silver spring bid protest

Lene Tsegaye, owner of Kefa Cafe in Silver Spring, speaks at a news conference Thursday against a business improvement district for downtown.

Photo By Steve Bohnel

County Executive Marc Elrich said Thursday that he plans to veto legislation that allows a business improvement district in downtown Silver Spring.

The County Council approved the district 7-1 this week. The council needs six votes — two-thirds — to override a veto.

Council Member Will Jawando, the lone vote against the bill, held a news conference with Elrich outside Abyssinia Ethiopian Restaurant in Silver Spring on Thursday to talk about their support for a different approach.

A business development district, or BID, is an area in which private property owners are jointly in charge of maintenance, improvements and initiatives. It’s usually funded through an additional tax. Washington, D.C. has 11 established BIDs, ranging from Adams Morgan to Capitol Hill.

Council Members Hans Riemer and Tom Hucker sponsored the BID legislation, which aims to improve the business climate and marketing of the downtown area by replacing some of the marketing and promotion responsibilities of the Silver Spring Urban District.

Elrich and Jawando say the current Silver Spring BID would give too much power to large property owners downtown, and small-business owners of diverse backgrounds would not have a seat at the table.

“It’s just so undemocratic,” Elrich said in an interview. “There are BIDs that let everybody vote. The premise of this thing is the more money that you have, the more power you should have, which is so fundamentally anti-democratic that it’s offensive.”

Supporters of the BID say it would improve the downtown Silver Spring business climate and encourage more people to visit the area.

Opponents, including those who spoke Thursday, said it would lead to power concentrated through large property owners, and would not represent all business owners in the district.

More than a half dozen business owners who would be in the proposed BID joined Jawando and Elrich on Thursday, including some from Fenton Village — an organization of more than 200 small businesses in a six-block-by-two block area of downtown.

The Silver Spring Urban District is one of three countywide, with Bethesda and Wheaton. They are funded through urban district taxes, which are then used for streetscaping, public amenities and to promote the arts, culture and overall programming in those areas.

Per state law, property owners who own at least 51% of the assessed value of all properties within a proposed BID must submit a petition to the County Council. Some property owners are known as applicants.

Some of the applicants on the Silver Spring BID are Foulger-Pratt, a real estate firm; Peterson Companies, a real estate developer; and United Therapeutics, a biotech company, according to council staff documents.

Jawando, Elrich and others specifically criticized the governance structure of the BID Thursday. According to the legislation, the current board of directors of the BID would be:

  • Three representatives of owners of properties in the district assessed at more than $20 million
  • Two representatives of owners of properties in the district assessed at $20 million or less
  • One representative of a business employing more than 50 full-time equivalent employees in the District
  • Three representatives of businesses employing 50 or less full-time equivalent employees in the District

That board would decide on a tax rate for the district and how money should be used for marketing, promotions and more.

Hucker said in an interview Thursday that many businesses concerned about the BID would not have to pay taxes into it, as they are tenants in buildings downtown. County Council members also maintain oversight of the board of directors and the tax rate, Hucker said.

Riemer said in an interview that the BID will help create a better business and marketing environment for downtown Silver Spring, something desperately needed. More than 200 businesses have signed on in support, he added.

“If we can get this together, we’re going to have a lot more resources to market Silver Spring,” Riemer said. “Peterson Companies and Washington Property Companies, they can pay for their own marketing already … it’s the small businesses in Silver Spring that aren’t getting any help.”

But several small business owners and members of the Fenton Village District took aim at the BID’s governing structure, including:

  • Solomon Abdella, owner of Abyssinia Ethiopian Restaurant
  • Lene Tsegaye, owner of Kefa Cafe
  • Mike Gerecht, a landlord of several area small businesses
  • Jason Miriski, owner of Society Restaurant and Lounge and of Angry Jerk

Abdella said in an interview that the County Council rushed through the BID proposal even though many businesses oppose it. There were not enough conversations with small business owners like him, as the bill was being drafted, he added.

Jawando and Elrich sent a letter to the County Council, asking it to look at an urban district corporation for Silver Spring, similar to the Bethesda Urban Partnership. That partnership is a nonprofit that works closely with the county government and operates similarly to the Silver Spring Urban District.

It’s unclear if Elrich, Jawando and property owners can sway enough council members to preserve the county executive’s veto. The council has a deadline of 60 days after the veto to override it. 

Erich’s first veto was for legislation that gave incentives to developers building high-rise buildings on top of Metro stations. The council overrode that in October 2020 by a 7-2 margin.

His second veto was for a bill that would decrease impact-tax revenue from developments, and was attached to the county’s 2020-2024 growth and infrastructure policy — formerly known as the subdivision staging policy. The council overrode that 9-0 in December

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