Business improvement district

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A business improvement district (BID) is a public-private partnership in which businesses in a defined area elect to pay an additional tax in order to fund improvements to the district's public realm and trading environment. In some areas, a BID is referred to as a business improvement area (BIA), a business revitalization zone (BRZ), or a community improvement district (CID), A BID is, in some ways, similar to a residential community association, but an appropriate analogy would be that of a suburban shopping mall, from which the idea for BIDs is, itself, modelled. Malls are generally single properties managed by one entity that rents out retail spaces to various tenants. Tenants pay a common maintenance fee to pay for services that enhance the appearance of the mall's common areas and provide cooperative advertising for the mall and its various stores. BIDs operate in much the same way.

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[edit] Bids in brief

BIDs are quasi governmental entities formed of businesses with the authorization of the local government or municipality. BIDs often are operated by not-for-profit partnership organizations, and overseen by a board of directors.

BIDs typically provide services such as street and sidewalk maintenance, public safety officers, park and open space maintenance, marketing, capital improvements, and various development projects. The services provided by BIDs are a supplement to the services already provided by the municipality.

BIDs tend to be geographically defined districts in which commercial property owners vote to impose self-taxes or assessments. BIDs vote to choose the additional services they want to invest in. Once a measure is enacted, all members of the BID, or tennats, are obliged to contribute. Like a property tax, the assessment is levied on the commercial property owners who can, if the property lease allows, pass it on to their tenants. Local authorities may play an important facilitating role and in particular are charged with legal responsibilities, including the provision of the ratings data to calculate the BID levy, the collection and enforcement of the BID levy via a ring-fenced BID Revenue Account that is then passed straight to the BID company, the organisation of the formal BID ballot, and the preparation and commitment to the baseline service agreements.

The operating budgets of BIDs range from "a few thousand dollars to tens of millions of dollars."[1]

[edit] History

BIDs first emerged in Toronto, Ontario, Canada in 1970.[2] Subsequently they have emerged across Canada and the USA and into New Zealand, South Africa, Jamaica, Serbia, Albania, England and Wales, Germany and Ireland with BIDs legislation also being passed in Scotland in April 2007.

[edit] By Location

[edit] North America

There are numerous BID within Los Angeles. The Downtown Center, Historic Core, South Park, Fashion District, Toy District, China Town, Hollywood, and Figueroa Corridor.

There are 64 BIDs within New York City.[3]

In Canada,Toronto has 65 BIAs within its city limit. Montreal has 14. In the province of Alberta, they are termed "business revitalization zones". There are nine zones in the city of Calgary and 10 in Edmonton.

The first special improvement district in New Jersey was formed in Cranford, New Jersey. Several CIDs have been formed in Georgia, all in metro Atlanta. There are also 3 BIDs within the city of Albany, New York.[citation needed] Central BID [1] Downtown BID and the Lark Street BID.

[edit] United Kingdom

[edit] England and Wales

In England and Wales, BIDs were introduced through legislation (the Local Government Act 2003) and subsequent regulations in 2004. The Circle Initiative, a five-year scheme funded by the London Development Agency, set up the first pilot BIDs, five in London, all of which had successful ballots by March 2006. Association of Town Centre Management-coordinated pilot 'talking shops' in 22 locations in England and Wales corresponded with the development of BIDs' regulations.

The first BID to be created under this process was Kingston upon Thames. By November 2007, 57 BIDs had emerged. Of these the Croydon BID, formed in April 2007, became the second largest BID in the UK, representing approximately 580 companies and generating an investment in excess of £5million for the next 5 year term.

Unlike the US, BIDs in England and Wales are funded by a levy on the occupiers rather than the owners of the properties within the area. If voted in by local businesses, the BID levy is an extension to existing non-domestic business-rates.

The Northwest Development Agency supported a pilot programme to develop eight BIDs in the region. Five of these areas succeeded in establishing BIDs (Blackpool Town Centre, Keswick Town Centre, Liverpool City Centre, Oldham Town Centre and Altham Industrial Estate)[4]. Evaluation of the pilot programme has provided evidence of the value for money from public investment in BIDs[5]. The evaluation also led to a toolkit written for business owners and managers who want to understand what BIDs mean for their business[6]

Keswick in the English lake District Cumbria became the first rural business improvement district (BID) in the country, as a result of the ballot of the business community in September 2005.[7]

Private sector business people came forward and a company limited by guarantee was incorporated (April 2006) to deliver the business plan on which the vote was held. Keswick Business Improvement District Limited has been established with a 15 place Board of Directors, which represent a cross section of the business community within the town.

