Businesses feel trapped by costs of Union Square's Business Improvement District

Ever wandered through Union Square and spotted some smartly dressed folks sporting matching red vests and hats? They are the Union Square Ambassadors. These knowledgeable people are paid to solve quandaries such as "Where is Michael Mina?" and "Cable car ... how?," often issued in multiple languages. Such polite sagacity does not come free: Hotels, restaurants, and other businesses pay for the ambassadors through an additional property tax levied through what's called the Union Square Business Improvement District (BID).

The $3 million worth of taxes paid into the BID annually also pays to clean the square, to advertise and market it, and for police officers to patrol it. In short, the BID helps ensure that Union Square is a safe place in which to visit, lounge, eat, and above all else, spend gobs of money. BIDs are not new: The 10-block Union Square BID was formed in 1999, but there are plans to expand. A proposal for a 27-square-block Greater Union Square BID recently received warm support at the Board of Supervisors.

But not from everyone paying the taxes. Three Union Square hotels — Parc 55, Hotel Nikko, and the Handlery — would rather dispense with the taxes and hire their own cleaners and security guards, thank you very much. In fact, the slumping economy has already forced layoffs at Parc 55, and paying premium prices for services the upscale hotel's employees could provide for much less might force more job cuts, attorney Kenneth G. Hausman said during testimony at City Hall on May 28.

The dissenting hotels are in the minority, real estate consultant and BID backer Karin Eklund points out. And if more than 50 percent of area hotels and merchants vote for the expanded BID next month, there's nothing Parc 55 or anyone else can do except pay up. Granted, Parc 55 does shell out about $62,000 a year — although that's less than the Westin St. Francis ($70,000) and more than the Flood Building ($48,000), both of whom issued yes votes.

Hourly earners at risk of losing their jobs at Parc 55 might for once sympathize with their cash-poor owners, but supporters of the BID don't. They say Union Square was once run-down and now, thanks to the added cash, it is not.

"Look down Campton [Place]," said J. Timothy Falvey of real estate firm Hanford Freund, which opposed the BID in 1999 but is on board now. It's "littered with trash and human waste. ... That's all you need to see why [the BID] is necessary."

 
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