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Downtown Express – Though a billing snafu in Chinatown has been resolved, it has reawakened a long-standing debate over the neighborhood’s newly formed Business Improvement District and caused angst among some property owners about being overcharged in the future.

The B.I.D.’s interim board of directors voted in favor of retroactively charging property owners the mandatory payments starting last October, when Mayor Mike Bloomberg signed the B.I.D. into effect. However, a group of property owners contended that the fees should begin once State Comptroller Thomas P. DiNapoli signed off on the entity at the end of January.

The property owners, backed by the Asian American Legal Defense and Education Fund (A.A.L.D.E.F.), claimed the charging of fees prior to February was illegal and threatened to file a law suit against the city to contest the charges.

“As we have noted to the city, the B.I.D. did not exist at that point, and the B.I.D. has not yet contracted with any entity to perform its services,” said Bethany Li, a staff attorney at A.A.L.D.E.F. “We will work with small property and business owners in Chinatown to monitor the B.I.D. to ensure that it does not run afoul of the law again.”

Andrew Schwartz, first deputy commissioner of the Department of Small Business Services (S.B.S.), which oversees the B.I.D. payments, said the start of the assessment fees has varied from B.I.D. to B.I.D. since there isn’t a hard-and-fast policy in the books.

“In light of the confusion, we basically said, ‘Let’s just go with Feb. 1 as the start date,” said Schwartz. “We didn’t want people to think they were going to be penalized or foreclosed, so we reached a quick and reasonable accommodation.”

All Chinatown property owners that had retroactively paid the fees beginning last fall will be credited for four months’ worth of payment up until February and, from now on, billing for future B.I.D.s will begin upon the State Comptroller’s approval, according to the S.B.S.

By July 1, Chinatown property owners will be responsible for paying five months’ worth of Fiscal Year 2012-13 assessment fees, between February and June. Fees for Fiscal Year 2013-14, meanwhile, must be paid in accordance with the property owners’ regular real estate tax bill schedule, which varies among property owners, according to S.B.S. Last week, property owners in the B.I.D.’s catchment area received letters both in English and Chinese explaining the changes.

Wellington Chen, executive director of the Chinatown Partnership Local Development Corporation (C.P.L.D.C.), the B.I.D.’s initiator, said the delay in collecting fees is depriving the town of vital resources. C.P.L.D.C. has wholly financed some $300,000 in cleaning, holiday lighting and other B.I.D.-like services since last July, he said, and the B.I.D.’s interim board of directors has passed a motion requesting that C.P.L.D.C. be reimbursed.

“We’ve been saving every nickel and dime, but that cannot last,” said Chen. “Regardless of when the B.I.D. clock starts, the fact is, services are being rendered.”

David Louie, chairman of the B.I.D.’s interim board, believed the B.I.D. was “morally obligated” to reimburse C.P.L.D.C., particularly since Lower Manhattan Development Corporation funds previously provided to the Partnership have dried up.

“They did all this cleaning without even knowing where this money was going to come from,” said Louie.

Property owners such as Jan Lee, however, deem the charges premature and arbitrary and say they have lost all potential trust in the B.I.D.’s actions moving forward.

Lee and others who were suspicious of the October start date of the assessment fees refused to pay when they received the bill in late February.

“I don’t understand how this could have happened – it’s very disappointing,” said Lee. “The B.I.D. board was advised to say, ‘Someone has put money into cleaning that started last July, and someone should be reimbursed for that. Let’s use tax money guaranteed from the Department of Finance.’ It’s completely contrary to what the B.I.D. law says.”

Dean Fong, who will owe the B.I.D. $800 annually for his two commercial condominium units at 210 Canal St., also found the charges to be unlawful.

“It was very negligent on the part of the B.I.D. board who, we were told by elected officials, would be very careful and have great oversight into making sure that monies assessed to property owners would be proper,” said Fong.

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By Aline Reynolds