The co-production of purified space: hybrid policing in German Business Improvement Districts

Abstract

Business Improvement Districts (BIDs) have evolved as an ‘innovation’ in urban governance supposed to function as a reaction to inner-city decay, emerging suburbs and the transformation of the retail industry owing to so-called ‘malling’ under ‘actually existing neoliberalism’. In the field of security, the interplay of public police and rent-a-cops being directed by ‘institutionalized lobbyism’ represents local governance regimes in exclusionary action. The paper analyses the concept of BIDs with regard to its controversial legal (constitutional), spatial and humanitarian impacts. Evidence for the critical challenges that are brought about by BIDs is taken from case studies in the City of Hamburg, Germany.

Keywords

Business Improvement Districts Germany Hamburg institutionalized lobbyism neoliberalization policing security

Introduction

In the context of what has been called ‘urban renaissance’ by some scholars (Imrie and Raco, 2003; Atkinson and Helms, 2007; Raco, 2007) and ‘actually existing neoliberalism’ by others (Brenner and Theodore, 2002; Peck and Tickell, 2002; Leitner et al., 2007), new urban policies emerged in Europe in the late 1990s. European cities suffered in the 1980s from de-industrialization that went hand in hand with welfare state retrenchment and cutbacks in social services (Jessop, 2002a; Mayer, 2007). From the late 1990s onwards, federal and local governments started to coordinate social policies, urban renewal and preventive policing strategies, for the most part in public–private partnerships (Anderson, 2009; Crawford, 2009; Eick, 2011). Also described as a move ‘from government to governance’ (Rhodes, 1997), one element of such developments – termed ‘roll-out neoliberalism’ by some scholars (Peck and Tickell, 2002) – has been the juridically backed introduction of Business Improvement Districts (BIDs) in public spaces (Hoyt, 2004; Wiezorek, 2004; Ward, 2006; Pütz et al., 2008; Cook and Ward, 2012; Marquardt and Füller, 2012; Peyroux 2012; Peyroux et al, 2012; Lippert, 2012). Briffault (1999: 368) defines BIDs as

a territorial subdivision of a city in which property owners or businesses are subject to additional taxes. The revenues generated by these district-specific taxes are reserved to fund services and improvements within the district and to pay for the administrative costs of BID operations. BIDs’ services are provided in addition to those offered by city governments. Most BIDs focus on traditional activities, such as garbage collection, street maintenance, and security patrols.

Mac Donald (1996) from the US think-tank Manhattan Institute situates BIDs within a moral discourse of cleanliness and order, stating that BIDs ‘have returned to an earlier set of values regarding public space’ and are a response to the flight of customers ‘to suburban shopping malls, where they didn’t have to worry about getting mugged or stepping in a pool of urine’. According to Ward (2007: 667), BIDs as ‘micro-spaces’ encourage inter-urban competition: ‘In contrast to the recent traditions of resource redistribution between places within cities, and between cities within regions, the Business Improvement District model builds on existing inequalities, effectively breaking up the urban sphere into competing units.’ Finally, even though one might argue against Parenti’s (1999: 96) contention that ‘BIDs embody all the power and privileges of the state yet bear none of the responsibilities and limitations of democratic government’, nevertheless BIDs in the German context represent ‘a process of state-sponsored gentrification’, to paraphrase Atkinson, (2004: 124), rather than an exclusively market-led renewal. The involvement of private owners in urban planning is, according to the German federal government (Brenner, 2010: 227), to be understood as an attempt to ‘boost government-backed efforts at establishing BIDs and HIDs [Housing Improvement Districts]’. Sprawling from the city centres (BIDs) to mixed neighbourhoods (Neighbourhood Improvement Districts, NIDs) and into residential areas (HIDs), this North American model of urban planning is most prominent on the European continent in the Free and Hanseatic City of Hamburg (Kreutz, 2009; Nicklaus, 2009; Brenner, 2010).

Before turning to the growing market of BIDs in Germany in more detail, the article first situates BIDs within the current form of urban capitalism. Secondly, this chapter analyses the development of Germany’s BIDs since 2005 – the year the first BID was established. Thirdly, in providing empirical evidence on the consequences of establishing BIDs in the City of Hamburg, the article further focuses on the semi-privatization of public spaces, the securitization of urban space by state police and private security companies (semi-privatization of policing), and the subsequent exclusionary effects for the ‘undesirables’. Fourth and finally, the article deals with the legal (i.e. constitutional), spatial and humanitarian impacts of BIDs and draws some conclusions about the development of the concept in German cities.

The semi-privatization of urban space

In the German context, researchers claim that BIDs can be understood as a result of and reaction to inner-city decay, emerging suburbs and the transformation of the retail industry owing to so-called ‘malling’ (Kreutz, 2009; Nicklaus, 2009) but are also meant to address ‘demographic change, economic restructuring, and challenges of integrating immigrant groups’, according to the federal government (Brenner, 2010: 220). Indeed, many inner cities are in decline, urban sprawl is a widespread phenomenon in, at least, west Germany (whereas the cities in the eastern part of Germany are dramatically shrinking) and shopping malls have become the main ‘product’ of the retail industry on the city outskirts since the 1980s; only today are they beginning to invade the inner cities (Eick, 2008).

