Business Improvement Districts

Dr. Carol Becker

A Definition of BIDs

A public special taxing district that all businesses fund

A private non-profit implements or oversees the implementation of work plan (i.e. public-private partnership)

Typically does cleaning, marketing, security and other activities for a business area

Excludes:

Purely public organizations Purely private organizations Neighborhood Improvement Districts Organizations funded primarily by TIF Chambers of Commerce Districts that only provide capital/debt service Special districts that provide other services like

water, sewer, fire, mailboxes California Tourism Business Improvement District

Names for BIDs

Municipal Improvement District (MID)Local Improvement DistrictEconomic Improvement DistrictsCommunity Improvement Districts

(CID) Special service Taxing District Special improvement district (SID) Local Improvement Taxing District Municipal Service Districts Special benefit assessment district Downtown Improvement District Special Business District Public Improvement District (PID) Economic Improvement Districts (EID) Property-based business improvement

district (PBID) General Improvement District

Enhanced municipal service districts Municipal Special Service Districts Municipal management district Community Improvement District

(CID) Self-Supported Municipal

Improvement District (SSMID) Principal Shopping District (PSD) Business Improvement Zone (BIZ)Special Service Area Maintenance Assessment DistrictCommunity Benefit District (CBD)Special Assessment Districts (SAD) Special Community Benefit District Residential Improvement District

(RID)Business Improvement Area (BIA)

How many BIDs are there?

Answer: 1,001

Business Improvement Districts in the United States

Terminated or Dormant BIDs

Although it was not a primary focus of this study, BIDs that were terminated or have gone dormant were noted.

50 located so far Some terminate and later are restarted From this very initial work, it appears that

there is a less than 5% failure rate in BIDs

Size of City

Population of city Number of BIDs0 - 25,000 20725,000 - 50,000 15050,000 - 75,000 8775,000 - 100,000 48100,000 - 500,000 217500,000 - 1,000,000 951 - 2,000,000 442 - 3,000,000 573,000,000 + 97Total 1002

Creation accelerating

BIDs by Year of Creation

0

10

20

30

40

50

60

1975- 1979 1980 - 1984 1985 - 1989 1990 - 1994 1995 - 1999 2000 - 2004 2005 - 2010

Created in response to economic stress

Year BID Created

0

5

10

15

20

1975 1980 1985 1990 1995 2000 2005 2010

Budgets

Budget Size

Smallest: $2,500

Largest: $18,000,000

Median: $355,000

Largest Revenue Sources

What is the source of your current organizational budget revenues Assessments: 95.9%Member dues: 36.1%Contracts: 41.2%Sponsorships: 48.5%Development fees: 21.6%City General Revenues: 38.1%Other: 56.2%

Other revenue sourcesEvents (most mentioned)

Voluntary Donations

TFCA and Lifeline Grants

Rental income & TIF funding

Revenue from operation of transportation system.

Clean Communities Grant & Recycling Trust Funds

Other levels of government and project partnerships

Farmers' Market Management

Fundraising events, promotions, misc

Contracted services

University partner

Basis for Assessment

What is the basis you calculate your BID assessments on in this district?Based on assessed value for real estate taxes

55.9%

Based on sales tax 1.8%On a square foot basis 12.2%On a linear front footage basis 4.5%Other (please specify) 25.7%

Other ways of Assessing Combination of linear footage, building square footage, lot area,

use, location Gross receipts Rate per $100 total assessed value plus rate per SF parcel Business License Fees Square foot, linear front footage and lot size Flat fee - depends on type of business and location Base fee plus tax per employee Square footage plus the taxable rate and an additional flat rate is

added to each parcel. Combination of front footage and assessed value Commercial rate on property is basis for calculation of "business

levy" per $100.00 worth of assessment. Annual Business license Based on a combination of assessed value and linear front footage Combination of linear frontage which accounts for 65% of the

budget and 35% based on square footage Formula based on lot square footage and linear front footage

Other ways of Assessing (con’t)

SF of building, SF of land, and assessed value of building Square footage of "visitable" retail space with a set maximum. Based on percentage of business tax assessment receipts Combination of various property related characteristics including

parcel size, building size, amount of adjacent street frontage and a flat fee per parcel.

Based on business license fees. Generally 150% of license fee, with some flat rates, and a cap at $750

Sales tax and property tax Both AV & linear front footage Assessed value and square footage Front footage, assessed land and building values. Combination of assessed value, sq.ft., type of use, # stories, type

and number of parking spaces, Square footage of lot, taxable market value, square footage

above first floor City business tax

What do BIDs do?

