Business Improvement Districts As A Force For White Supremacy in Twenty-First Century Los Angeles

This is the most obvious and least dangerous form in which white supremacy expresses itself.
This is the most obvious and least dangerous form in which white supremacy expresses itself.
My colleagues and I spill a lot of metaphorical ink referring to business improvement districts and their Boards of Directors as white supremacists, and we certainly stand by that position. However, it’s recently come to my attention that not everyone in our audience is familiar with the literal meaning of the phrase. Evidently it strikes some people as a generic, semantically empty insult, or else they’re confused by the fact that the phrase refers to at least two fairly distinct ideologies. Thus I thought it would be useful to explain in detail why BIDs are in a very literal sense white supremacist organizations.

First let’s get the definitions straight. As always, our friends at Wikipedia give us a good starting place. Their article on white supremacy tells us that the phrase has two principal meanings. The salient one for our purposes is that white supremacy is:

…a political ideology that perpetuates and maintains the social, political, historical and/or industrial domination by white people

It’s crucial to note that there’s nothing inherently racist about this kind of white supremacy.1 Now, the history of the racial segregation of real estate in Los Angeles is well-known, and Hollywood was at the forefront of it from the early years of the last century. What’s not so well understood is how racially segregated the commercial real estate market was. In fact2 it was certainly more segregated than residential real estate, since white people owned much of the commercial real estate even in areas of the City where nonwhites were allowed to own houses.3

Furthermore, racial segregation in commercial real estate is far more persistent than it is in residential. Anecdotally it seems quite rare to find a house in Los Angeles that’s been passed down through four generations, but this happens all the time with commercial real estate. Alyssa Van Breene is only one example out of very many on the HPOA Board alone. There’s no reason at all to think these examples aren’t representative. This holds true across all BIDs I’ve looked at, and almost certainly holds true across the whole commercial real estate market in Los Angeles. It’s probably related to the fact that it’s really hard for extended families to share a residence, but it’s not hard at all for them to share ownership of commercial properties. This is how the effects of the now repealed segregation laws persist into the present and will persist into the future.

Thus the class of owners of commercial property in L.A. are more white than average due to outmoded, unconstitutional laws, overturned by the courts decades ago, but whose effects linger on due to the peculiar nature of the market. And racial segregation of commercial real estate was certainly an aspect of white supremacy. Political power flows from the ownership of real property at all levels of government in this country, so that if only white people, or disproportionately many white people, own real property, their social, political, historical and/or industrial domination is perpetuated and maintained.

Well, the Supreme Court struck down legal enforcement of racial restrictions in real estate transactions in 1948, and despite any number of revanchist attempts at reversal, some of them by organizations closely associated with HPOA E.D. Kerry Morrison, the power that white people have historically gained from their ownership of property might have been expected to fade away over time, even if the time scale was pretty long.

Next let’s talk about the structure of business improvement districts in Los Angeles.4 BIDs in Los Angeles are, with a few exceptions which I’m going to ignore for now, so-called “Property-based BIDs.”5 This means that owners of commercial property within the District’s boundaries are assessed to fund its activities, and only they are eligible to serve on the BID’s Board of Directors.6

Furthermore, the BIDs with which I’m familiar have self-perpetuating Boards, so after a while they all get really chummy with one another. They generally can’t be easily removed by the property owners in the District and the property owners don’t get to vote them in or vote them out.7 So no one outside the Board of Directors has any direct control over what the BIDs do. The Boards are under no social pressure whatsoever to do anything other than what they think is suitable or to stop doing anything other than what they think is unsuitable.

Now, BIDs are meant to supplement City services. They’re supposed to do more of the kinds of things the City does, e.g. tree trimming, sidewalk cleaning, and so on. Somehow this includes paying for private security patrols which, I guess, were originally considered to be a supplement to LAPD-provided police services. The crucial difference is, though, that when the City does these things, people have direct lines of input into how and why they’re done. If the City doesn’t trim the trees in your neighborhood, or trims them wrong, or something, you can call your Council District, and, because your Councilmember is elected and wants to be elected again, it’s possible that he or she will listen to you.

If the LAPD is doing a good job in your neighborhood, or a bad job, or you have a complaint about them, or you want to meet them and discuss things, they’ll generally accommodate you because the Mayor and the Council, all elected officials, control the LAPD through the Police Commission and, to some extent, directly.8 There are no such input channels for BIDs. If they send their BID Patrol out to harass homeless people even to the point of physically attacking them for no reason and you object, there is essentially nothing you can do. You can speak at their Board meetings but they have no incentive whatsoever to listen to you. You have no leverage with them at all.

Even their own “stakeholders” have no leverage with them. And they like it this way. Recall that in 1999 property owner Aaron Epstein sued the Hollywood Property Owners Association because they wouldn’t let even him, a stakeholder, attend their meetings or see their records. They fought him tooth and nail. And all the BIDs around the City at that time contributed money to their legal defense fund.9 Furthermore, in 2001 the City Clerk, whose office oversees BIDs as much as they’re overseen, proposed a mechanism for BID stakeholders to complain to the City about BIDs’ activities. Presumably this was in response to the fact that even stakeholders have no leverage.