Nevertheless, the socioeconomic restructuring of German cities is embedded in a far more general long-term trend: the neoliberal reorganization of capitalism, or ‘actually existing neoliberalism’ (Brenner and Theodore, 2002). The socioeconomic restructuring of German cities through ‘urban entrepreneurialism’ (Harvey, 1989) led local governments to place-marketing, enterprise zones, tax breaks, public–private partnerships and the like (Hollbach-Gröming and Grabow, 2005; Sinning, 2007). The current urban forms of governance have become entrepreneurialized, ‘emphasizing economic efficiency, low taxes, individual responsibility, and user fees; the most important goal of urban policy has become to mobilize city space as an arena for market-oriented economic growth’ (Mayer, 2007: 91). According to Hamburg’s Chamber of Commerce (CoC), leading state and federal politicians and bureaucrats, BIDs are to be understood as an instrument to enhance (inner-city) competition and promote private–public partnerships, and, in the Hamburg case, as an expression of the ‘growing city’ model (DIHK, 2007; Gedaschko, 2008), while political stakeholders such as the Green Party, until recently governing Hamburg in a coalition with the Christian Democrats, perceive BIDs as ‘civil society in action’ (cited in Töpfer et al., 2007: 512).

This trend in urban policy can, firstly, be described as devolution – the shifting of responsibilities from the national to the local scale. As Swyngedouw (1997) has shown, the global and the local are interlinked in a process of ‘glocalization’, through which occurs the simultaneous shifting of regulatory tasks (and the creation of corresponding institutions) from the national scale to supranational and local scales. Peck and Tickell (2002) differentiate further and identify an initial phase of proto neoliberalism when cities became flashpoints for major economic dislocations and struggles; an era of roll-back neoliberalism in the 1980s, when municipalities introduced a variety of cost-cutting measures and privatization of infrastructural facilities; and the phase of roll-out neoliberalism, which, since the 1990s, has responded to the contradictions of the earlier zero-sum form of entrepreneurialism (Harvey, 1989; Mayer, 2007). BIDs represent a particular form of devolution as urban management of designated neighbourhoods is taken over by local business communities while, at the same time, a growing number of property owners are global players (for Hamburg, see Comfort, 2008; Krüger et al., 2010). Even though devolution does not necessarily go with neoliberalization – see, for instance, a more neocommunitarian form of devolution in the case of the ‘New Deal for Communities’ in the UK (Coaffee, 2010) or the ‘Socially Integrative City’ programme in Germany (Eick, 2011) – the conceptualization of BIDs in Germany, and in Hamburg in particular, mirrors neoliberal characteristics as developed by Jessop (2002b), among them the promotion of free competition, deregulation by reducing the role of law and the state, privatization through the sell-off of the public sector, and the introduction of market proxies in the residual public sector.

Secondly, and in the German context, urban entrepreneurialism creates ‘monied oligarchies’ in an ‘informal constitutional state’ (informeller Rechtsstaat), as Bohne (1981) has shown. The process of urban BIDization, thus, is the institutionalization of lobbyism coordinated by local urban regimes (Lauria, 1997). German BIDs, as an expression of the informal constitutional state, rebalance competition and cooperation, decentralize ‘regulated self-regulation’, widen the range of private, public and other ‘stakeholders’ and expand the role of public–private partnerships, thus mirroring what Jessop (2002b) called a ‘neocorporatist’ form of neoliberalization. In Hamburg, the CoC is coordinating and overseeing the currently eight BIDs (DIHK 2007, 2009) and is thus dealing with destination management and ‘coopetition’ – a neologism built from the words competition and cooperation (Monheim, 2007). According to Parenti (1999: 96), BIDs have to be understood as ‘private, self-taxing, urban micro-states’. This is, obviously, a description of BIDs functioning in US cities such as New York or Los Angeles where local governments are highly dependent upon their own source revenues and are to be characterized ‘as one of the most fragmented and pluralistic urban systems in the world’ (Kantor, 2010: 2). This is clearly not the case in Germany, where local governments are co-funded by the state and federal level, and urban planning and urban development until recently used to be an exclusively public task executed by public administrations only. For this very reason, the introduction of BIDs marks a decisive shift in Germany’s urban development policies (Deutscher Bundestag, 2009: 9; Brenner, 2010: 227). Further, BIDs are understood by local governments as blueprints for a new structure of cities in general (Gedaschko, 2008; Brenner, 2010). Additionally, BIDs represent a new form of urban governance because they signify a new appearance of institutionalizing growth coalitions, in the Hamburg case spearheaded by property owners and the CoC. As a further move – again led by property owners, with tenants not having a say (Kreutz, 2009) – local administrations and the CoC are experimenting with NIDs and/or HIDs, thus institutionalizing private co-governments in residential areas as well (Krüger et al., 2007; Kreutz, 2009).

Thirdly, the semi-privatization of public space by BIDization goes hand in hand with the semi-privatization of policing in an ‘extended policing family’ (Crawford and Lister, 2004). Rent-a-cops are conquering public spaces worldwide (Jones and Newburn, 2006; Henry and Smith, 2007). And as we know from the BID projects in cities as diverse as Glasgow (Helms, 2008), Toronto (Rigakos, 2002) and Los Angeles (Eick, 2007) and from neighbourhood improvement programmes such as ‘New Deal for Communities’ in the UK (Adamson, 2004) and the ‘Socially Integrative City’ programme in Germany (Eick, 2003), non-profit organizations deploy the long-term unemployed as quasi-police forces (Eick, 2011).

