The Disneyfication of Downtown Oakland — Business Improvement Districts and the Battle for Public Space

Large real estate corporations hired New City America to establish two Business Improvement Districts (BIDs) in Oakland. The Downtown Oakland BID and the Lake Merritt BID are working aggressively on behalf of Oakland’s owning class, focusing on driving youth of color, activists, the poor, and houseless persons out of district boundaries.

by Adrian Drummond-Cole and Darwin Bond-Graham

 

Oakland is far removed from Anaheim in look, feel and form. But as corporate real estate firms stake a claim to the maintenance and administration of public space in Downtown Oakland, the area is being reshaped in accordance with the model for a controlled and commodified space exemplified by the post-war suburban shopping mall and theme park par excellence: Disneyland.

While redevelopment agencies typically control the building phase of large-scale downtown projects, in the built environment, the “curb to property line” streetscape is often controlled by the Business Improvement District (BID), a lesser known but strategically relevant urban entity.

In early 2008, a small group of managers working for the largest real estate corporations in downtown Oakland partnered with New City America, Inc. (a San Diego-based consultancy that has established over 61 BIDs in the U.S.), to create the Downtown Oakland Association and Lake Merritt Uptown District Association.

How BIDs became such big deals

BIDs have radically reshaped public space and the people’s right to their cities since 1994, when California passed a Property and Business Improvement District Law (PBID). The law was written expressly to facilitate the formation of BIDs by concentrated groups of large property owners, needing little help or approval from smaller property owners, and completely bypassing the non-property-owning residents of the area.

Its author, John Lambeth, is a land-use lawyer and developer who was then working for real estate corporations in an effort to “clean up” downtown Sacramento. Lambeth today runs Civitas Partners, a consulting firm that specializes in creating and managing BIDs, such as the Fruitvale and Temescal/Telegraph BIDs, and the Oakland Convention Center and Visitors Bureau.

Marketed as a strategy for downtown retail districts to remain competitive with suburban malls, the BIDs initially followed the mall paradigm in collecting fees for facility maintenance and security. Today, there are more than 1,200 BIDs in the United States-and many more in Europe, Canada and South Africa-employing thousands of lawyers, consultants, developers, and planners who work with cities and real estate companies to operate districts.

Anti-democratic nature of BIDs

Proponents credit BIDs with facilitating a “business renaissance” in many blighted urban areas and generating retail tax revenues. These accolades, however, belie the anti-democratic nature of BIDs, which have state-like powers in policing, sanitation, redevelopment, and taxation matters, but are run like private nonprofit organizations governed on the basis of votes apportioned to members according to their gross property ownership.

BIDs are nearly always the creation of a few large corporate real estate firms and though they often unite small businesses seeking to increase sales through street improvements and public relations campaigns, their economic benefits are actually long-term and accrue to a narrow slice of the business elite. The real benefits are in the militarization and privatization of public space in a process that ultimately leads to greatly increased rent revenues for major real estate owners.

BIDs pressure elected officials

Ostensibly non-political organizations, BIDs actively lobby elected officials and civil servants, influence how city general funds are spent, shape police policy and practices, and pressure elected officials on a variety of controversial issues. Through lobbying, BIDs greatly increase the political power of those who own land and buildings at the expense of the non-property owning majority. Oakland’s two largest BIDs are a case in point.

Under Proposition 13 — the single most destructive cause of California’s chronic fiscal crisis — property taxes can only be raised with a two-thirds majority of voters or the Legislature. Passed in 1978, the law has especially harmed cities with large non-white and working class majorities, such as Oakland, which have experienced capital flight and consequently, have a relatively small retail tax base.

By demanding an affirmative vote of only those corporations and individuals who account for 50 percent of proposed assessments in a district, the PBID law allows for two unique, anti-democratic modes of governance of city space and services: (1) a small alliance of property owners can effectively circumvent Prop 13; and (2) a handful of large property owners, if they are organized and in agreement, can raise taxes on all other property owners in a district.

Under PBID law, taxes can be raised by a tiny minority who own a majority of a district’s real estate because the taxes are technically classified as “special assessments,” which may only be spent on improvements or activities that directly benefit those paying the assessments.

The legal mechanism used to raise these “special assessments” cannot be used by a city, school district, or other state agency to improve under-funded public services, which disproportionately affect communities of color.

Rather, the law, by design, only allows for raising taxes in ways that are favorable to the same parties who have benefited the most from Prop 13 — large commercial real estate holders. Under current law, they pay only 1 percent of a property’s valuation at its last sale and have managed via special loopholes for corporations to transfer property without triggering a re-assessment.

Marco Li Mandri, CEO of New City America, explained it very well in a 2008 address to Oakland’s business leaders: “Experience has shown that once the assessment district management corporation is formed, the private property owners in the district can normally leverage a greater amount of general benefit city services than before the establishment of the district. This is due to the fact that those property owners are now organized and can request things, such as additional trees, trash cans, lighting, and sidewalk repairs, and the CBD assessment revenues can maintain these additional capital improvements.”

In other words, BIDs greatly increase the political power of real estate corporations in city budget politics, allowing property owners to demand greater shares of the shrinking general budget to be spent in areas that benefit them at the expense of others. Not surprising, therefore, that a few large real estate corporations hired New City America to establish and operate two BIDs in downtown Oakland, both of which have been aggressive political organizations on behalf of Oakland’s owning class ever since.

