Lee Barczak Response To Effort To Dissolve Kinnickinnic Avenue BID#44

April 2, 2018

March 22, 2018

The Kinnickinnic Business Improvement District (BID) #44 has been the center of much recent attention. As current president of the BID board, I feel it’s important to address the grievances focused on BID property assessments, and provide the BID board’s point of view. My wife and I own buildings within the BID district and operate The Avalon Theater and the restaurant Mistral. We oppose this move to end the BID and hope you will agree after reading this. If you have already signed the petition calling for the BID to end, please consider removing your name, if what you read here inspires a change of heart.

The KK BID was formed in 2009 under the leadership of District 14 Alderman Tony Zielinski and commercial building and business owners, who saw the wisdom of creating an entity to promote value growth in the district’s business and commercial buildings. The original board worked to unify the commercial area of the BID. Uniform garbage and recycling bins were installed using a newly created logo that helped to identify the area. Planters and flower baskets were hung on the street to increase greenery. The BID took over maintenance of the Art Stop bus stop not long after its construction.

Through the first five years of the BID’s existence, many plans were considered but several issues prevented their fruition. As board membership changed, some potential projects were discarded and others under review did not gain enough momentum to be adopted. Over time, the KK BID and its board were perceived as less effective and board meeting attendance dropped.

In 2014 I was approached by Ald. Zielinski, who asked me to occupy an empty seat on the board. After being approved, I worked to understand what purpose this board had and why parts of the community viewed it as not accomplishing enough. In the course of this investigation, the board asked me to take on the role of board president. I’m pleased to say that during my duration on the board the number of people involved in KK BID activities greatly increased.

While the struggle continues to keep the board populated with motivated members, we’ve had a great group of passionate individuals who have worked hard to review ideas and accomplish those ideas that were approved.

In the past three years, the board has ranged from a high of seven members, the maximum number per our bylaws, to the current low of three members. Since this is a volunteer board, it has been and continues to be a bit difficult to seat volunteers who are willing to put in the hours needed. Anyone who has done this or served on volunteer committees knows that many of those who apply are solely looking to bolster their resumes. Or they are only willing to make decisions but not perform the work needed to enact them. The last thing any entity like this needs are such members or people who have a tendency to undermine what others do to improve an area like Bay View.

An important point I would like to argue is that this board has embraced that commercial building owners within the BID boundaries are the constituents of the board. Our mission is to help increase the value of commercial property in the BID by doing whatever is possible to bring patrons to the businesses that occupy these properties. It is also our mission to attract good development to the BID and to help businesses get events that enhance the experience of doing business within the BID for patrons, workers, and owners.

Currently, seven different building and business owners have verbally agreed that they, or a company representative, will sit on the board. Two of these have submitted the required information and applications, and we hope to have a complete board again within a few months.

While the attitude of the new board cannot be assumed, I hope anyone reading this letter will understand that many of the following are proposals from myself and other board members, some of whom have since ended their terms. Thus, these ideas have not yet become real initiatives of the KK BID.

The Tour of America’s Dairyland (ToAD) bike race has taken place in Bay View for the last three years in the area of KK and Lincoln. The BID committed to this race contingent on its ability is able to raise donation commitments of at least $18,000 by March 1, 2018. We have received commitments totaling $14,000 to date from Café Centraal, the main event-sponsor for the fourth year, Colectivo, and the Avalon. We are actively seeking donations for the balance of the projected $27,000 budget. This event is growing in size and in popularity with attendees, racers, and businesses. Several businesses in the area have stated this has become their biggest single revenue day of the year. We hope to gather more information from businesses within and close to the racing area about the business they do on the day of the race, if the race prevented them from operating their business, or if the race brought new business/customers.

Last year, several businesses did not submit the funds they’d pledged and as a result the KK BID lost $7,000. This was the first time a loss occurred, and that was certainly not the result of board members not procuring pledges nor of poor attendance at the event. I assure you the KK BID board is doing everything possible to see that events like this race, which are actually used as fundraisers for other organizations, will at least break even in the future.

The KK BID board has recently discussed the wisdom of expanding the number of events sponsored or overseen by the board. We have also heard repeatedly that too much of the BID’s focus has been centered on the KK/Lincoln/Howell hub. BID constituents to the south have often expressed the feeling they are left out. While the board and its Streetscape Committee have tried to address this by including the entire district with flower baskets, tree planting, banner, and mural projects, I state here that that is not enough. If the bike race is an event that has helped, perhaps there are other events that could do more for the rest of the BID.