To summarize, BIDs in the German context of urban development are one form of devolution under ‘actually existing neoliberalism’, they are an institutionalization of the well-known lobbyism, and they further clear the way for the extended policing of public space. Finally, they are intensifying uneven development in urban environs (Ward, 2007) as well as inner-city competition, the latter being seen as one of the decisive elements for urban growth in Hamburg (Gedaschko, 2008; DIHK, 2009). By the same token, and inasmuch as neoliberalism plays out differently at different times and in different places, BIDs differ in their construction, contestation, creativity and consequences (Töpfer et al., 2007; Pütz et al., 2008), as the Hamburg case below shows. The BID Neuer Wall, for instance, had already confirmed ‘accretions in property values’ (Binger and Büttner, 2008: 133) within its first three years, allowing for massively increased ‘rents now above €200 per square meter and month’ (Comfort, 2008: 3), thus leading local and international real-estate investors to take over property within BIDs and future BIDs in the inner-city (Comfort, 2008: 5), with ‘foreign investors accounting for close to 75%’ of all investors (Comfort, 2008: 6).

It is to the analysis of the legislative background from 2004 onwards – when the first Chambers of Commerce and business communities demanded to take over parts of urban development in Germany – that the article now turns.

The BIDization of Germany

As noted, urban development in Germany is, or used to be, the exclusive task of state administrations. The respective responsibilities are divided between the nation-state, the Länder and the municipalities. It is the municipality that has the greatest influence ‘on the ground’. The nation-state and the federal states frame the general development goals (including subsidies, special programmes and financial reallocation).

Generally speaking, the federal government needed to create the legal background for the Länder to allow them to introduce the laws that permit the creation of BIDs by private means. The business communities (or, in some cases, the local governments) then apply to create a BID in ‘their’ particular city district. Depending on the specific Länder legislation, a majority of at least 51 percent in favour of creating a BID, or less than 30 percent opposing the BID creation, permits the creation of the BID. Each property owner or business pays a fee according to the square metreage of his or her office or shop. The fees are collected by the local government to build BIDs. Finally, the property owners within a BID elect a board of directors who channel the collected funds to various activities, usually including sanitation, street cleaning, street improvements, additional policing activities and marketing for the business neighbourhood.

The article does not go into the legal details here, but it briefly outlines one particular extension of the national building law (Baugesetzbuch) that came into effect in 2007. In July 2007, the federal government introduced a new section in the building law – called ‘private initiatives for urban development’ – which states that in ‘accordance with the respective national state laws . . . territories can be mapped out, in which location-oriented measures can be accomplished under private responsibility’ (cited in Söfker, 2007).

Germany-wide, two main approaches to BIDs can be identified.¹ A model based on voluntary participation offers pilot projects that to a greater or lesser extent are financed initially through national government, Länder or municipal funding to develop so-called location communities (the landowner model). The second model is the legislative model, which comes with a contract, under which the payment of a tax or fee can be enforced; this is the main difference from the first model. Nevertheless, participants in the various proprietor models (Abraham, 2006) perceive their initiatives as ‘future BIDs’ (DIHK, 2007: 1). Therefore, the question is not whether the legislative model will hold sway, but within what timeframe it will prevail.

In 2009, BID legislation was applied in 6 of the 16 German federal states.² Some states are still discussing the introduction of this model, or are testing voluntary and publicly funded variations of BIDs (Sammiller, 2009). How is this diversity within Germany to be explained? The cities in the eastern Länder, including Berlin, do not operate BIDs and are not planning to do so, not least because their business communities lack the financial resources that are said to be a precondition for starting BIDs (Gross, 2005; Kreutz and Schote, cited in Meyer, 2010: 74) or the cities do not have purely business streets, which are seen as a requirement to avoid conflicts between tenants and businesses (Puppe, 2004; Sethmann, 2005). Further, given the history under state socialism, the business community remains reluctant to accept either state- or business-induced obligations to operate bondage-based BIDs. In 2003, Bavaria decided not to operate BIDs for juridical reasons because the government understands that ‘compulsory membership [is] in opposition to the constitutionally protected negative freedom of association’ (Stoiber, 2003: 2), i.e. the right of individuals to refuse to associate with others in collective organizations; Baden-Wüerttemberg shares these concerns (Landtag Baden-Württemberg, 2006; see below). On the other side, Hamburg and Bremen – the first Länder to introduce BIDs in Germany – were at the forefront of introducing BIDs, because, according to Wiezorek (2006: 13), of their history as member cities in the Hanseatic League (in the 12th century), referring to, profiteering from and remaining path-dependent on their merchant history of entrepreneurialist independence. In addition, Hamburg is both a city and a Land (federal state), which allows for easier and less contested coordination of urban planning projects (Huber, 2007: 471). Finally, the senate of Hamburg openly supported BID-building, not only through propaganda but also by subsidizing their introduction financially, mainly through investments in infrastructure such as streets and pathways (see below).

