Business improvement district
A business improvement district (BID) is a defined area within which businesses are required to 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). These districts typically fund services which are perceived by some businesses as being inadequately performed by government with its existing tax revenues, 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 revenue derives from a tax assessment on commercial property owners, and in some cases, residential property owners.
The first BID was the Bloor West Village Business Improvement Area, established in Toronto in 1970 as an initiative by local private business. The first BID in the United States was the Downtown Development District in New Orleans, established in 1974. There are now 1,200 across the country. Other countries with BIDs include Australia, New Zealand, South Africa, Jamaica, Serbia, Albania, Germany, Ireland, the Netherlands and the United Kingdom.
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 England and Wales, for a BID to go ahead the ballot must be won on two counts: straight majority and majority of rateable value. In Scotland for a ballot to be successful it must meet four criteria, a minimum turnout of 25% by the number of eligible persons (the headcount) and by rateable value and a majority of those that vote by number of ballots and by rateable value must vote in favour. 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.
There are nearly 1,000 BIDs in the United States. New York City has 74 BIDs, the most of any city; in NYC, BIDs invest $134 million annually in neighborhoods throughout the five boroughs . 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 78 BIAs within its city limit. Montreal – where BIAs are called Sociétés de Développement Commerciale (SDC) – has 17. 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 Mainstreet and 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.
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. As of October 2007 there were 36 proposed or operational BIDs across Greater London. By late 2014, there were over 180 BIDs in operation in the United Kingdom. By February 2017, there were 270 BIDs 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.
In July 2015, the Nottingham BID was successfully renewed by Central Management Solutions, a specialist management company for urban centres. This was particularly notable due to the fact that the BID merged the former leisure BID with the larger but, nonetheless, younger retail BID. The merger has led to combined services and aligned city promotions to consumers.
In July 2015 the South Birmingham 'Lifford Bid' (Kings Norton, Cotteridge, Stirchley and Bournville) was rejected, with the Yes vote falling short with 45% of the vote.
Business Improvement Districts Scotland (http://www.bids-scotland.com/) is the national organisation and voice for BIDs in Scotland. BIDS is responsible for delivering the Scottish Governments BIDs programme across Scotland, providing central support to developing BIDs, promoting and encouraging the development of BIDs across the country, whilst also working with operational BIDs to assist them in delivering for their local communities and contributing to sustainable inclusive economic growth. The Scottish Government provides a grant to local groups of up to £20,000 to help with the development of the BID. 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, ballot criteria (in Scotland for a ballot to be successful it must meet four criteria, a minimum turnout of 25% by the number of eligible persons (the headcount) and by rateable value and a majority of those that vote by number of ballots and by rateable value must vote in favour), reballot and the legisaltive requirements of the BID Proposer. The intention of the Scottish legislation is that BIDs are not restricted to towns and city centres to allow different and innovative 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 thirty seven operational BIDs in Scotland with a further twenty four in development. The thirty seven operational BIDs include thirty one town and city centre BIDs and three business park BIDs. In March 2014 the first tourism BID (TBID) was delivered in Loch Ness and Inverness (http://www.uniqueness.co.uk/)with others under discussion. The first themed BID in Scotland was delivered in December 2013, the Sauchiehall Street Evening Economy BID. In 2016 the worlds first Food and Drink BID was delivered in East Lothian (https://www.scotlandsfooddrinkcounty.com/) with the levy based on the number of full time employess, also a first. The development and interest in the BIDs model in Scotland continues to grow and the flexibility of the legislation and the model is now being recognised with the development of the Borders Railway BIDs Corridor and four Canal BIDs led by Scottish Waterways Trust. IN 2017 BIDs Scotland published The National Report on BIDs in Scotland (https://www.bids-scotland.com/about-us/the-national-report-on-bids-in-scotland-2017) which covers the types of BIDs, number of businesses, levels of employment in BIDs in Scotland and the contribution they make to sustainable and inclusive economic growth. The opportunity for more innovative BIDs is under discussion.
www.britishbids.info is the industry body focused entirely on Business Improvement Districts. The organisation offers advice and services on BID development, management and renewal along with a range of training services and the Certificate in BID Management.
British BIDs conducts an annual Nationwide BID Survey. 2016 saw the publication of the 10th of these. The survey covers the fundamentals of a BID – number of businesses, types of businesses, levy rate and so on. It also asks questions about project delivery – what various BID's are delivering and how it works with other key strategic partners amongst other things. The survey provides the industry a real insight to the position at present.
British BIDs also produces the Industry Criteria and Guidance for developing and renewing BIDs alongside supporting organisations the ATCM, Revo, ACS, BRC, intu and BPF.
British BIDs also administers the DCLG BID Loan Fund which supports developing BIDs.
In February 2017, Professor Chris Turner was appointed Chief Executive of British BIDs.
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.
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- (http://www.britishbids.info/) - The British BIDs website
- 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)