One suggested event is a Music on KK Weekend. The idea here is to schedule a large number of musicians to entertain in venues up and down the BID district. A key element of this weekend would be that most of these performances would occur in venues other than the expected bar or restaurant. We would like to see them perform in salons, grocery stores, gift shops, and auto shops, as well as more traditional venues. If this is well planned and promoted by the BID, it could result in a weekend of great business, public relations, and publicity for participating businesses and musicians, which will bring new people to the area and will help increase the momentum this area is known for.

The next event for consideration is the parade once held on the weekend of the South Shore Frolics. This parade was very popular in Bay View and was held on KK for many years. More recently, the parade was canceled several times due to an inability to find major sponsors and the difficulty of finding enough volunteers to carry off a major, one-day event. Discussions about this parade have led to ideas that would revive and change the parade. One idea is to hold it apart from the Frolics weekend. Another is to hire an event company to plan and execute the parade. The final idea is to have the parade at night and make it a “Parade of Lights.”

All of these and the many ideas and details that accompany them are in the infancy stages. However, if done correctly and staged on KK from the south end of the district at Morgan Avenue and to the north, the BID board feels it could add something just as exciting as the ToAD bike race to our district.

Events like these have the ability to bring substantial revenue to a community. This revenue benefits businesses and their employees in obvious ways. However, they also benefit building owners indirectly. The more business a commercial district does, the more area businesses will prosper. Other businesses will then want to locate in the area as word of a profitable atmosphere spreads. This means rents will increase as popularity builds. While building owners wish to profit just as the businesses that occupy their buildings do, increased revenue provides the building owners with the ability to properly maintain their buildings and to make often much needed improvements.

When the Faust building sold and a new development was proposed, many people in Bay View spoke out against destroying what they believed was a building worth restoring. The reality was that the Faust buildings had been neglected for so long, that there was no way to restore them that made economic sense. I don’t say this to be negative about the previous owner, and acknowledge I do not know their situation. My point is, had rents increased enough over time, perhaps the building would have been worth preserving.

There are buildings in our BID district right now that are only marginally maintained. While it is the right of every building owner to decide how to spend their rental revenue, any good landlord knows growth in value requires good maintenance and periodic improvement. Events like the ToAD race and our other proposals are ways to help owners create value today and tomorrow.

The KK Bid board feels the region would benefit from marketing the area in a more organized and consistent fashion for it would benefit all the businesses in the BID boundaries, as well as most in other areas of Bay View.

Every time there is an event or when I speak to businesses after events like Gallery Night or the ToAD race, I hear stories of how people tell them they never knew Bay View was so much fun or had so much to offer. This may be hard for those of us with a vested interest in Bay View to believe, but don’t for one moment think it’s not true. No shopping area or business will succeed in the long run without constant marketing. Doubt that statement? My one word answer—McDonald’s.

The KK BID has made a few attempts to market and promote Bay View but has not yet been successful. The original website was little trafficked by the public and was too expensive to maintain in its original design. A temporary one was created but remains only a band-aid on this area of need. While no one wants to see money spent foolishly, many opportunities exist, within the structure of the many offerings of the advertising community, to create brand and business recognition. What’s needed for the area is a well thought out marketing campaign, which would provide benefit to the businesses in our commercial district. Naturally, each business has its own opinion on what marketing would most benefit them, so a variety of options must be available.

The final event that is being considered is probably the most controversial. The South Shore Frolics has been an event that has fostered a “love it or hate it” response from the residents and businesses in the KK BID district and other areas of Bay View. There have been many meetings and endless online discussions about the Frolics. Like many events run by volunteers, it eventually shifted from being run by a coalition of Bay View institutions, to one being run by a single group, the Bay View Lions Club, as a fundraiser for the good works they sponsor. The Lions have had varying levels of success and as previously noted, had to eliminate the parade. While it has evolved a great deal over the years and does not resemble the Frolics during my high school years, 1965-1969, it still has the fireworks and attracts a large number of attendees.

Due to the controversy surrounding one aspect of the fireworks, there has been a lot of discussion about the future of the Frolics. The KK BID’s Visioning Committee had discussions on whether the BID could offer to operate the Frolics, making it more like the Frolics of the past. The idea was for it to be a more community-centered event that would provide Bay View businesses a chance to showcase their offerings, while keeping the fireworks and bringing back some of the old Frolics events like the Venetian Boat Parade on the water.

Other suggestions would be to offer different types of music, including a high school jazz band competition. The committee member believe the weekend should include activities from community groups like the Bay View Neighborhood Association, Bay View Garden Society, or the Bay View Historical Society, any that might be interested in being involved, if the event changed its direction. Whatever the nature of a different Frolics, the primary idea would be to make it an event centered on Bay View that would provide a showcase for its businesses, institutions, and for the enjoyment of its residents.