The other states have refused to introduce BIDs as a legal instrument, stating that a voluntary move by the business community in order to enhance competition would be preferable. It is for this reason that, Germany-wide, there are about 100–200 BIDs or BID-like projects, but currently fewer than 30 fall under the definition of legislative regulation. The City of Hamburg has the most sophisticated concept and is in the vanguard in terms of legislation and practising the BIDization of public space.

Hamburg: enhancing coopetition and getting rid of the ‘undesirables’

The Free and Hanseatic City of Hamburg is Germany’s second-largest city and economically its most powerful, having a gross domestic product of €49,100 per capita (WirtschaftsWoche, 2011: 9) and almost 1.8 million inhabitants. It is a city-state (one of the 16 German federal states) and it was the first government to introduce a BID law in Germany. The Law to Strengthen Retail and Service Centres came into effect in January 2005.

As early as 2006, six BIDs in the districts of Bergedorf, Mitte, Wandsbeck and Harburg were under construction or in operation. As of April 2011, the inner-city was divided into 31 subsections, of which 14 have been or are to be transformed into BIDs in order to support the ‘concept of the Growing City’ (Gedaschko, 2008: 25), complemented with additional growth projects and programmes (Bürgerschaft der Freien und Hansestadt Hamburg, 2009) – thus exemplifying what Graham (2001: 365) calls a model of ‘splintered street management’. Private landowners will invest €13.4 million (for the then six BIDs) in order to ‘boost their respective district in an all encompassing competition’ (DIHK, 2009: 14).

In the five years since the BID legislation – the ‘law on demand’, as Huber (2007: 272) calls it – eight BIDs have been created in Hamburg. The first (BID Sachsentor) is in the centre of the Bergedorf district and the second (BID Neuer Wall) covers the exclusive and expensive shopping street in the city centre. Both BIDs started their operations in 2005. Two more BIDs were established in the summer of 2008 in the districts of Wandsbek (BID Wandsbek Markt) and Harburg (BID Lüneburger Straße). In 2009 and 2010, the districts of Mitte and Nord established BIDs as well. The seventh BID (BID Tibarg) started in November 2010 in the district of Eimsbüttel with a budget of €350,000 annually. Six more BIDs are under construction, five of them located in the city centre in the Mitte district (Freie und Hansestadt Hamburg, 2011; see also Table 1).

Table 1.

Business Improvement Districts in Hamburg, as of April 2011

BID	District	Plots	Millage rate (%)^a	Budget (€)		Duration
BID	District	Plots	Millage rate (%)^a	Total	Per year	Duration
Active BIDs
Alte Holstenstraße	Bergedorf	42	1.70	330,000	110,000	3 years
Sachsentor I (finished)	Bergedorf	83	0.42	150,000	50,000	3 years
Sachsentor II	Bergedorf	101	3.20	600,000	120,000	5 years
Tibarg	Eimsbüttel	32	8.60	1,750,573	350,115	5 years
Lüneburger Straße	Harburg	65	3.21	548,400	182,800	3 years
Hohe Bleichen	Mitte	19	8.20	1,947,500	389,500	5 years
Neuer Wall I (finished)	Mitte	54	8.40	5,996,000	1,199,200	5 years
Neuer Wall II	Mitte	54	4.30	3,184,100	636,820	5 years
OXBID	Nord	19	7.05	172,653	57,551	3 years
Wandsbek Markt	Wandsbek	65	9.64	3,990,000	798,000	5 years
Planned BIDs
Osterstraße	Eimsbüttel	130	n.a.	n.a.		n.a.
Mönckebergstraße	Mitte	20	n.a.	2,000,000		n.a.
Nikolai-Quartier	Mitte	69	n.a.	9,000,000	1,800,000	5 years
Opernboulevard	Mitte	18	9.70	2,175,000	725,000	3 years
Passagenviertel	Mitte	22	7.00	5,000,000	1,000,000	5 years
St. Pauli	Mitte	120	n.a.	1,500,000		n.a.

Note:

A property tax assessed as a percentage of the basic value of the plot.

The BIDs differ in the number of participants, the area covered, budgets, tasks and aggressiveness towards ‘undesirables’. The largest BID, Neuer Wall, spent nearly €6 million over five years up to 2010, and has an additional budget of €2.3 million for the period 2011–16 (Freie und Hansestadt Hamburg, 2011; also see below). BID Sachsentor (also in its second term) increased its budget from €150,000 in the first period (2005–9) to €600,000 for the next five years (2010–14), of which €128,000 is targeted for graffiti removal, cleanliness and security issues (Freie und Hansestadt Hamburg, Bezirksamt Bergedorf, 2008: 14; BID Sachsentor, 2011a). All budgets are completely privately financed by the property owners in the particular area – even though additional monies are invested by the respective local administrations and/or the senate; in the case of BID Sachsentor, additional subsidies stem from the senate for the pedestrian zone (Binger et al., 2007: 6) and the senate-led subsidy programme for industrial cleaning (BID Sachsentor, 2011b). BID Sachsentor, whose membership has grown from 83 to 101 participants, is concentrating on small-scale marketing, graffiti removal and maintenance activities, aiming at ‘further extending the frequency of customers and visitors’ (BID Sachsentor, 2011b).

