Introduction to Business Improvement Districts

1. Introduction to Business Improvement Districts August 30, 2010

2. History of BIDs • Formed in Toronto in 1969 • Spread Across the US in the 1990s • International by 2000 • South Africa • UK • Other European • Countries • Recent Expansions • El Salvador • Singapore Partnerships. Progress. Prosperity.

3. 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 Partnerships. Progress. Prosperity.

4. 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 Partnerships. Progress. Prosperity.

5. Who benefits from BIDs? • Property Owners • Increased property value • Easier 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 Partnerships. Progress. Prosperity.

6. 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 crime • Cleaner environment • Banks/Lenders • Increase business • More secure loans Partnerships. Progress. Prosperity.

7. Who benefits from BIDs? • Developers • Easier to finance projects • Easier to construct and rent buildings • Construction Companies • Increased opportunities in the district Partnerships. Progress. Prosperity.

8. 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 Partnerships. Progress. Prosperity.

9. Other benefits of BIDs • Increase in property values • Increase in rents • Increase in sales • Increase in hotel occupancy • and rates • Decrease in crime • Increase in tourism • Improvement in public • perceptions Partnerships. Progress. Prosperity.

10. BIDs Have Decreased Crime • Reductions in crime statistics • Increase in safety perceptions • Los Angeles, California • 30 BIDs within the City • Total $22.1 million budget between all BIDs • 6-10% reduction in reported crimes in BIDs • BID security = less property crime • Greater annual reduction in robbery, violent crimes, total crimes than in non-BID areas Partnerships. Progress. Prosperity.

11. 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 Partnerships. Progress. Prosperity.

12. Public-Private Partnership • Public • Need enabling law to authorize • Public process to form • Government can be the catalyst • Funds collected under the authority of the government • Government has • oversight role • to ensure fairness Partnerships. Progress. Prosperity.

13. Public-Private Partnership • Private • Effort led by private owners • Voting / Petition by owners • Private non-profit corporation manages • Corporation not subject to all public rules • Bidding requirements • Public official disclosure requirements • Corporation utilizes private sector efficiencies • Accountable to owners - term Partnerships. Progress. Prosperity.

14. Public Private Partnership • Checks and Balances • Non-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 Partnerships. Progress. Prosperity.

15. Organizational Structure Local Government Owners Association Board of Directors Contract Marketing Committee Maintenance Committee Events Committee Partnerships. Progress. Prosperity.

16. Enabling Statutes • Sets rules for formation and operation • Formation & Renewal Procedures • Owner approval mechanisms • (petition/ballot) • Document requirements • District Plan • Notice / Diagram • Local government • approval process Partnerships. Progress. Prosperity.

17. Enabling Statutes • Operational Guidelines Required in Plan: • Boundaries • Benefit zones / classifications • Governance • Term (5, 10, 15 years) • Reporting • Activities • Budget • Collection procedures Partnerships. Progress. Prosperity.

18. Enabling Statutes • Modification Procedures • Initiation • Owner approval • Government approval • Post Establishment Procedures • Annual reports • Limit on time to protest legality Partnerships. Progress. Prosperity.

19. Enabling Statutes • Renewal Procedures • Can copy formation procedures • Develop district plan • Owner approval process • Government approval process Partnerships. Progress. Prosperity.

20. Assessment • Based on property • Assessed value, property size, building size, building use, street frontage • Exemptions BID Partnerships. Progress. Prosperity.

21. Improvements & Services • Beautification • Landscaping • Clean up services • Security services • Signage improvements • Maintenance • Marketing • Advocacy Partnerships. Progress. Prosperity.

22. Before... And after Partnerships. Progress. Prosperity.

23. Management • Formed by local government • Property owners manage funds • Property owners manage services in accordance with plan • Non-profit corporation controlled by owners Partnerships. Progress. Prosperity.

24. Benchmarking • Establish metrics for measuring success • Metrics linked to objectives • Internal vs. external metrics • Crime statistics • Number of interactions with customers • Pounds of trash removed • Column inches of positive media • Survey attitudes about area Partnerships. Progress. Prosperity.

25. 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 Partnerships. Progress. Prosperity.

26. Steps to Forming a BID Enact legislation Form a steering committee Assemble a database Develop a business plan Owner approval process Government approval process Partnerships. Progress. Prosperity.

27. Disestablishment • Procedure for Initiation by Owners • Limited window • Petition/ballot requirement • Limited district term • Procedure for Disestablishment by Government • Malfeasance • Fraud • Violation of law • Misappropriation of funds Partnerships. Progress. Prosperity.