Dan Biederman, co-founder of the Grand Central Partnership and several other business improvement districts (BIDs) throughout the city, was nervous about his lunch date. It was March 2002 and Biederman was to meet Dan Doctoroff, the new deputy mayor for economic development, at the Bryant Park Grill to discuss the future of BIDs in New York.

For the past several years, Biederman had been getting brutalized by the Giuliani administration. The former mayor had soured on BIDs toward the end of his time in office, forcing Biederman to relinquish his leadership positions at two of the three BIDs he had led. Biederman was unsure what to expect from Doctoroff or the new administration. Would Michael Bloomberg also try to undermine the city’s successful BID program?

With one wave of the hand, Doctoroff set Biederman straight.

“That’s all over,” Doctoroff said, according to one person with knowledge of the meeting. “Don’t be second-guessing yourself. Go back to your work.”

So Biederman did. The number of BIDs in the city has exploded in the years since, growing from 44 to 64 in the years of the Bloomberg administration. These days, New York has the most BIDs in the U.S.; Toronto is the only other city in North America with more. And most observers predict that their numbers will continue to grow, with some estimating that the city could have up to 100 BIDs within the next decade.

But concerns persist about the privatization of public space and the outsourcing of city services, like street cleaning and public safety, to private businesses. Some advocates complain that BIDs are examples of municipal governments sloughing off their responsibilities on the private sector, while neighborhood preservationists decry the gentrification that usually accompanies a BID’s arrival.

“In the case of business improvement districts, the public allows private employees of private associations to do the work that police should do,” said Sharon Zukin, author of Naked City: The Death and Life of Authentic Urban Places. “This starts us down a slippery slope.”

Zukin, a professor of sociology at Brooklyn College and the CUNY Graduate Center, said there have been numerous instances of security employees hired by BIDs pushing unsavory types, like homeless people, skateboarders or demonstrators, out of certain neighborhoods, which raises a host of legal and ethical questions about the role of BIDs in relation to city agencies, like the NYPD.

“City streets and parks managed by business improvement district become like privately owned shopping malls, where the BIDs decide who are the legitimate people who can use that public space,” Zukin said.

Others believe the problem with BIDs is much more sinister. Robert Lederman, a street artists and activist, complained that BIDs wield an unprecedented amount of power in the city, operating their own private police forces and courts, advocating for the passage of antivending laws and strong-arming business owners into joining.

“This is public space,” Lederman said. “This is what remains of public’s rights. Where are you going to protest if the sidewalks have all been corporatized?” For the city, BIDs have proven to be an attractive economic development tool, with little strain on precious city resources.

In 2008, the city’s 64 BIDs invested over $100 million in supplemental services, according to data provided by the mayor’s office of Small Business Services. Over 530 sanitation workers and 360 public safety officers were hired by BIDs in that year. BIDs held over 640 events in 2008, from concerts to walking tours, that drew approximately 2.7 million attendees.

“They really put their money where their mouth is,” said Brigit Pinnell, executive director of the Jamaica Center BID in Queens, of the Bloomberg administration. “They’ve been very supportive and very aware of the needs of businesses.”

The administration’s love for BIDs should come as little surprise, considering Robert Walsh, commissioner of Small Business Services, came to the job after leading the Union Square Partnership, one of the city’s oldest and better-funded BIDs.

BID proponents say most critics are won over when they walk through their districts and see the tangible results: cleaner streets, higher property values and more livable public spaces. And at a time when city budgets are tight and the prospect of service cuts and layoffs looms large, BID officials say they provide a safety net for business and property owners concerned about a decline in quality of life.

“There are very specific services that the city provides,” said Jennifer Falk, a former Bloomberg aide who now holds Walsh’s old job as executive director of the Union Square Partnership. “But the BIDs can be a little more nuanced and be more entrepreneurial.”

She added, “Tough times illustrate the importance of these programs.”

Falk’s group, though, has seen its fair share of controversy. The partnership’s efforts to turn the Union Square Pavilion into an upscale restaurant were blasted by critics as an attempt to rob the city of one of its most vibrant public spaces. Lawsuits were filed and a website called “Union Square Partnership Sucks” went up in reaction, but the outcry failed to permanently stop the plan. After five years of protests, the city recently announced it was finally accepting bids for the space.

But opponents remain unbowed and have vowed to file suit against the city's efforts. “Not surprisingly, the Bloomberg administration thinks [BIDs] are the greatest thing since sliced bread,” said Geoffrey Croft, president of the NYC Park Advocates, which opposes the city’s and the BID’s plan for the pavilion. “There’s no accountability. It’s just another layer of government and another layer of tax.”