The second BID in Bergedorf, BID Alte Holstenstraße, started in April 2009 with an annual budget of €110,000, a focus on graffiti removal and with several additional cleanliness campaigns (WSB, 2009). The BID Tibarg in Eimsbüttel started in October 2010 and hired a so-called ‘Tibargmeister’, i.e. a caretaker for safety and security measures in the BID with an annual budget of more than €25,000, or more than 10 percent of the total BID budget (Arbeitsgemeinschaft Tibarg, 2010).

Similarly, the four BIDs established in 2008 and 2009 have differing budgets but similar priorities. BID Wandsbek Markt is to spend almost €4 million over five years, focusing on the ‘reorganization of public space’ and ‘street furniture’ (Freie und Hansestadt Hamburg, 2009: 1); an additional €750,000 will come from the City of Hamburg in order to clean up sidewalks. BID Lüneburger Straße will spend about €600,000 over three years on cooperation, marketing and the management of public spaces. The senate financed the renovation of streets, and an additional €250,000 came from one of the largest real-estate companies in Germany, ECE (Gibb, 2008); ECE runs most of the shopping malls in Germany, including one in the immediate vicinity of BID Lüneburger Straße. Further, OXBID, the BID in Hamburg-Nord, was the first BID to encompass a local supply centre and, at the same time, the first trans-border BID to cooperate with the neighbouring state of Schleswig-Holstein, which also runs BID programs (Freie und Hansestadt Hamburg, 2010). The total budget for OXBID is more than €172,000 for a three-year period (Freie und Hansestadt Hamburg, 2010). Finally, BID Hohe Bleichen/Heuberg has a budget of almost €2 million for a five-year period and focuses on the reorganization of public space; in its first year (2009), it received subsidies from the senate (€190,000) and the energy company Vattenfall (€10,000) (BID Hohe Bleichen, 2009: 6).

As will become clear, direct competition within the business communities and between districts is not a side-effect of urban development by the Hamburg senate. Further, unlike neoliberals would have it, state subsidies have been and are an important incentive and driver for Hamburg’s BIDization. Additionally, not only does the district of Mitte host 50 percent of all BIDs, but these have by far the largest budgets at their disposal (Table 1); this is deepening the gap between the richest and the poorest districts in the inner-city (Statistik Nord, 2010) and building the so-called ‘poverty belt’ around the BID enclaves (Abendblatt, 2010). The district of Wandsbek hosts the fourth-largest BID in terms of monies available (BID Wandsbek Markt), and is also a comparatively rich district (Statistik Nord, 2008: 13–14). Finally, the millage rate (a property tax assessed as a percentage of the basic value of the plot) shows that the financial capacities of the BID members vary significantly; again, BIDs in Mitte and Wandsbek are the only ones that can afford rates above 8 percent of the property value (Table 1).

The BID law in Hamburg has a set of specific attributes. BIDS are funded by real-estate landowners in the designated areas, and not by local businesses as in the UK BID model (Cook, 2008); additionally, the BIDs are established without a legal entity ‘in order to avoid compulsory establishment’ (Huber, 2007: 468). In Hamburg, the proposal for a BID needs the backing of only 15 percent of the landowners in the envisaged BID.³ If less than one-third of the affected landowners (in terms of both numbers and size) explicitly reject the proposal (veto), the BID will be designated by a public statute. The designation will affect all property owners within the BID boundaries, who have to pay an additional statutory levy based on the value of their property (thus overcoming the ‘free-rider’ problem). This is why the proponents of BIDs advertise them with the slogan ‘to bid for bondage’ (Goldschmidt, 2010: 118). Businesses, residents or other parties do not have the right to vote on a BID proposal; only landowners decide. In order to analyse current activities within BIDs, the article now turns to BID Neuer Wall.

BID Neuer Wall

The prelude to BID Neuer Wall dates back to the early 1990s when, under the guidance of the CoC, the property association Neuer Wall e.V. was founded ‘by very few people’ in order to create ‘a unified counterpart to the city’ (Nicklaus, 2009: 59). In 2003, it was again the CoC that informed the then 55 landowners about the opportunity to build a BID. Because of the greatly increased membership, a steering committee was immediately established in order ‘to be able to act’ (Nicklaus, 2009: 59). The executive board of local shop owners, organized in the syndicate Interessengemeinschaft Neuer Wall, was integrated into the 12-strong steering committee. The idea of building a BID did not arise because of the ‘existence-threatening economic difficulties of individual traders’; the property association was aiming for a better outward appearance of the public space, which was ‘seen to be inconsistent with their exclusive shops’ (Nicklaus, 2009: 59). In January 2005, BID Neuer Wall was established with a budget of €6 million until the end of 2010.

In 2006, €2.3 million was invested in redesigning the public space in the run-up to the FIFA World Cup (Neuer Wall Hamburg, 2005: 20). The BID received public investments for a completely new streetscape to mirror the exclusiveness of the shops and companies residing there (e.g. Armani, Bulgari, Boss, Cartier, Jill Sander, Louis Vuitton). Street-cleaning services were enhanced, and a private service and security team was set up making use of the Segway PT, a two-wheeled, self-balancing electric vehicle (Spiegel, 2007).

