Business Improvement District

A business improvement district (BID) is a defined area within which businesses are required to pay an additional tax (or levy) in order to fund projects within the district's boundaries. The BID is often funded primarily through the levy but can also draw on other public and private funding streams. BIDs may go by other names, such as business improvement area (BIA), business revitalization zone (BRZ), community improvement district (CID), special services area (SSA), or special improvement district (SID). These districts typically fund services which are perceived by some businesses as being inadequately performed by government with its existing tax revenues, such as cleaning streets, providing security, making capital improvements, construction of pedestrian and streetscape enhancements, and marketing the area. The services provided by BIDs are supplemental to those already provided by the municipality.

The first BID was the Bloor West Village Business Improvement Area, established in Toronto in 1970 as an initiative by local private business. The first BID in the United States was the Downtown Development District in New Orleans, established in 1974. There are now 1,200 across the country. Other countries with BIDs include Australia, New Zealand, South Africa, Jamaica, Serbia, Albania, Germany, Ireland, the Netherlands and the United Kingdom.

The process for creating a BID varies from one jurisdiction to another. In the United States, it generally involves three steps. First, some number of businesses in the area petition the local government to create the BID. Second, the local government determines that a majority of businesses want the BID. Third, the local government enacts legislation creating the BID. Prior to this occurring, state legislatures need to grant local units the authority to create BIDs.

BIDs in England and Wales are funded by a levy on the occupiers rather than the owners of the properties within the area. If voted in by local businesses, the BID levy is an extension to existing non-domestic business-rates. "In the UK, for a BID to go ahead the ballot must be won on two counts: straight majority and majority of rateable value. This ensures that the interests of large and small businesses are protected."

The operating budgets of BIDs range from a few thousand dollars to tens of millions of dollars.

A BID may be operated by a nonprofit organization or by a quasi-governmental entity. The governance of a BID is the responsibility of a board composed of some combination of property owners, businesses, and government officials. The management of a BID is the job of a paid administrator, usually occupying the position of an executive director of a management company.

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