Senate budget includes Community Benefit Districts

Press Release

BOSTON – Senators voted to include language establishing Community Benefit Districts (CBDs) in the Senate budget yesterday, potentially creating a new tool for cities and towns in Massachusetts to establish local partnerships to manage and support vibrant, walkable places like downtowns and main streets.

The legislation would allow local groups of property owners and other stakeholders to work together to create a management plan for a district and then implement the plan. CBDs are required to be initiated through a petition process followed by public hearing and municipal vote of approval.

CBDs provide services that are not supported by the municipality, which may include items like sidewalk cleaning, cultural programming, public art, branding and marketing, street furniture, landscaping, and more. The partnership is managed by a managed by a 501(c) 3 organization, and is financed by the property owners, donations, and program revenues.

Senator Eileen Donoghue, the proposal’s lead sponsor, said “CBDs are a way for communities to set their own goals and solve their own problems. Local governments, especially in our gateway cities, need more help making their downtowns attractive to residents, visitors, clients and customers. This will generate new local capacity and investment without costing the state a penny.”

Representative Brendan Crighton, who successfully championed CBDs in the House budget, added, “Many of our historic communities, like Lynn, have great ‘bones,’ but this supports the people side of the equation. CBDs would give local people and businesses the opportunity to get directly involved in making improvements.”

The Community Benefit District proposal has been crafted with input from top district management experts like Ann Burke from the Western Mass Economic Development Council, who helped establish most of the Business Improvement Districts in Massachusetts; and Marco Li Mandri, the President of New City America based in San Diego, who has helped create over 75 districts in states all over the country.

Massachusetts has an existing “business improvement districts” law, and community benefit districts work in a similar way. However, CBDs include a number of differences that may make them more attractive to certain communities and are designed to implement a broader community vision. In addition to commercial areas, CBDs could be used to manage cultural districts, historic districts, parking districts, and collective purchasing arrangements. They are designed to be easier to establish and dissolve; as a result, they could be implemented more easily by districts that include many small property owners and low-income areas.

As a result, CBDs have a variety of additional safeguards to protect small property owners, including:

  • They must be managed by a nonprofit 501(c)3 entity.
  • CBDs require signing a Memorandum of Agreement with the municipality.
  • The weight of large property owners is capped at 20% during the formation process, no matter how large they are.
  • Municipal approval is tighter, since in cities the mayor must also approve, and in towns with a population of less than 10,000, town meeting approval is required.
  • The petition requirements for CBDs are more detailed and include providing an overall vision, governance structure, board of directors, and staffing plan.

André Leroux, the Executive Director of the Massachusetts Smart Growth Alliance, stated, “Successful places make a thriving local and state economy. Millennials and Baby Boomers are flocking to areas that have shops, housing, restaurants, and quality public spaces within walking distance. CBDs will enable more communities to compete while improving the quality of life for local residents.”