Since then, the focus of spending has shifted to services such as cleaning the sidewalks and controlling the ‘the utilization of parking and delivery zones according to the local by-laws’ (Neuer Wall Hamburg, n.d.). The latter practice means that employees of the BID Facilities Management – having received legal advice from the police beforehand – can press charges against parking offenders. In turn, a formerly public task has been transformed into a private business by outsourcing traffic control. The BID’s security service not only replaces but also criticizes the police by constantly pointing out, as a BID spokesperson puts it, ‘deficits in enforcement’ (cited in Rebaschus, 2006). As this statement makes clear, not only cooperation and cooptation but competition between the police and the BIDs’ security personnel are intrinsic ingredients of the neoliberal city. However, most services are carried out by the private security and service personnel ‘in cooperation with the police’ and, as the official website states, the police ‘cooperate with the private security personnel’ (Neuer Wall Hamburg, n.d.). This form of hybrid policing, ranging from directing traffic to controlling beggars, is more likely to occur in areas that in one way or another are subject to urban regeneration and/or crime prevention programmes (Eick, 2011). By the same token, commercial stakeholders, particularly within programme areas such as BIDs, are better equipped to demand and to deploy action and monies on their own behalf. It is in this vein that the then-governing mayor of Hamburg, Ole von Beust, stated in an interview about BIDs that ‘those who spend the money are free to decide what’s going to happen with it’ (Abendblatt, 2005a) – or, somewhat more sophisticatedly, ‘He who pays the piper calls the tune’.

A telling example, dating back to the mid-1990s and finally taking advantage of the FIFA World Cup in 2006, concerned a proposed ban on begging in the inner-city. It illustrates that BID security staff not only act as the ‘eyes and ears’ of the police in order to get rid of and profit from parking offenders but clearly perceive the ‘urban poor’ as a central target as well.

In 1996, the then-Senator of the Interior, Hartmuth Wrocklage, failed in an attempt to target beggars and the homeless. Because the parliament did not support repression against the urban poor, preventive measures were taken instead. In February 2002, in order to put a stop to citizens and tourists making direct donations to the urban poor, collection boxes were put in 71 shops and banks in the inner city of Hamburg as part of a ‘Shelter for the Homeless’ programme. According to the city’s administration, the boxes were meant to ‘provide philanthropic citizens with an alternative to direct donations’ to the homeless (Töpfer et al., 2007: 526). This campaign came on the heels of a proposal by the faith-based ‘Round Table of St. Jacobi’, a non-profit charity. The plan was backed by suggestions from ‘City Management Hamburg’, an association of 450 companies aiming to enhance the attractiveness of Hamburg’s downtown, some of whom later participated in BID Neuer Wall.

Downtown business people were not happy with the decision and, immediately after the establishment of BID Neuer Wall, made a new repressive advance in December 2005 in stating it is ‘obvious that the inner-city is not a welfare station’. Given the presence of ‘crippled’ beggars ‘organized in gangs . . . stemming from Bulgaria’, the CoC voiced ‘urgent demands for action’ with the support of the local media (Abendblatt, 2005b). Then-Senator of the Interior, Udo Nagel, seconded the demand immediately, but lost to a majority in the senate and the city’s parliament (Abendblatt, 2005c).

However, the district of Hamburg-Mitte and its office for public order found a window of opportunity: the FIFA World Cup. In May 2006, the administration, charging that the begging was ‘gang-like and professionally organized’, deprived the Bulgarians of their right of access. The CoC appeared to be overjoyed by the district’s initiative, especially in its contrast to the Senate’s ‘inability to act’ (cited in Abendblatt, 2006). Such criticism shows that BIDs are local urban regimes ready to ‘defend’ themselves against perceived ‘threats’, and thus tend to be in contradiction to the overall city policies. Although the advocates of this eviction policy have been at pains to emphasize that banning beggars should be coupled with the provision of outreach services, many initiatives are nothing more than an unfriendly reminder of Winnipeg’s deterrence policy (Carter et al., 2007; DeVerteuil and Wilton, 2009: 469).

Among the current 14 BIDs either in existence (8 BIDs) or under way (6 BIDs) is the future BID in St. Pauli with 120 plots. St. Pauli is a well-known red-light and night-time economy district, and local business people, supported by the Department of Urban Development, the municipality of Hamburg-Mitte and the CoC, announced BID plans (Freie und Hansestadt Hamburg, 2007: 2) that included the deployment of video surveillance. In addition, the use of private security companies is under way in several BIDs, such as in BID Alte Holstenstraße, where ‘cooperation between the BID management, the sanitation department . . . and a private security company has been established’, the latter receiving €20,000 per year (WSB, 2008: 4, 7). Of the eight existing BIDs in Hamburg, five have deployed private security personnel, two of them with a focus on graffiti removal, and all of them are concerned with cleanliness and order (Freie und Hansestadt Hamburg, 2011).

With the extension of the ‘policing family’ from state police into the realms of rent-a-cops, the boundaries between state police and private police are becoming more blurred (Henry and Smith, 2007). Aside from these more or less aggressive activities against ‘undesirables’ deployed or projected in order to ‘purify’ space, it is essential to highlight more general trends that are accompanying the introduction of BIDs and their public–private management. Here, three of these trends are to be highlighted: the legal, spatial, and humanitarian impacts.

