Business improvement district
A business improvement district (BID) is a defined area within which businesses pay an additional tax (or levy) in order to fund projects within the district's boundaries. The BID is often funded primarily through the levy but can also draw on other public and private funding streams. BIDs may go by other names, such as business improvement area (BIA), business revitalization zone (BRZ), community improvement district (CID), special services area (SSA), or special improvement district (SID). BIDs provide services, such as cleaning streets, providing security, making capital improvements, construction of pedestrian and streetscape enhancements, and marketing the area. The services provided by BIDs are supplemental to those already provided by the municipality.
The first BID was the Bloor West Village Business Improvement Area, which was established in Toronto in 1970 and was an initiative by local private business. The first BID in the United States was the Downtown Development District in New Orleans in 1974, and there are now 1,200 across the country. BIDs have been established around the world, including in New Zealand, South Africa, Jamaica, Serbia, Albania, Germany, Ireland, the Netherlands and the United Kingdom.
Legislation is necessary to permit local governments to create BIDs. The process for creating a BID varies from one jurisdiction to another. In the United States, it generally involves three steps. First, some number of businesses in the area petition the local government to create the BID. Second, the local government determines that a majority of businesses want the BID. Third, the local government enacts legislation creating the BID. Prior to this occurring, state legislatures need to grant local units the authority to create BIDs.
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. "In the UK, for a BID to go ahead the ballot must be won on two counts: straight majority and majority of rateable value. This ensures that the interests of large and small businesses are protected."
The operating budgets of BIDs range from a few thousand dollars to tens of millions of dollars.
A BID may be operated by a nonprofit organization or by a quasi-governmental entity. The governance of a BID is the responsibility of a board composed of some combination of property owners, businesses, and government officials. The management of a BID is the job of a paid administrator, usually occupying the position of an executive director of a management company.
Throughout the world Business Improvement Districts (BIDs) are challenging and re-shaping traditional assumptions of public management—its promises and performance—at the most local of government levels, the neighborhood and town centre. Key to this metamorphosis is the concept and application of public-private partnerships that merge public and private management technologies, public entrepreneurship, and social capital. This merger forges a distinctive form of public management—public-private partnership management—an expertise within public administration—that brings together the knowledge and skills of business, government, planning, and community development in a collaborative manner and achieves a form of citizen-driven governance. When we look world-wide, the BID model is becoming a mainstream policy and management tool for local governments in collaboration with their business districts to apply entrepreneurship, social capital, and the management of a public-private partnership at the heart of community revitalization and development.
There are nearly 1,000 BIDs in the United States. New York City has 67 BIDs, the most of any city. BIDs exist in almost every one of the top 50 largest cities in the United States, including Los Angeles, Chicago, Houston, Philadelphia, Atlanta, San Francisco, Seattle, and Washington, DC. Minneapolis and Boston have been the last of the top 20 largest regions to adopt a business improvement district. The State of Wisconsin has adopted the most for smaller towns, with about 90 in the state, 25 of those being in Milwaukee and the rest throughout the state.
In Canada, Toronto has 73 BIAs within its city limit. Montreal – where BIAs are called Sociétés de Développement Commerciale (SDC) – has 14. The City of Winnipeg has 15 "Business Improvement Zones," the first of which were formed in 1987, with the amendment of The City of Winnipeg Act. In the province of Alberta, they are termed "business revitalization zones". There are nine zones in the city of Calgary and 10 in Edmonton. Regina, Saskatchewan has two Business Improvement Districts: Regina Downtown (BID) and The Warehouse District. Saskatoon, Saskatchewan has 4 Business Improvement Districts: The Broadway BID, The Downtown Partnership, The Sutherland BID and The Riversdale BID. Some work has been made on creating a 5th BID in Saskatoon for the area of 33rd Street. It is estimated that there are over 400 BIDs in Canada but no count has been made. There are 8 business improvement districts in the Halifax Regional Municipality. Halifax Regional Municipality has passed by laws in 2012 regarding the formation and conduct of these BIDs. The 8 BIDS are: Downtown Halifax Business Commission, Downtown Dartmouth Business Commission, Spring Garden Area Business Association, North End Business Association, Quinpool Mainstreetand District Association Ltd. Sackville Business Association, Spryfield Business Association, Main Street Dartmouth Business Association.
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 it is necessary to improve business. 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.
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. As of October 2007 there were 36 proposed or operational BIDs across Greater London. By early 2012, there were over 110 BIDs in operation in the United Kingdom.
The New West End Company is the management and promotional company for Bond Street, Oxford Street and Regent Street. As one of the largest Business Improvement Districts (BID) in Europe, New West End Company brings together the commercial interests of over 600 retailers, property owners and West End businesses working closely with the Mayor of London, Transport for London, Westminster City Council, the Metropolitan Police and local neighbours in a collective vision to drive forward the nations retail heartland.