Predictably, this was vigorously opposed by the BIDs, who don’t want anyone at all, not even the property owners whose interests they nominally represent, interfering in their activities. The Clerk backed off, as the City has done from every single attempt to oversee BIDs, and to this day, the Clerk refuses to oversee BIDs at all.10 This is in contradiction to the Clerk’s claim on this pamphlet about BIDs, which asks and answers a question:

Does the City monitor BIDs?

The Office of the City Clerk holds a contract with every BID and monitors their operations. Through reporting and regular audits, they ensure that each is operating correctly.

This is factually untrue. Los Angeles City Clerk Holly Wolcott has personally told me on a number of occasions, mostly while explaining why she won’t11 require BIDs to comply with their contracts no matter how egregiously they breach them, that the City has no control over BIDs whatsoever because they’re “entities wholly separate from the City.” The fact that the Clerk is appointed rather than elected adds yet another layer of protection for BIDs from the electoral pressures by means of which citizens assert control over those who exercise power in their names.

Another essential fact about BIDs is that they have practically unlimited access to City government. Here in Hollywood, Kerry Morrison and her staff meet with CD13 field deputy Daniel Halden once a month for breakfast, they exchange hundreds of emails a month with him, Mitch O’Farrell attends their soirees, the Mayor invites them to secret private meetings to discuss policy, and so on. Kerry Morrison doesn’t live in Hollywood, essentially none of her Board Members live in Hollywood, and yet, somehow, they have exponentially more access to CD13 and to influence City actions on Hollywood and the rest of the City than anyone who actually lives here does. The same is true with Carol Schatz and CD14, and I see nothing to suggest that it’s different anywhere in the City.

And don’t forget that BIDs are created by the City of Los Angeles. The process of forming a new BID is initiated in a Council Office, and carried out by the Clerk. It has been like this since the beginning, as the documentary history of the formation of the HPOA by then CD13 Councilmember Jackie Goldberg makes very clear. The fact that the activities of BIDs are so carefully insulated from any effective outside input or control must be a design choice, and the fact that the City is so intimately involved with the formation of BIDs means it must be the City’s design choice. So it must be serving an interest or interests of the City and its officials. It is also the City’s choice to give BIDs so much political access.

These facts combined suggest that the City’s purpose in creating BIDs is to manufacture wholly controlled sock puppets that are outside the normal political process, and which therefore insulate Councilmembers themselves from electoral politics and other inconvenient aspects of democracy. For instance, if they want to arrest homeless people for sitting on the sidewalk but activists and others make it chancy for them to advocate as extreme a position as they might like to do to please their very wealthy supporters, they get the BIDs to do it for them, all the while paying lip service to constitutional democracy. And then there was that time in 2013 during Mitch O’Farrell’s anti-Greater West Hollywood Food Coalition fiasco, when he was getting bad press from every quarter for trying to make the free distribution of food illegal on the streets of Los Angeles, so his then-field-deputy Steven Whiddon solicited Kerry Morrison to organize a letter of support from her zillionaire buddies, thus making it look as if his reprehensible actions were in response to a group of constituents when really the BID was just fronting for something he had already done.12

If the LAPD is reigned in by activism and scrutiny, well, enter the BID Patrol. The cops themselves make use of this manufactured electoral-free zone, see e.g. their recent attempt to hand off night-time policing in Hollywood to the BID Patrol, who certainly doesn’t have to answer to the Police Commission, or, for that matter, to anyone. The unprecedented access that the BIDs have gives City officials a sock-puppet that they can pass off as the will of their constituents. This is immensely expedient for elected officials.

They probably do still meet here for lunch so that instructions can be passed to city officials, but now they don't HAVE to do it that way.
They probably do still meet here for lunch so that instructions can be passed to city officials, but now they don’t HAVE to do it that way.
And the system is impressively efficient, as well. By handing these responsibilities off to property owners, they not only insulate themselves from the potential electoral consequences of their actions but they’ve given the actual zillionaire wielders of power a way to communicate their wants openly but under cover of what passes for democracy. This by far beats the old system, where they’d all get together in secret at the California Club to exchange instructions and money, but were liable to be seen by people who subsequently told reporters or Clifford Clinton or some other wrong person.

Finally, recall that the BIDs in Los Angeles are mostly property-based BIDs. This means that their stakeholders and their board members are property owners. The City could just as well have chosen to create business-based BIDs. And the set of business owners in Los Angeles is far, far more racially diverse than the set of commercial property owners. While business ownership was formerly racially segregated, there were alway significantly many businesses owned by nonwhite people, so that when segregation ended there were significantly many nonwhite people with the skills and knowledge to run businesses in every neighborhood. So the City could easily have created BIDs with racially diverse leadership, but has explicitly chosen not to do so.

