Business Improvement Districts: Everything you need to know
The holidays are still a few months off, but when they arrive and you find yourself dazzled by glittering lights strung along the light poles of a bustling commercial strip, there’s a good chance a small organization of business boosters is responsible. That organization is known as a BID.
BIDs, or Business Improvement Districts, are complicated, quasi-governmental organizations that help direct millions in city funding to commercial corridors. But they also fly under the radar for most city dwellers, so here’s a quick guide to understanding what they are, how they’re funded and — if you pine for holiday lights on your own shopping strip — what it takes to get it going (spoiler: it ain’t easy).
What is a BID?
According to the New York City Small Business Services website, a BID is a “geographical area where local stakeholders oversee and fund the maintenance, improvement, and promotion of their commercial district.”
BIDs offer programs that range from marketing support to family events and gatherings. For many BIDs, the most visible undertaking is trash collection, beautification, streetscaping and graffiti removal. BIDs may also invest in decorations like holiday lighting to draw tourists to the neighborhood. Some organize festivals, weekend walks and food tastings.
How are they funded?
There are 76 BIDs serving 96,000 businesses across the five boroughs, with $158.9 million in funding provided by property owners within the BID’s boundaries.
Of the 76 BIDs citywide, 23 are in Brooklyn, with more in the works in Bay Ridge, Boerum Hill and Coney Island.
Each is funded by an assessment billed to property owners. The formula used to determine the bill is decided by the members when the BID is being organized. There are three options usually used: basing the amount on the property’s overall value, or on the linear footage on its frontage, or its square footage.
According to the NYC BID Trends Report for the 2018 Fiscal Year, $14.6 million were invested in Brooklyn BIDs — a distant second to Manhattan’s investments, which received nearly 10 times that amount: $134.2 million.
While this may seem severely disproportionate, the BID values are based on how much community members wish to invest in their BID. Robert Howe, co-chairperson of the Bay Ridge Third Avenue BID Steering Committee, told the Brooklyn Eagle that the $560,000 projected budget for the BID that is being considered for the thoroughfare — with a median contribution of $850 from each property owner — was decided by those in the community.
While most stores in the Third Avenue BID have “a 20-foot storefront,” those that have larger frontage would pay more. And businesses around Times Square, Madison Avenue and Wall Street? Well, they’ve got deeper pockets.
Getting a BID off the ground
For BIDs to be fully formed, it takes a dedicated coalition of local stakeholders who are willing to undertake a long process. There are four main steps to forming a BID:
- Pre-Planning Phase, making sure the BID is the best way to address the needs of the community
- The Planning Phase, working out the key details of the plan
- The Outreach Phase, building community support for the plan
- The Legislative Phase, a series of public hearings, recommendations and votes that ascend from community boards up to the mayor
Diving in a little deeper, it starts with the steering committee, a group of local stakeholders who lead the formation effort. They must identify a clear need for the BID in their community and understand why the BID will best serve the community. According to the NYC Small Business Services website, the steering committee must “ensure the benefits of the BID outweigh the cost of funding it.”
Second, the steering committee must iron out the key details of the plan including the “boundaries, services to be provided, annual budget, and assessment formula,” according to the SBS website.
Third, the steering committee will begin informing their community and hold public meetings. BIDs may send mailings and collect testimonials from tenants and local property owners to have evidence of broad support for the BID.
Last, the BID will seek legislative approval. Much like another exciting bureaucratic gauntlet, the ULURP, this means an application with the City Planning Commission. That kicks off a series of hearings and votes beginning with the local community board, and continuing to the borough president, City Planning Commission and City Council. Finally, the mayor and state comptroller give their seals of approval.
There is a proposed BID for Bay Ridge’s Third Avenue that just entered its outreach phase. The proposed BID will have a $560,000 budget to serve businesses along a 30-block stretch, and its main focus will be on marketing, event managing, streetscaping and sanitation.
Another BID is currently forming in Coney Island. The Alliance for Coney Island, a nonprofit organization spearheading the effort, lists priorities including supplemental sanitation and investments in infrastructure, specifically on repaving streets and sidewalks damaged by Superstorm Study.
There are other BIDs in the works, some many years in development. Court & Smith BID has been in the works since 2014. Currently in its planning phase, supporters are trying to garner community support for its project using an online ballot. It promises to “strengthen critical services and provide an organized voice and advocacy for the local property owners and commercial tenants.”
Not everyone’s a fan
BIDs are criticized as being an extra tax on small businesses and property owners. A website dedicated to stopping the Third Avenue BID from full implementation calls the BID “another tax we cannot afford.”
The website, nobidon3rdave.com, is dedicated to opposing the BID’s formation and frequently cites the “failure” of the Fifth Avenue BID as evidence that the Third Avenue BID is doomed to fail.
There are also concerns BIDs can become controlled by landlords and big businesses with several chains in order to damage and eventually push out the longtime small businesses and property owners.
“When BIDs are lacking community support and buy-in and are run by landlords and not by locals … it can end up hurting the little guy,” said Dr. Molly V. Makris, an assistant professor of Urban Studies at Guttman Community College.
Howe, co-chairman of the steering committee for the proposed Third Avenue BID, remains optimistic that the initiative will improve the community.
“Our message is that it is an investment and will keep you in business,” Howe said. “We want to call our area a Business Investment District: we want to stabilize and improve and offer more services and events than are currently available in a voluntary setting. This is good for everybody.”
Rainier Harris is a freelance writer based in NYC. He has written for the Queens Daily Eagle, Queens County Politics and Bushwick Daily. You can follow his work on Twitter.
Correction (Sept. 13 at 4:50 p.m.): A previous version of this article erroneously stated that the BID funding provided by property owners is matched dollar-for-dollar by the city. The city does not match those funds. This story has been updated, and the Eagle regrets the error.
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