Business Improvement Districts: The Basics

What is a Business Improvement District (BID)?
A BID provides improvements and activities – such as sidewalk cleaning, trash collection, graffiti removal, security, marketing and events – to a commercial district. Its purpose is to supplement, not replace, government services. BIDS are based on a benefit assessment model whereby property owners in a given area agree to assess themselves additional revenues that will be used for services in that area. These revenues are not managed by the city but by property owners themselves.

Are BIDS effective?
BIDS can be extremely effective in revitalizing commercial districts, including increasing property values, visitor numbers and sales. Some of the best-known urban renewal success stories are due in large part to BIDS. For example, BIDS played a major role in making New York City much safer in the 1990s by revitalizing such areas as Times Square, Bryant Park and Wall Street. The

 

International Downtown Association estimates that more than 900 BIDS operate in the United States and Canada and that BIDS in the U.S. raise well over $150 million annually to improve commercial centers.

How is a BID established?
A BID is formed by the private sector, which in most cities must show that a majority of those who will pay the assessment are in support, usually through filing a positive petition with the city council.

Who runs a BID?
The BID board of directors is made up of district property and business owners who set the policies and oversee operations. The board hires professional staff to manage the district on a daily basis.

Some of the advantages of a BID:

  • Brings a wide range of service options, including security, maintenance, marketing, economic development and special events.
  • Designed and created by those who pay the assessment.
  • Established by those who pay through petition support from property owners representing a majority of those who will pay.
  • Governed by those who pay through a property and business owner board that oversees operations and submits an annual budget and implementation plan.
  • Implemented by those who pay through a non-profit, private sector management organization with a dedicated private sector staff.
  • Renewed by those who pay by providing a set term of existence usually three to 10 years, which requires a new petition process to renew the district.