Three Reasons to Consider Business Improvement Districts

There is genuine irony surrounding business improvement districts (“BIDs”) today. On one hand, many leaders of municipalities and chambers of commerce are unaware of how they could be used, or assume BIDs are suited primarily to huge urban centers. On the other hand, the BID (or in Canada, BIA – business improvement area) is an elemental way of pooling revenue together for collective purposes, and a tool with great potential for communities small and large.

There are over 400 BIDs operating in the United States alone, and many more in Canada and Europe. Organized as a public-private partnership among owners of commercial property, the impetus for forming a BID is ordinarily the importance of promoting a community’s downtown. They are formed locally, requiring majority approval from business owners and legal authority on the state or provincial level.

Here are three reasons to love business improvement districts as an economic development tool:

1. Custom built. The boundaries, the basis for assessing the charges from participants, and how the district chooses to brand its downtown can be tailored to what face the civic and business leadership most wants to show the world.

2. Local priorities drive. Communities have used BIDs for a broad range of applications. New York City’s fifty-five BIDs have over twenty years channeled $830 million into capital improvements, sanitation, beautification, public safety and tourist programs. In Los Angeles, the Downtown Center Business Improvement District has focused on business recruitment and retention, as well as serving as a housing information clearinghouse for prospective residents and developers alike. In Duluth, Minnesota, BID resources have been targeted to branding Duluth as a waterfront destination.

3. Suited to communities large and small. In addition to the metropolitan cases noted above, BIDs have been used to great effect by smaller towns, as well. Take the City of Salmon Arm, British  Columbia, a town of roughly 16,000 residents. The Salmon Arm Downtown Improvement Association was the first district in the province; its existence dates to 1974, before authorizing legislation was approved. Over the last thirty-three years, the district has focused on revitalization efforts and sponsorship of special events downtown.

Communities, planners and business leaders interested in exploring the benefits of a business improvement district can contact Jon Commers, principal at Donjek. We can assist in thinking through the process, running preliminary scenarios, and evaluating the use of BIDs to meet you goals.

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