a business improvement district to help promote and market downtown Silver Spring.

Dels. Lorig Charkoudian, David Moon and Jheanelle Wilkins and state Sen. Will Smith recently told the County Council about their plan to introduce state legislation. They want to modify elements of a proposed business improvement district (BID) in Silver Spring.

The BID is similar to ones seen throughout the Washington, D.C., region and replaces some of the marketing and promotion responsibilities of the Silver Spring Urban District, handled by the county. That district also covers downtown Silver Spring. 

The county funds the urban district through a tax assessed on properties in densely populated, unincorporated areas of the county: Silver Spring, Bethesda and Wheaton. Those taxes help maintain streetscaping, provide public amenities and promote the arts, culture and overall programming in those areas.

Currently, most of the County Council supports the BID. The council voted to approve it 7-1 in late July.

But County Executive Marc Elrich, Council Member Will Jawando and several businesses oppose it, arguing that it wouldn’t fully represent smaller businesses in the district, many of which are run by minorities and/or immigrants.

Elrich vetoed the proposal in August, and council members said soon after they would override it

The council needs six votes to override, and has 60 days after a veto to act, according to the county charter. The 60-day deadline is Oct. 8. 

In the proposed BID, a nine-member board of directors — consisting of five property owners and four business owners within the district — would oversee a tax assessed on all property owners in the district.

The board would decide how to use the money to promote and market downtown Silver Spring, but the County Council would decide the tax rate set within the district.

The letter from the lawmakers in District 20 , which includes Silver Spring and Takoma Park, is important because state legislation initially helped set parameters for several aspects of the BID, including how it can be established and the governance structure of the board of directors.

In their letter, the state lawmakers said they will draft new legislation that would make several changes to the BID, including:

  • Increasing the size of the board of directors from a maximum of 9 to a minimum of 15 members, with no maximum
  • Requiring that the board include property owners, small businesses, businesses of various sizes, and others as determined by local law
  • Forming or expanding the BID must include approval from owners of 65% of property parcels and property value within the district. Previously, it was 51%.
  • Along with the above, 65% of the tenant businesses must vote in favor for there to be a BID
  • A neutral party must notify all property and business owners inside the proposed BID, before any process starts

In an interview, Charkoudian said she was interested in revisiting the state law after several business owners in the proposed BID expressed concerns about the current structure. 

Charkoudian said she heard that small, minority- and immigrant-led businesses were excluded from the current proposal. She called those businesses the “driver of our economic engine” in downtown Silver Spring.

She hopes the bill will pass through a collaborative process. But she echoed Jawando’s and Elrich’s concerns that the BID should be more democratic and fairly represent those within its borders. 

When asked about the provisions that increase some thresholds for establishing the BID to 65%, Charkoudian said it furthers that idea of better representation and democratic values.

“I think it’s really important to remember that while property owners have invested in a piece of property, business owners have invested their lives and money, and everything they’ve got, into their business,” Charkoudian said. “So everyone who’s invested ought to be involved in the decision-making, and that starts with the decision-making to have a BID.”

Jawando said in an interview that he hopes the letter from District 20 lawmakers convinces his colleagues to reverse course and not override Elrich’s veto while details are worked out.

He’s still concerned about opposition to the BID from several small business owners, he added.

“To move forward now would be counterproductive. … Give them the few months to get this done, and there’s nothing precluding us from gathering that support [from businesses] now,” Jawando said.

“We should let the folks in Annapolis do the work,” he added. 

Council Member Hans Riemer, who co-sponsored the initial BID proposal with Council President Tom Hucker, said in an interview that there were “some good ideas” in the letter from the District 20 team.

He added, however, that he doesn’t think the council should wait for changes to the state law. He still believes there are enough checks and balances to the proposal to make sure small businesses are represented in the BID.

“We never said the legislation was perfect. There’s always been room for improvement there,” Riemer said. “The council has been working within the framework that the state created. …

“Before the county provides a cent to that BID, we have to get the basics right, they have to have a board that represents the Silver Spring business community, and they have to do a lot of work to build trust in the community.”

Riemer is running against Elrich in the 2022 Democratic primary for county executive. Hucker has said he is considering running for county executive, too.

The County Council’s next meeting is scheduled for Tuesday. No agenda had been posted as of Thursday afternoon.

Steve Bohnel can be reached at steve.bohnel@bethesdamagazine.com