The Capitol Hill chamber — and with it an ambitious push for a neighborhood-wide business improvement area — is dead. What went wrong?

The chamber’s annual Hilloween festival is likely to be picked up and continued by the new guard.

When the Capitol Hill Chamber of Commerce shuttered in June, board members chalked its demise up to a confluence of issues and “unanticipated developments.”

A couple of “key” board members left, chamber board co-chairs Joey Burgess, and Tracy Taylor wrote in a letter at the end of May. Plus: Egan Orion, the recently appointed executive director of the chamber, decided to run for City Council, they wrote, and “a reduction of funds” from the Office of Economic Development “imposed insurmountable obstacles to operating as a true Chamber model.”

Now, two months after the announcement, interviews with former board members and others reveal a fuller picture of what happened to the nonprofit representing the neighborhood’s business community— and what is to come.

Funds from the City’s Office of Economic Development for the Capitol Hill Chamber, part of a yearly competitive grant process, didn’t decrease this year. The city granted the chamber $70,000 for 2019, up $8,000 from the year before.

But city funds for the chamber had been decreasing since their peak of $138,500 in 2015, when the group, along with city officials and local stakeholders such as nonprofit developer Capitol Hill Housing, published an ambitious vision and economic development plan for the neighborhood: “Capitol Hill 2020.

The goal: The chamber would grow into a “larger representative neighborhood business leadership organization” with the help of a Capitol Hill-wide Business Improvement Area or BIA, a hyperlocal (self-)funding mechanism for neighborhoods to keep up, market and manage their area of the city.

After all, the concept, in which local property owners, residents, and business tenants come together to fund cleaning services, waste management and “beautification” efforts such as new planters and other services, had been talked about for years. Plus: it had already proven to work in other parts of the city and, on a smaller scale, in the existing Broadway Business Improvement Area, which the chamber had been administering for decades.

They just needed to expand it across the different clusters of businesses on the Hill: Summit/Bellevue, Olive and Denny, Pike/Pine, 12th Ave, 15th Ave, and 19th Ave — covering an area that ran from I-5 up to 23rd Ave. The plan was to fund clean-up services, beautification efforts and social services, such as homeless outreach, with the extended BIA.

The chamber needed the green light of the owners of 60% of qualifying commercial property, who’d be paying a fee calculated on the square footage, up to some $5,000 per year. Not, like the Broadway BIA, a flat fee combined with a gross income-calculated fee. After the sign-off, the chamber hoped to get the agreement approved by City Council early 2016.

That’s not what happened. Instead, the BIA proved part of the chamber’s downfall as it depleted its resources and energy.

The machine sputtered from the start. In late 2015, the chamber saw no agreement between property owners on the Hill, only the departure of longtime executive director Michael Wells. Public relations professional Sierra Hansen was tapped to lead the chamber and BIA charge.

“The area we were looking at had 680 property owners. It was a larger swath than any other neighborhood BIA to get that support from. We thought it  [support] was there,” said Elliott Bay Books general manager and longtime CHCC board member Tracy Taylor.

“But as we moved forward, the landscape changed,” Taylor said. For one, “it was difficult to have people sign on while property taxes went up,” she said. “We had a new minimum wage ordinance come in for businesses. While businesses might not be property owners, we know that if the property owner is going to get a new tax, that is going to trickle down to the merchants and businesses. People weren’t as interested in what seemed like another tax.”

Even though there was preliminary support for the plan, the chamber kept moving the deadline back. Convincing the necessary property owners proved harder than expected.

Some former board members say that not having the right leadership at the right time, or the fact that many people worked for the chamber pro-bono, alongside their full-time jobs, might have made the effort to convince property owners to “voluntarily” tax themselves even harder.

One former board member, who did not want to be named, said the plan was too ambitious and brought up the example of the Ballard BIA efforts, which succeeded after a scaled-back proposal.

As the effort dragged on, leadership changes came and went. In 2017, Hansen transitioned out of her executive director role to lead the Broadway Business Improvement Area while the chamber functioned without an official ED.

“It’s definitely go time for it to happen this year,” said the newly-hired consultant Jack Sorensen in March 2018, hoping to bring the BIA campaign home.

By then, people with knowledge of the situation say, the chamber had missed momentum. In the vacuum, opposition from a coalition of the neighborhood’s smaller and family commercial property owners and others had started to grow louder. The plan was put on ice in the fall of 2018.

Without its core mission of an extended BIA, the chamber had to reinvent itself as a small business-advocacy and marketing organization.

That proved easier said than done. The BIA efforts had distracted the chamber for years while siphoning off its energy and resources.