Every business rate payer of £2,900 or more, within the boundary of Keswick are members of the BID and are required by legislation to pay a 1% levy based on their business rateable value. The levy is collected by the local authority as the collection agency on behalf of the BID Company. The BID Company and the Directors are responsible for the effective delivery of the projects within the Keswick BID Business Plan.

As of October 2007 there were 36 proposed or operational BIDs across Greater London. They provide services above and beyond those already supplied by borough councils and business associations. The only BID in Wales operates in Swansea City Centre.[8]

In October 2007, Coventry began operation of the world's first city-wide BID . Voted in by businesses in the city in Feb '07, the BID covers 84 business and retail parks and an estimated 2500 businesses in total. With the levy paid by all suitable companies, a not-for-profit organisation called Coventry Best For Business[9] carries out the ongoing operations of the Coventry BID and will do until the revote in 2012 which could continue or end the CoventryB4B BID.

Since its existence was first publicised, in January 2008, this BID has been contentious.(See Coventry Telegraph article, one of many):[2]. Voted in by only 450 businesses out of 2,500 who should have been entitled to vote. Even that 2,500 are only around one third of the businesses in the BID's geographic area. There is a strong and growing campaign to have the Coventry City Wide BID wound up or at least re-balloted. See Tax Payers Alliance article on demands for a re-ballot: [3]

The Federation of Small Businesses is supporting this campaign, as are all three of Coventry's Members of Parliament. At least two businesses so far have started Court proceedings, for refund of the compulsary levy, on the grounds that the implicit contract with businesses has been broken. By non-delivery of the services claimed to be provided.

Ron Lebar. [4] www.coventrybid.com

[edit] Scotland

In March 2006, the Scottish Executive announced funding for six pilot Business Improvement Districts in Scotland (BIDS) and, between 2006 – 2008, it is providing around £1 million to support the development of pilot BIDS in Scotland.

The pilot BIDS are:

  • Bathgate Town Centre
  • Clackmannanshire Business Parks
  • Edinburgh City Centre
  • Falkirk Town Centre
  • Glasgow City Centre
  • Inverness City Centre

The websites for the pilot BIDS are located on the main website.[5]

The pieces of legislation which implement BIDs in Scotland are:

  • The Planning etc. (Scotland) Act 2006 (Part 9);
  • The Business Improvement Districts (Scotland) Regulations 2007;
  • The Business Improvement Districts (Ballot Arrangements) (Scotland) Regulations - 2007, and
  • The Planning etc. (Scotland) Act 2006 (Business Improvement Districts Levy) Order 2007.

BIDs legislation came into force in Scotland in April 2007. The BIDS Scotland website holds these pieces of legislation.[6]

Beyond the actual provision of the legislation, the Explanatory Notes in the 2006 Act (Part 9) and those attached to the Regulations and Order, are useful in explaining the legislation further.

[edit] Germany

Six of the sixteen German Bundeslander (Federal States) introduced the requisite legal framework to create BIDs over the last copuple of years: Hamburg, Bremen, Hessen, North Rhine-Westphalia, Saarland and Schleswig-Holstein. BID projects in implementation exist only in a few German cities, yet - e.g. in Flensburg, Hamburg and Giessen.

The Free and Hanseatic City of Hamburg was first to transfer the BID-idea and the specific elements of this model to residential areas. This new instrument is called "Housing or Neighbourhood Improvement Districts" (HID/NID). The law is applicable since December 2007. Detailed information regarding the situation in Germany (legislation, projects and discussion) can be found on the scientific website.www.urban-improvement-districts.de A research paper in English on the experiences with BID in Hamburg and the new model of Neighbourhood Improvement Districts is available here The Model of Neighbourhood Improvement Districts in Hamburg.

[edit] Criticism

BIDs have received noteworthy criticism. For example, in Plymouth it has been claimed that vast amounts of taxpayers' money has been channelled into the promotion of the BID companies' directors business interests whilst their competitors has been left unsupported. Moreover, despite being forced to pay a BID levy, membership to the Plymouth City Centre Company requires the approval of its directors, who have been known to refuse membership due to an applicant having a business that might compete with their own. Critics argue that the BIDs provide services which should be provided by the government such as policing services. Critics also argue that there are services which should be paid for by the individual business owner such as sweeping/cleaning.[10] Other critics believe that BIDs are too large and wield too much power and are taking away power from neighbourhood community organizations. In some neighbourhoods there are now umbrella groups made up of commercial landowners, property management firms, and condominium dwellers which aim to stop the BIDs.