It only took a small number of property owners to establish each district — nine for the Downtown Oakland Association (DOA) and 12 for the Lake Merritt Uptown District Association (LMUDA) — even though each district spans many city blocks and is composed of hundreds of individual parcels owned by several hundred persons or companies, most of whom have no meaningful voice in the BID’s governance.

Control of both BIDs is reflected very straightforwardly in their boards of directors. The Downtown Oakland Association’s board has included executives of the largest property holding corporations in the district. Within the Lake Merritt Uptown District Association, the holdings of a few companies dwarf all others, giving those companies a controlling interest in the district’s affairs.

From Disneyfication to the Militarization of Downtowns

After a visit to Disneyland in 1965, architect Charles Moore articulated a position that has become the “mantra” for BIDs today: “You have to pay for the public life.” For Moore, Disneyland exemplified an ideal form of public space, “much more real” in its austere, organized, and instrumental nature. However, even he admitted that such spaces do not allow for the full range of public experience, noting that political experience is wholly absent.

Thousands of people joined Occupy Oakland and shut down the Port of Oakland on Nov. 2, 2011. Photo by Ariel Messman-Rucker

 

Occupy Oakland activists were violently attacked by city police after setting up an encampment at Oakland City Hall and holding several massive marches in protest of gentrification and the economic injustice of big banks and corporations.

 

Business Improvement Disticts attempt to create a cityscape conducive to commerce, and by claiming “curb to property line” space, attempt to instill an atmosphere of publicly accessible private space, not unlike museums, hotels and enclosed shopping malls.

In an apparent emulation of Disneyland, friendly looking, smartly dressed “ambassadors” in navy blue or bright orange uniforms patrol the sidewalks, ready to direct tourists and enforce district rules. The point, as is exceedingly clear in downtown Oakland, is to create a Disneyfied space safe for consumer citizens to shop and eat at trendy stores and restaurants, and for corporate employees to zip through from BART stations to their office towers.

The entire process hinges on an intensive gentrification effort in which undesirable categories of persons and activities associated with them are removed.

Numerous scholars have commented about the increasing “militarization” of public space — the armoring of cityscapes and city politics against the poor. Militarized cities are legal-political constructs designed to withdraw a resident’s right to space in favor of capital’s right to increase its control and profit from the cityscape. They are achieved through a simple logic of inclusion/exclusion and the control of access.

Both the DOA and LMUDA have focused their efforts on driving youth of color, activists, the poor, houseless persons, and other targeted populations out of district boundaries.

They have executed these gentrifying policies by: (a) environmental design practices; (b) using private security for order maintenance; (c) influencing the Oakland Police Department’s (OPD) deployment of force; and (d) lobbying public officials to eradicate unwanted persons, events or businesses from the districts.

Occupy Oakland challenges the Militarized City

Until October 2011, there had been surprisingly few criticisms of the practice of driving out “undesirable” persons from the boundaries of Oakland’s BIDs. But all that changed when police were ordered to crack down on Occupy Oakland and specifically, to remove the encampment from Frank Ogawa Plaza, which many in the city have since renamed Oscar Grant Plaza.

After the initial violent raid and several more episodes of police violence against peaceful protesters, evidence surfaced that Oakland’s BIDs had pressured City Hall to remove the encampment.

In a letter addressed to Mayor Jean Quan, the BID directors — essentially Oakland’s largest corporate real estate owners — demanded that the city remove any and all signs of protest from the downtown area, saying: “The protest has been allowed to run its course. Now it’s time to focus on jobs and the economic restoration of our city.”

Ironically, the BIDs identified Frank Ogawa Plaza as a “public space,” to be “enjoyed by all the people of Oakland, not just a minority who have now had their moment and headlines.”

From the very beginning, Occupy Oakland’s encampment had been a physical manifestation of the local racial and class struggle against the BID agenda of gentrification. More generally, Occupy was a protest against housing insecurity and the vastly unequal distribution of public goods among Oakland’s neighborhoods, as well as the racist violence of the OPD.

The same populations — houseless persons, panhandlers, youth of color — that were being targeted for elimination from the downtown area by the BIDs flocked to Occupy Oakland for the sense of camaraderie it created and the services it offered, including food, medicine, and security. Many of the tents pitched in Oscar Grant Plaza housed persons who had been living outdoors or in cars and tents long before the encampment started.

In many ways, Occupy Oakland was, from the very beginning, a political statement not against distant Wall Street villains and D.C. politicians, but rather against Oakland’s business leaders, City Hall and the police. The protest had not “run its course” as the BIDs would have liked it; rather, the political opposition was just getting organized.

Occupy Oakland, like many encampments across the United States, localized the terms of political struggle and focused on those who controlled urban real estate, the police force, and private security forces, and for whom the city was being designed. The violent expulsion of an encampment is not the end of resistance to the BID agenda for a Disneyfied downtown Oakland. Rather, it is the beginning, because it has clarified for many Oaklanders the structure of power in their city and revealed the goals of those who own the real estate, as well as the tactics they are willing to employ to maintain control.

Adrian Drummond-Cole is a writer, organizer and musician who lives in Oakland. Darwin Bond-Graham is a sociologist and author. This article is reprinted with the kind permission of Jesse Clarke, editor of Race, Poverty and the Environment, A Journal For Social and Environmental Justice. See more articles about social and environmental justice on their website at urbanhabitat.org/rpe

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