“Instead of focusing on business development, marketing, and programs for the businesses, they [the CHCC] were focused on the campaign,” said Louise Chernin, executive director of the Capitol Hill-headquartered Greater Seattle Business Association. “And then not to succeed is very difficult for a board and very difficult for the business to understand why they are continuing to support a Chamber that is not providing the services they wanted.”

“A lot of people lost a little faith once the BIA didn’t happen,” said Queer/Bar and Grim’s owner and board co-chair Joey Burgess. Which made it harder to “go and collect dues from people and continue that membership drive when the BIA wasn’t a part of the process anymore, wasn’t one of the things we were offering.” And, he added later, “No one felt good about collecting money if we didn’t have an ED.”

But they’d recalibrate; go back to a traditional chamber model and serve the small business of Capitol Hill, while adding a series of public forums on topics like homelessness and LGBTQ issues, they decided late 2018.

Though the chamber felt like they had sparked some new momentum by tapping Egan Orion —who had led the Broadway BIA for about a year by then — as their new executive director in early 2019, they got the wind knocked out of their sails soon enough.

Membership had waned, and membership drives had fallen by the wayside, which meant the chamber could rely on fewer and fewer membership dues. As grant money from the city decreased as well, the Chamber saw its revenue shrinking year over year since 2015, filings with the Corporations and Charities Filing System show.

A settlement the Chamber had to pay after an employee complaint further exhausted the already-depleted coffers and, perhaps, remaining morale.

And as both its employees left, one, Orion, to run for City Council after only four months at the helm of the organization, it felt like a natural end. A new future under the GSBA umbrella made sense.

What does that future looks like? A dedicated Capitol Hill business development manager under the umbrella of the GSBA, said Chernin, who added that GSBA is hoping to fill the full-time position by the end of summer. GSBA will also hire another administrator who will devote half of their time to Capitol Hill-specific issues. A new Capitol Hill Business Alliance program will provide extra benefits to neighborhood members of the GSBA, including networking events. The roughly $30,000 remaining from the City’s 2019 grant for the CHCC is lined up to go to the GSBA.

But, Chernin said, an expanded BIA is not on the GSBA’s to-do list for now.

“The BIA in question is not being worked on any longer,” said Joe Mirabella, communications director for the Office of Economic Development.

Another, smaller BIA might soon see light on Capitol Hill.

Rainbow Natural Remedies owner Ross Kling of the 15th Ave East Merchants Association said he and other local business owners, of Uncle Ike’s, Ada’s Bookstore, Hunter’s Capital, NuFlours and others, are hoping to get a local 15th Ave BIA agreement before the City Council this fall.

Though, Kling added, they prefer to call it a CIA — a Community Improvement Area.

When asked whether he thought he’d run into the same problems as the BIA expansion, Kling said his group is ready to work together.

“This is more neighborhood based, we know the players, we’ve already done a lot of homework, we are confident this  will be beneficial for the community. When you widen the net, you got more challenges that way. (…) It’s going to be pretty easy to sell. I don’t think there’s a lot of controversy within the 15th Ave East community. It’s just us.”

 

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3 thoughts on “The Capitol Hill chamber — and with it an ambitious push for a neighborhood-wide business improvement area — is dead. What went wrong?

  1. The proposed BIA had 3 gaping problems that this article doesn’t cover:

    1. In addition to businesses, the tax applied to multifamily buildings (apartments, co-ops, condos, etc.). This itself is unusual, but it was even more unusual because the tax didn’t apply to single-family housing. The tax base was “Anyone who we can easily tax.”

    Beyond the awkwardness of a “Business improvement area” receiving a lot of its funding from residents, residents value different services than businesses.

    2. Those same stakeholders had no input into what the BIA would do, how its success or failure would be measured, what amount of funding the services were worth, or what proportion of the cost should be borne by residents.

    BIA proponents never even contacted multifamily buildings, let alone holding community meetings or otherwise soliciting input. The first time that most multifamily buildings heard about the BIA proposal was when they were notified of the tax.

    3. As proposed, it would have operated forever. Rather than propose a 1-year pilot which would need to be renewed with majority support, their proposal had no time limit. It could only be ended with more effort than any stakeholder would be likely to spend.

    If the BIA folks had chosen a logical tax base, asked that tax base what services they wanted, and proposed something that doesn’t last forever, it might have had a shot.

    • I especially agree on #2. The BIA and its $178,000 funds in 2012 was conveniently absorbed by the Chamber which never should have happened as a conflict of interest.
      In essence, the city Chamber supported their interests and not the community.

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