MaintenanceProvide with our

staff

Provide through contract

Do not provid

eRubbish collection 38 69 95Litter and graffiti removal 61 90 52Sidewalk washing 38 75 87Snow shoveling 16 41 134Grass and tree cutting, flower

42 94 70

Streetscapes/lighting/street furniture installation

36 96 78

Directional signage 18 69 114

With our staff

Through contracts

Do not provid

eNon-uniformed ambassador 9 4 176Uniformed, unarmed ambassador 27 27 141Uniformed, armed ambassadors/security personnel

1 4 181

Uniformed/unarmed private security personnel

7 19 162

Uniformed/armed private security personnel

0 10 177

Sworn police officers 2 33 158Electronic security/ security cameras

11 18 160

Community policing program 23 17 153Program to share crime information

63 11 120

Community court 2 3 182Supervision of persons serving a sentence from community court

18 6 165

Security

Marketing/Hospitality

With our staff

Through contract

s

Do not provid

eStreet guides or ambassadors

53 28 117

Tourism kiosks 37 13 141Maps and area information 132 27 37Marketing/advertising campaigns

142 31 28

Festivals 121 20 58Farmer's markets 62 19 108Arts events 95 20 80Historic tours 49 8 132Holiday decorations 89 59 48

Business RecruitmentWhich of these Business Recruitment and Retention activities do you provide with funding from the BID:

With our staff

Through

contracts

Do not provid

e

Market research 79 44 75Performance reporting 82 15 98Financial incentives for new/expanding businesses

46 13 135

Business recruiting 113 11 76Marketing 137 28 37

Public Space ManagementWhich of these Public Space services do you provide with funding from the BID:

With our staff

Through contract

s

Do not provide

Sidewalk vending management

21 7 171

Management of street performances and artists

52 16 133

Code compliance 47 14 137Management of loitering 40 28 134Development of urban design/facade guidelines

66 24 109

Enforcement of facade or design requirements

46 15 136

Accountability

Accountability and Freedom

Does your Governing Board have the right to: Yes No

We recommend, government

decidesSet its own level of assessment revenues?

109 28 80

Set its own budget? 167 10 42Make personnel/hiring decisions?

195 7 12

Make choices about the bundle of services?

192 5 19

Make choices over the level of services provided?

192 3 21

Accountability and Freedom

Has government ever set a different level of funding than the one you originally requested?

ResponseGovernment doesn't levy funding for us

14.7%

Yes 12.8%No 72.5%

Answer: Reauthorization

Does the contract that government has with the BID organization extend indefinitely or does it require periodic renewals?Indefinitely 31.7%Periodic renewal by government 68.3%

Does your organization's fee or assessment exist for a limited time, at which point government has to renew approval? Expires 64.1%Exists indefinitely 35.9%

Answer: Wide Accountability of board members

How are the members of your board elected or appointed? Appointed by city mayor 23.0%Appointed by city council 22.1%Appointed by another level of government 8.9%Selected by organization's existing governing board

37.6%

Members are elected officials from city, state or other government

8.0%

Elections held within the service district 40.4%Recommended by BID but approved by local government

13.1%

Other (please specify) 16.9%

Answer: Special interest groups represented on governing boards

Are you required to have certain members of your board represent specific interests? (you must have one board member who is a renter or two board members who are business owners, etc.)Yes 65.1%No 34.9%

 

Special Interest Groups on Governing Boards

Some examples: individuals who pay at different levels of taxation; individuals who represent different sectors, including retail, commercial, small businesses, renters, tenants; individuals from different geographic areas; individuals by sectors, including non-profit, for-profit and government sectors; and a wide range of other alternatives.

Answer: BID Scale

Most BIDs are sub-municipal organizations, providing direct service to a relatively small group. Because of their size, there is little to go wrong, little incentive for shenanigans and many eyes watching.

Answer (sort of): Performance reporting

Does your organization: Yes NoReport performance information to a governmental organization

177 32

Publish an annual budget 186 22Publish an annual financial report 168 38Conduct an annual independent financial audit

169 39

Publish annual performance information

154 51

Report budget or other financial information to a governmental organization

183 25

Publish or make publicly available the pay levels of employees

95 109

Answer: Performance Reporting

How does your organization measure its performance?Business Surveys 64.8%Visitor Surveys 25.5%Balanced Score Cards 6.1%Focus Groups 20.9%Data from the local government 38.3%Data from the state government 7.1%Data from the federal government 4.6%Data from private organizations 23.5%Other (please specify) 39.3%

Answer: Performance ReportingWhat information do you present in your performance reporting?Square feet leased or vacancy 38.7%New construction 38.1%Retail Sales 20.1%Number of visitors 23.7%Change in employment 16.0%Population 23.2%Number of businesses 61.9%Crime statistics 36.6%Number of pedestrians 15.5%Business perceptions 55.2%Visitor perceptions 39.7%Number of businesses 53.6%

Article coming out this summer

Public Performance & Management Review (PPMR): Special edition on Public-Private Partnerships: “Democratic Accountability and Business Improvement Districts”

Contact

Carol Becker 612-275-4437 CarolJeanBecker@gmail.com