Understanding security semi-states

Because of the blurring boundaries in security management, it is more than justified to question the claim made by Hamburg’s Department of Urban Development and Environmental Affairs:

The partnership between the BID and the city does not change anything with regard to the duties of the city or of the respective departments and institutions performing their sovereign tasks. Sovereign tasks are not handed over to private stakeholders within the BID structures. Even though the BID service personnel provides for an increased standard of security and cleanliness, all measures of security and order remain in the hands of the city. (BSU, 2006: 49)

Rather, a creeping commodification of licensed state functions can be witnessed, which might be associated with a serious deprivation of democratic oversight and control in Germany.

Legal insecuritization and de-democratization

First, in as much as shopping malls, pedestrian zones, railway stations and BIDs are good locations for profit generation, they are also of great importance for those who lack the capacity or refuse to participate in high consumption – beggars, the homeless, drug users, prostitutes, migrant youths. For them, the current efforts to privatize urban space necessarily imply their insecuritization. BIDs are part and parcel of these exclusionary policies.

Second, the strategies and day-to-day business of the police have always been shaped by the interests of (inner-city) capital. But, with the institutionalization of BIDs, police officers tend to metamorphose into simple puppets or henchmen of the BID management (Rigakos, 2002). BID managements are gaining increased influence over urban security policies and, accordingly, over the space-strategic priorities of the state police. At the same time, these practices, owing to the opaque regimes of public–private decision-making, evade any meaningful democratic control.

Third, and more generally, the rule of law is involved in fundamental ways. This section starts with a somewhat abstract point in order to clarify the legal impact of BIDs. The separation of state and society and the dissociation of the social and economic spheres from the political and legal spheres are, at least in theory, the basis of the constitutional state under capitalism (Böckenförde, 1991: 209–15), because it is only under such conditions that the formal rational law can be applied equally to all elements of society – to those in power and to those without; to heavy hitters and to those with less influence. This is one of the differences between the feudal medieval system and the modern state.

The separation of the public and the private spheres allows the public sphere to claim to act on behalf of the general public, i.e. to pursue universal public interests and not particular private ones. But it has long been observed that the separation of the public and the private is undercut by informal agreements and barter arrangements so that the influence of those who prevail in society can be safeguarded politically as well; in a word, lobbying. In different ways, those who prevail in society secure greater influence for themselves in the formally separate sphere of political decision-making. Structurally stronger interests triumph over weaker ones through all kinds of mechanisms ranging from informal agreements, arrangements and corruption to political ‘extortion’. Eberhard Bohne (1981) described this phenomenon of political lobbying as ‘the informal constitutional state’.

To make this point a more meaningful one in the BID context, since the early 2000s a novel development has emerged in Germany. What in the ‘informal constitutional state’ used to be negotiated informally between public administrations and business interests has turned into bargaining within a legally institutionalized board; in our case, the platform of a BID management board. Such platforms are particular examples of what representatives of (national) governments refer to as the ‘activating state’ and public–private partnerships. For the benefit of oligarchic decision-making, politics and parliamentary democracy resign, and the realm of ‘civil society’ abdicates as well.

At first blush, constitutionally it seems to be no problem when private stakeholders get involved with charitable activities beyond their actual business and duties. At second glance, however, it becomes clear that the borderline between the private and the public is becoming blurred and that private stakeholders with particular interests are taking over tasks of the commonweal and, thus, also are determining the commonweal’s content. Further scrutiny reveals that within the BIDs a fraction of the citizenry – the land and property owners, – have to pay a levy (including those who opposed the BIDization).⁴ Finally, and challenging the German constitution, it is not the public administration but private stakeholders who decide what the levies are used for.

The decision-making process on tax disposal by the public administration is said, according to bourgeois democratic theory, to make it more likely that the state apparatus will decide on behalf of the commonweal. This principle is violated if the taxpayers, and only they, decide on their own for what purpose the levied monies ought to be used. Therefore, BID systems can be analysed as the return of ‘proprietor democracy’ (Fisahn, 2008: 339). The municipal administration, legitimized by general elections, is disempowered in several ways. Decision-making is split between the oligarchic ‘self-management’ of the BID proprietors (whose management, internally, does not even need to be democratically organized) and the federal state (which lays down legislation that is superior to municipal rules). As mentioned above, BIDs involve ‘compulsory membership’ for those in opposition to BIDs. In 2008 and 2010, several attempts were made in the courts to prevent these levies and to legally challenge BIDs on a constitutional basis (Urban Improvement Districts, 2011). Even though these attempts failed, several scholars (Schreiber and Eick, 2005; Fisahn and Viotto, 2006; Garbers, 2007: 317–20) and politicians (Stoiber, 2003) have argued that BIDs do violate the German constitution. However, the decision-making process not only affects the local administration and proprietor ‘self-management’, but also has massive effects on non-proprietors and the district within which the BID is located. The article therefore now turns to the spatial impacts of BIDization.

Redefining public space

Even though BID areas remain publicly owned, individual private stakeholders can engage the state apparatus on behalf of their particular interests in designing and organizing ‘their’ district. BID Tibarg, for example, stated in its BID application that the ‘area close to the bus station is a popular location for marginal groups . . . the area should be sanitized’ (BID Tibarg, 2010: 28); other BIDs such as Neuer Wall or St. Pauli also aim at defining who should have access to ‘their’ spaces (Töpfer et al., 2007).