Now, you haven’t forgotten about white supremacy, right? Well, the thing is that BIDs are purposely designed to be made up of powerful white property owners and only powerful white property owners. And they’re designed for this to happen automatically, with no one ever having to say “HEY! Let’s have only white people in charge of this segment of City government!” And because of prior racial segregation and the resistance of the commercial real estate market to change, these property owners are likely to stay overwhelmingly white into the foreseeable future. The City also chooses to give BIDs unprecedented political power. They’re allowed to run initiatives of their own with no oversight and they’re allowed to suggest policies and other City matters to the obscenely receptive City officials who installed them. Lastly, the City deliberately chooses to use property ownership rather than the much more racially diverse business ownership as the basis for BID formation.

Therefore the City of Los Angeles has deliberately chosen to create BIDs which are uniformly run by white people and to give these BIDs, and consequently the white people who run them, unprecedented political power that’s essentially immune to oversight by anyone, up to and including the City itself.13 This is how the City of Los Angeles has deliberately created a system which

…perpetuates and maintains the social, political, historical and/or industrial domination by white people.

And that, as we’ve seen, is the very definition of white supremacy.

The images of klansmen is by Martin and is available from Flickr where it was released under the CC BY-ND 2.0. Image of the California Club is via Wikimedia on the usual terms.

  1. The other one is the racist kind. Again according to Wiki it is: “a racist ideology centered upon the belief, and promotion of the belief, that white people are superior in certain characteristics, traits, and attributes to people of other racial backgrounds and that therefore white people should politically, economically and socially rule non-white people.” That’s not the way we generally use the term on this blog.
  2. I say “in fact” here, but I’ve been unable to find any discussions of this by academics, or essentially even by non-academics. For some reason it’s a more-or-less unaddressed problem in the history of Los Angeles, and even the United States. Thus my “in fact” is based purely on my own extensive observations, but they are extensive, and they are accurate.
  3. This is evident if you look at the racial composition of the Boards of Directors of the few BIDs in such areas, e.g. the South Los Angeles Industrial Tract BID. I’ve often wondered if there are fewer BIDs in South L.A. than in other regions of the City because the property owners in those districts, being mostly white, are reluctant to expose themselves in public. This is pure speculation at this point, although finding the answer is one of my long-term research projects. Note that SLAIT is the only South LA BID I’ve studied at all, but there are some others. They’re very hard to get in touch with, however.
  4. Quite possibly this discussion applies to BIDs elsewhere, but I neither know nor care enough about them to say.
  5. This is as opposed to “Business-based BIDs,” which I’m going to ignore for this part of the discussion. There are also “Tourism-based BIDs,” about which I know nothing beyond the fact that there is such a thing.
  6. I’m making a purposeful technical error here for the sake of clarity. The BID is actually the relevant geographical area. Each BID has a non-profit corporation known as the “Property Owners Association” which is the corporate entity that administers the BID under contract with the City. It’s the POA which has the Board of Directors rather than the BID. This distinction is immensely important for some purposes, but completely irrelevant for others, including this discussion. Hence I’m intentionally conflating the two concepts.
  7. The property owners are not generally members of the organization. Usually the organization doesn’t even have members (this is a crucial distinction in corporate law). The BIDs in L.A. often refer to the property owners in their Districts as “stakeholders.” This usage solves a semantic problem for BIDs but creates one for other people. E.g. I’m not a commercial property owner in a BID, but I live in a residential neighborhood surrounded on all four sides by BIDs. In the ordinary meaning of the word “stakeholder,” I am one in Hollywood. However, I’m not by any of the BIDs’ definitions.
  8. I mean ideally, of course. Although how incredibly much better are things than they were before 1992?
  9. I haven’t had time to write about this, but the evidence is there in the Board minutes of all the City’s older BIDs. They all saw Epstein’s suit as a threat. For that matter, they were right, it was a threat even if it’s taken decades for the threat to be realized. My colleagues and I are on the verge of either eliminating or at least severely weakening a BID or two, and without Epstein’s work none of it would have been possible (when I say “on the verge” I mean tactically rather than chronologically. These wheels grind slowly, slowly).
  10. This is another topic I haven’t had time to write much about yet, with the exception of the fact that BID security is somehow exempt from the requirement to register with the Police Commission. There are in fact about 8 different oversight requirements that ordinary City contractors are required to be subject to but which for one reason or another BIDs are exempted. The most latest matter is the Bureau of Street Services’ abortive attempt to regulate the trimming of City trees by private entities, including BIDs. It hasn’t happened yet, but the BIDs did whine about this, and Mitch O’Farrell backpedaled embarrassingly fast at the last committee meeting where it was discussed. Just watch when it comes back to Council for the BID-specific exemption that they’re writing right now if it’s not already written.
  11. She says she can’t, but she means that she won’t.
  12. This is yet another matter I haven’t had time to write on. If you want to see the evidence drop me an email and I’ll send it to you.
  13. Although the City likes it that way, and could presumably reassert its dominance if there were ever any reason to do so. That such a reason might be impressed on the minds of the City is not impossible, but it’ll have to come through outside pressure, as the City has too much to gain from the present system.

2 thoughts on “Business Improvement Districts As A Force For White Supremacy in Twenty-First Century Los Angeles”

    1. Thanks for the kind words. I’ve been studying these dimwits for two years now and I feel like I’m finally beginning to understand something about what they’re up to. It’ll make me happy if it helps you all in Venice, home town of my heart, fight off the beast…

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