BIDs have also become a powerful lobby group, lobbying government for improvements such as new sidewalks, trees, park benches and other restorations. BIDs can also lobby different levels of government for a complete facelift on their area if they feel its necessary to improve business.[11] The Rideau Street BIA in Ottawa has lobbied the city for years to give the entire street a face-lift because of its "run down" look.

There is also very little public access to the accounts of the BID companies in the UK despite the fact that the vast majority of their income is derived from public taxes. In Plymouth, England, for example, the bid company known as the Plymouth City Centre Company does not publish its full accounts and questions are now being asked as to where and how millions of BID funds have been spent.[citation needed]

In addition, there has been some recent concern in social science literatures that critique aspects of the BID model.[12] It is argued that the devolution of limited political authority to the private boards of these districts effectively privatizes the public spaces of the city. This privatization is potentially problematic given the important role that is played by public space in a democracy as a site of free speech, association and protest. There is concern that overt control of BIDs by business and property owners results in the privileging of the interests of those people over the democratic interests of society at large. There has also been substantial attention to the manner in which BIDs have often attempted to rid the spaces they control of the homeless, ethnic minorities, and political activists who might frighten off potential shoppers.

[edit] References

  1. ^ Justice, Jonatahn B. (May-June 2009). "Public Places and Quasi-Private Administration". Public Administration Review (Wiley-Blackwell) 69 (3): 553. doi:10.1111/j.1540-6210.2009.02004.x. http://www3.interscience.wiley.com/cgi-bin/fulltext/122325153/PDFSTART. Retrieved on 2009-05-27. 
  2. ^ Justice, Jonatahn B. (May-June 2009). "Public Places and Quasi-Private Administration". Public Administration Review (Wiley-Blackwell) 69 (3): 553. doi:10.1111/j.1540-6210.2009.02004.x. http://www3.interscience.wiley.com/cgi-bin/fulltext/122325153/PDFSTART. Retrieved on 2009-05-27. 
  3. ^ NYC BIDS http://www.nyc.gov/html/sbs/html/neighborhood/bid.shtml
  4. ^ Northwest Development Agency BIDs Pilot
  5. ^ NWDA BIDs Pilot Evaluation Report.
  6. ^ BIDs Toolkit for Business Managers.
  7. ^ Keswick Business Improvement District - Keswick, the Lake District
  8. ^ Swansea Business improvement district
  9. ^ Coventry Best For Business
  10. ^ Seattle Weekly http://www.seattleweekly.com/news/9919/features-bush.php
  11. ^ Ottawa Business Journal http://www.ottawabusinessjournal.com/293685399357911.php
  12. ^ Mitchell, Business Improvement Districts.

Blackwell M. 2005. A critical appraisal of the UK Government's proposals for Business Improvement Districts in England. Journal of Property Management, 23 (3).

Clough, N. and R. Vanderbeck. 2006. Managing Politics and Consumption in Business Improvement Districts: The Geographies of Political Activism on Burlington, Vermont's Church Street Marketplace. Urban Studies, 43 (12), 2261-2284.

Cook, I. R. 2008. Mobilising Urban Policies: The Policy Transfer of US Business Improvement Districts to England and Wales. Urban Studies, 45 (4), 773-795

Hoyt, L. and G. Devika. 2007. The Business Improvement District Model: A Balanced Review of Contemporary Debates, Geography Compass, 1 (4).

Kreutz, S. 2009. Urban Improvement Districts in Germany: New legal instruments for joint proprietor activities in area development. Journal of Urban Regeneration and Renewal, Vol.2,4, 304-317

Mitchell, J. 2008. Business Improvement Districts and the Shape of American Cities. Albany: SUNY Press.

Schaller, S. and G. Modan. 2005. Contesting Public Space and Citizenship: Implications for Neighborhood Business Improvement Districts. Journal of Planning Education and Research, 24 (4), 394-407.

Stokes, R. 2006. Business Improvement Districts and Inner City Revitalization: The Case of Philadelphia's Frankford Special Services District. International Journal of Public Administration, 29 (1 - 3), 173 - 186.

Ward, K. 2007. Business Improvement Districts: Policy Origins, Mobile Policies and Urban Liveability. Geography Compass, 1 (3).

[edit] External links

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