The municipally-controlled street system that once acted as an effective monopoly of the public realm in many cities today is being paralleled by the growth of a set of privatized street spaces – including but not limited to shopping malls, privatized railway stations and privatized streets and squares, as well as BIDs. The abandonment of the principle of free, open and democratic access to public space (on the hollowness of such claims, see Eick and Briken, 2011) in favour of a policy of actively excluding (and/or incarcerating) those deemed not to belong is key to the logic of these spaces (Belina, 2007; Eick, 2008).

Further, BIDs are private space regulators. As Graham (2001: 365) has shown, BIDs can be understood as a ‘model of splintered street management’. Based on the idea of applying the principles of mall management to traditional commercial streets – in effect creating ‘malls without walls’ – BIDization is a ‘big good-bye’ to the German urban development model of the Keynesian-Fordist compromise. Consequently, the goal of equality of living conditions – codified in the German constitution – is being strongly contested (Barlösius, 2006). Additionally, as several authors have shown (Eick, 2006; Fischer-Lescano and Maurer, 2006), the private management of public spaces tends to undermine freedom of expression, and, in spatial terms, weakens the democratically vested interest in a nexus between the criticized societal practice and the space where the protest against or the expression of opinion about the criticized takes place. The German Federal Constitutional Court, for example, ruled in 2006 that demonstrations are not allowed at airports – in Frankfurt/M., protesters wanted to criticize the German airline Deutsche Lufthansa for its participation in the eviction of migrants (Fischer-Lescano and Maurer, 2006). Only because the majority of the airport’s shares belong to the state, this decision was overturned by the same court in February 2011 (Van Appen, 2011). Finally, as a consequence of models such as BIDs, NIDs and HIDs, a new understanding of ‘public’ space has been institutionalized in the city centres – and beyond. As for NIDs, Germany even takes pride in being the forerunner in ‘old Europe’ (Brenner, 2010); no other European country so far is heading for the establishment of Neighbourhood Improvement Districts (Kreutz, 2009).

Excluding the ‘superfluous’

BIDs can produce socially excluding effects. Expulsion strategies – legally secured by laws of the federal states, municipal by-laws and police edicts – are executed in a division of labour between a hybrid network of rent-a-cops, commercial ‘BID ambassadors’, municipal wardens, police squads and CCTV systems, thus creating new ‘geographies of policing’ (Yarwood, 2007). Whereas the commercial organizations and municipal wardens as a rule act as ‘the eyes and ears of the police’, the police have the monopoly on force. In some cases, however, even this specific state monopoly has been extended to private security companies, as shown by the case of BID Neuer Wall.

In as much as BIDs, according to their own claims, take on the ambitious role of acting as ‘the economic development tool for the 21st century’, in the sense that they ‘dramatically increase the commercial activity, improve property values and provide a source of civic pride’ (Jones et al., 2003: 51), citizens unable or unwilling to consume become a problem in terms of profit generation. BIDs constitute new, (sub)local control and regulation modes in inner cities in the form of governance regimes. Such modes, notwithstanding the constant market rhetoric of neoliberalism, are by no means distant from the state, but, as shown for the case of Hamburg, rather are accelerated and subsidized by public authorities and, from the point of view of the urban poor, are an expression of the revanchist local state.

Conclusions

Even though the concept of BIDs dates back to the 1970s, the mushrooming of BIDs only started in the 1990s (Hoyt, 2004). From the 1990s onwards, the concept of BIDs ‘travelled’ from North America across the Atlantic to the UK and by the late 1990s had reached the European continent. It is for this reason that the article has argued for an understanding of BIDs as flowing from the neoliberalization processes that emerged from the 1980s (Harvey, 2005). From the late 1990s onwards, cities became what Brenner and Theodore (2002: 21) called ‘important geographical targets and institutional laboratories’ for a variety of policy experiments to address consequences of neoliberalization such as poverty and inner-city decay, the latter being addressed by BIDs (among other instruments). These policy experiments have taken different forms in different places in ways that, as Jessop (2002b) outlines, include neoliberal, neostatist, neocommunitarian and neocorporatist experiments. In the German context, and in the inner-city BIDs in Hamburg in particular, BIDs should be understood as an expression of an ‘informal constitutional state’ where monied oligarchies organize urban public space in a neocorporatist way.

In the field of security, BIDs facilitate the interplay of public police and rent-a-cops, leading to a particular form of ‘institutionalized lobbyism’ where demands for security and order by the BID community are transformed into cooperation and coordination but also competition between the state police and private security. The most controversial legal issue of the German BID concept remains the constitutionally protected negative freedom of association, which is undermined by the fact that a mere 15 percent of the business community can apply for a BID, and more than 30 percent within a designated BID area need to object against its implementation in order to stop the BID; in other words, 61 percent of a business community can enforce BID membership and its compulsory levies against 29 percent of property owners, as in the Hamburg case. In addition, ‘undesirables’ are coming under additional pressure by the state-supported monied oligarchies aiming at purified space. The neoliberal mobilization of urban space for intensified growth, enhanced competition and higher profits obviously comes with a bundle of threats to transparent, democratic, emancipated and, not least, less exclusive urban societies.

Footnotes

Acknowledgements

I would like to thank Eric Töpfer, Jens Sambale and Nik Theodore for debates in recent years on the topic and beyond. Further, I am thankful to Adrian Smith and the two anonymous reviewers for their helpful and valuable comments. The final responsibility is of course mine alone and the usual disclaimers apply.

Notes

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