Introduction to Business Improvement Districts

Introduction to Business Improvement Districts

August 30, 2010

Partnerships. Progress. Prosperity.

History of BIDs

Formed in Toronto in 1969Spread Across the US in the 1990sInternational by 2000

South AfricaUKOther European

CountriesRecent Expansions

El SalvadorSingapore


What is a BID?

A special business district established at the request of property owners by local government A way of providing increased services and centralized management to the business district

A proven method of increasing value and investment


How does a BID work?

Property owners create a corporation and request the local government create a BID

Local government forms the BID, collects revenues, and returns them to the corporation

Property owners on the corporation’s board determine how funds are spent


Who benefits from BIDs?Property Owners

Increased property valueEasier to attract investors Space easier to rent Lenders more likely to finance Gives owners a unified voice

Retail Businesses & Restaurants Sales increase

Office Tenants Easier to attract and keep employees

Customers Clean, safe, attractive and friendly

environment


Who benefits from BIDs?

Government and Elected Officials Increased jobs for constituents Increased tax revenues City departments, as BIDs help maintain

and improve public spaces Residents

Decrease in crimeCleaner environment

Banks/Lenders Increase businessMore secure loans


Who benefits from BIDs?

Developers Easier to finance projectsEasier to construct and rent buildings

Construction Companies Increased opportunities in the district


How do we know BIDs work?

More than 1,500 BIDs in the United States and 500 in Canada

Other countries in Europe and Africa, plus Australia and New Zealand are forming BIDs

Only a few have ever been discontinued

Extensive data shows strong evidence of success


Other benefits of BIDs

Increase in property values Increase in rents Increase in sales Increase in hotel occupancy and rates Decrease in crimeIncrease in tourism Improvement in public perceptions


BIDs Have Decreased Crime

Reductions in crime statisticsIncrease in safety perceptionsLos Angeles, California

30 BIDs within the CityTotal $22.1 million budget between all

BIDs 6-10% reduction in reported crimes in

BIDsBID security = less property crimeGreater annual reduction in robbery,

violent crimes, total crimes than in non-BID areas


Forming a BID - Overview

Public-private partnership

Requires enabling statutes

Assessment on property

Pays for additional improvements and services

Managed by owners paying assessment

Establishes benchmarks to measure outcomes


Public-Private Partnership

Public Need enabling law to authorizePublic process to formGovernment can be the catalystFunds collected under the authority of

the governmentGovernment has

oversight role to ensure fairness


Public-Private Partnership

PrivateEffort led by private ownersVoting / Petition by ownersPrivate non-profit corporation managesCorporation not subject to all public rules

Bidding requirementsPublic official disclosure requirements

Corporation utilizes private sector efficiencies

Accountable to owners - term


Public Private Partnership

Checks and BalancesNon-profit subject to accountability and

oversight rules Non-profit is not a public entity for any

other purposes Non-profit required to report on spending Government can disestablish district if

illegal activity occurs


Organizational Structure

Owners AssociationBoard of Directors

Local Government

Contract

Marketing Committee

MaintenanceCommittee

EventsCommittee


Enabling Statutes

Sets rules for formation and operation

Formation & Renewal Procedures Owner approval mechanisms

(petition/ballot)Document requirements

District PlanNotice / Diagram

Local government approval process


Enabling Statutes

Operational Guidelines Required in Plan:

Boundaries Benefit zones / classificationsGovernance Term (5, 10, 15 years)Reporting Activities BudgetCollection procedures


Enabling Statutes

Modification Procedures Initiation Owner approval Government approval

Post Establishment Procedures

Annual reports Limit on time to protest

legality


Enabling Statutes

Renewal Procedures Can copy formation procedures Develop district plan Owner approval process Government approval process


Assessment

Based on property

Assessed value, property size, building size, building use, street frontage

Exemptions

BID


Improvements & Services

Beautification Landscaping Clean up services Security services Signage improvements Maintenance MarketingAdvocacy


Before... And after


Management

Formed by local government Property owners manage funds Property owners manage services in

accordance with plan Non-profit corporation controlled by

owners


Benchmarking

Establish metrics for measuring successMetrics linked to objectivesInternal vs. external metrics

Crime statisticsNumber of interactions with customersPounds of trash removedColumn inches of positive mediaSurvey attitudes about area


Baseline Services

Baseline = city services prior to BID formation

City cannot decrease services because of BID

City contract with non-profit to define baseline

District services are a supplement to City services


Steps to Forming a BID

1. Enact legislation

2. Form a steering committee

3. Assemble a database

4. Develop a business plan

5. Owner approval process

6. Government approval process


Disestablishment

Procedure for Initiation by Owners Limited windowPetition/ballot requirement

Limited district term

Procedure for Disestablishment by Government

Malfeasance Fraud Violation of law Misappropriation of funds

Introduction to Business Improvement Districts

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