Better Bankside was the third BID to be established in the UK, the second in London and the first south of the river. It was founded in 2005, and underwent a successful re-ballot in 2010 with 82% of businesses in favour. The Better Bankside BID was set up and is managed by The means, a regeneration consultancy company.
The legislation in Scotland (The Planning etc. (Scotland) Act 2006) is different from the England and Wales legislation in that it allows property owners as well as occupiers to be included in a BID. There are also differences in the timescales, reballot and requirements of the BID Proposer. The intention of the legislation is that BIDs are not restricted to towns and city centres to allow different kinds of BIDs to be developed across the country. The consultation of 2003 proposed that the BIDs model could be used in business parks, tourism and visitor areas, rural areas, agriculture and single business sectors. The legislation, and subsequent regulations were passed by the Scottish Parliament in 2006 and 2007 respectively. In March 2006, the Scottish Government announced funding for six pilot BIDs in Scotland, Bathgate (town centre), Clackmannanshire (business parks), Edinburgh (city centre), Falkirk (town centre), Glasgow (city centre) and Inverness (city centre). There are currently nineteen operational BIDs in Scotland with a further nineteen in development, including two tourism BIDs (TBIDs) with the BIDs model being considered (by whom?) for themed BIDs, such as 'cultural BIDs' and food and drink BIDs. The Scottish Government is currently awarding a grant of up to £20K to local business associations or groups, working in partnership with their local authority to develop and implement a Business Improvement District. Business Improvement Districts Scotland  is the national administrative organisation for BIDs in Scotland set up to implement the Scottish Government's BID programme, providing central support to operational and developing BIDs, whilst also promoting and encouraging the development of BIDs across Scotland.
Six of the sixteen German Bundeslander (Federal States) introduced the requisite legal framework to create BIDs: 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.
Whilst BIDs have been heralded for improving the trading environment, BIDs have also received noteworthy criticism.
BIDs have been accused of being by their very nature undemocratic, and that they concentrate power in a geographic area into the hands of the few. Small businesses who fall below the BID levy threshold, although not liable to pay the BID levy, are often priced out of an area because BIDs tend to increase rental values. Larger businesses are more able to absorb these rent increases, particularly the multiple stores.
BIDs have also been criticized in the past by anti-poverty groups for being too harsh on the homeless and poor who may congregate around businesses. BIDs have also been known to be opposed to street vendors such as hot dog vendors and chip wagons. In London, street traders who sold small items to tourists were barred from Oxford Street in London.
President of Civic Voice, Griff Rhys Jones criticised the creation of a BID in central London neighbourhood saying that is undemocratic: "Neither the people who live there, nor the many intriguing small shops and businesses, have been allowed to vote or have even been consulted.". "I am wary of this initiative because of what may become unintended consequences (or indeed intended consequences) that help one sort of business (the property letting business) but will cause problems to smaller businesses and the large and wholly integrated residential population of the district". He also criticised some of the methods to oppose the BID.
- Southeast Tennessee Development District, Chattanooga, TN. "Green Infrastructure Handbook." January 2011.
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- Ottawa Business Journal http://www.ottawabusinessjournal.com/293685399357911.php
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- BIDS at http://www.bids-scotland.com
- Wayne Batchis, Business Improvement Districts and the Constitution: The Troubling Necessity of Privatized Government for Urban Revitalization, 38 Hastings Const. L.Q. 91 (2010).
- The Retail Sector, Business Improvement Districts and Increasing Rents – Ireland after NAMA
- Lambert, Bruce New York Times, 14 April 1995 "Ex-Outreach Workers Say They Assaulted Homeless"
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- Griff Rhys Jones "Don’t let business in to destroy unique Fitzrovia" London Evening Standard, 21 August 2012
- Griff Rhys Jones "We need to fight this undemocratic attempt to manipulate Fitzrovia into something it is not" Fitzrovia News, 24 July 2012.
- News Reporters "Writer and actor criticises BID proposal and graffiti campaign against it" Fitzrovia News 24 July 2012
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- UKBIDs – The Association of Town Centre Management's BIDs website
- Business Improvement Districts Scotland
- Business Improvement Districts: Imagining Urban Futures – Research on the international circulation of the Business Improvement District model.
- Urban Improvement Districts – Research website on BIDs in Germany
- Why Business Improvement Districts Work – article by Heather Mac Donald of the Manhattan Institute for Policy Research (May 1996)
- Managing the Micropolis: Proposals to Strengthen BID Performance and Accountability – a 1997 report on the lack of accountability in some BIDs and recommendations for reform
- Against Business Improvement Districts – A critical look at business improvement districts (BIDs)