All of this leads me to the next issue: money. A business improvement district is funded by additional taxes placed on its commercial property owners for specific expenditures on board approved activities.

The original BID 44 board approved an assessment for all commercial and mixed-use properties in the district and that has not been changed since inception nine years ago. It is important to note that the assessment was one of the lowest of the 32 BIDs in Milwaukee. The KK BID 2018 assessment will generate $44,392 in 2018.

Recent state legislation has changed the way such assessments calculated for commercial- and residential-use buildings. While the commercial value was once used to determine the assessment, the formula has changed. Beginning in 2018, the ratio of the amount of commercial square footage to the entire building’s square footage determines what percentage of the current BID assessment the building will pay. For example, a building with 50 percent commercial and 50 percent residential with an assessed value of $300.00 will now pay 50 percent of that, or $150. This has resulted in a decrease for KK BID of $10,000, which now places the BID in eighth place in Milwaukee, in terms of revenue available for BID projects and maintenance.

In order to make up for this lost revenue, the KK BID board has discussed increasing the assessment for the BID tax. There’s never even been an inflationary increase in the nine years of the BID’s existence. This has resulted in a loss of buying power and an increased immobility for the BID to commit to any projects of substantial improvements.

Some of you may be aware that at one on the 2017 board meetings, I brought to the table the idea of such an increase. I used the number a 500 percent increase, as an example, and this was discussed by the board. They decided the board should consider a plan about how such monies would be spent before putting any increase into effect. At this time, no increase of any kind has been approved. Contrary to recent mailings you may have received, the example of a 500 percent increase has not been approved or even set for future consideration.

When the assessment increase was discussed, one meeting attendee stated, “If you could not spend these monies, why do you need an assessment increase?” I explained that most of the ideas the money would be spent on had a lot to do with enhancing parts of KK that would have little or no benefit to building or business owners. Therefore, the board did not approve spending these funds. I feel this is an excellent example of how this board has acted in the best interests of the building owners who pay these assessments.

Another funding issue concerns an agreement approved several years ago whereby the KK BID might accept a $175,000 grant from the city of Milwaukee. The stipulation of the grand is that if the loan is accepted, the BID board must also accept a loan of the same amount. Only one member of the board, who approved the agreement at that time, remains on the current board. That board member explained that their approval came from the attractiveness of the grant and low interest loan. This money may “only” be spent for streetscaping types of projects. The status of this money remained in limbo for more than two years due to city budget issues, as well as the drafting of the agreement. This grant-and-loan has been another controversial issue because loan repayment term is 20 years and it cannot be paid off early. That would lock the BID into a 20-year existence, until the loan is repaid.

There are currently more than $50,000 of streetscape improvements that could be reimbursed by these grant/loan funds. This board has repeatedly refrained from accepting the grant/loan because it was unsure of the wisdom of creating a 20-year lock on KK BID’s existence. Once again this shows board members’ concern for the BID constituency.

So, now the KK BID finds itself in a state of rebuilding the board while facing a dissolution movement by some of BID property owners. Various reasons for their efforts to dissolve exist, but none of the important questions are being addressed by this appeal to save some tax dollars. The most important question is whether or not a BID for Kinnickinnic Avenue in Bay View is good. Many property owners thought so when it was created, myself included. Business improvement districts are found all over the city of Milwaukee and in many parts of the country. If they have done so much for commerce all over our nation, how can it be a bad idea for KK and, by osmosis, Bay View? I believe it would be a great mistake to follow the few who think saving these monies are more important than working to keep progress in the BID from going forward.

Two more questions may be whether or not we have been an effective board and I an effective president. While I’m sure we could have done more and been better organized, I assure you every board member, as well as the 27 members of the committees, spent a great deal of time and energy working on projects on behalf of a better KK business district. These people have volunteered with no compensation for their efforts beyond thank yous and criticism. I feel they have done an excellent job and many city and neighborhood observers have commented on the increased activity of the KK BID.

So what happens if this movement is successful and the BID is dissolved? Well, I’ll save about $1,300 in taxes a year. Like any building and business owner, I will, of course, find somewhere else to channel this extra cash flow. However, I’ll be saddened at the thought of all the hard-working, thoughtful, creative building and business owners who got on a bandwagon saying we can’t get anything done to be more exciting on KK, saying we can’t create or copy great ideas to enhance business in our BID, and saying, where in so many parts of life, the many are stronger together than the disparate few, that is not the case here.

I pray that’s not what we’re saying. I hope this BID will not dissolve. I hope those who believe we can create more together than apart for the community and businesses we love will become active. I hope that if you have signed this ill-conceived petition, you will contact the organizers and tell them to remove your name.

Sincerely,
Lee Barczak
KK BID, Board President

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