A Business Improvement District (BID) is a geographical area where local stakeholders oversee and fund the maintenance, improvement and promotion of their commercial district. For more than 40 years, BIDs have been valuable and proven partners in ongoing initiatives of neighborhood revitalization and economic development across the five boroughs, making NYC neighborhoods cleaner, safer and more vibrant.
BIDs create vibrant, clean, and safe districts. They deliver services and improvements above and beyond those provided by the City, increasing commercial business and solidifying the overall strength of their district. Working with the City and community, BIDs are a powerful voice for their districts. BID services do not replace those provided by the City. By law, City services cannot be reduced because of the existence of a BID. BIDs services can include:
BID programs and services are funded by a special assessment billed to property owners within a district. Assessments are unique to each BID. In total, the BID assessments plus any additional revenue raised through grants and sponsorships equal the yearly BID budget, which is used to fund the program of BID services and improvements. The City of New York assists with the collection of the special assessment, which in turn, is distributed directly to the BID. The BID receives 100% of the money collected, which must be reinvested in the local community within the BID boundaries.
The process of forming a Business Improvement District (BID) is designed and overseen by the NYC Department of Small Business Services (SBS), and requires very specific milestones and touchpoints. The BID formation process is quite extensive – it can take anywhere from 3 to 6 years (or more!). There are 4 key phases of BID formation, as identified by SBS:
Planning: During the planning phase, a Steering Committee is formed to guide the development of a BID proposal. A BID formation Steering Committee is composed mainly of property owners and business operators within the proposed BID geography. It can also include district residents and community based organizations. Steering Committee members are expected to attend regular meetings, be publicly supportive of the BID formation and continuously share information and updates with stakeholders throughout the process.
After forming a Steering Committee, the first step in the planning phase of BID formation is to circulate a District Needs Assessment. The Needs Assessment is meant to gather feedback and information from the community about what challenges the district faces, and is used to help determine potential solutions to those challenges.
Once SBS determines that an adequate number of responses to the Needs Assessment have been collected, the Steering Committee then uses these responses to identify key components of the proposed BID, including the geographic area, organization mission, services provided, maximum assessment that will be billed to properties within the BID geography, and assessment formula (the formula by which the maximum assessment gets divided amongst properties within the BID’s boundaries). Before moving forward to the outreach phase, the BID formation Steering Committee must finalize four key decisions:
It is in the best interest of the effort for the Steering Committee to put together a BID plan that responds to the needs of the local community.
Outreach: Once these key decisions have been made, the BID proposal is summarized on the official support ballot, which is circulated to all property owners, business owners, and residents within the proposed BID geography. During the outreach phase, the Steering Committee is tasked with collecting support ballots in favor of the BID proposal. The Committee must mail the support ballot to every property owner, commercial tenant, and resident within the prospective BID’s boundaries, hold public meetings, and collect letters of support from elected officials. The duration of this phase can vary greatly, and many groups find this stage the most challenging and time consuming. The ultimate goal is to demonstrate broad-based support for the proposed BID from local stakeholders.
Legislative: During the legislative phase, the new proposed BID formation goes through the approval process to become local law. Similar to the Uniform Land Use Review Procedure (ULURP), this stage typically takes 9-12 months. SBS will only introduce proposed BIDs into the legislative process if it believes the Steering Committee has followed the planning process correctly, solicited community input, and demonstrated broad-based support across all stakeholder groups (property owners as well as commercial & residential tenants).
Startup: Once a new BID has been signed into law, the Steering Committee will need to get the district management association (DMA) set up. The organization must be incorporated and registered, and systems must be set up to receive the BID assessment funding and begin providing services to the corridor. SBS will continue to provide support and guide the interim board of directors in their first major decisions and activities as a BID.
YOU will — with the assistance of a paid professional. Each BID is run by a non-for-profit organization with a local Board of Directors, who are elected by members of the district. All decision making related to the BID is made by this Board. The Board decides how the BIDs budget is spent and who is hired to execute BID initiatives. Grand Avenue stakeholders are encouraged to participate and decide on money spent and services delivered to the Avenue, as well as who gets hired for staff positions. This will be a “you” organization, not a “those guys” organization — it is run by the Grand Avenue community.
A note about board composition:
In the BID model, a board of directors is elected by members of the BID. Property owners must comprise the majority of the board. A BID board has a minimum of 13 members, and therefore a minimum of 7 property owners. Other board members must include at least one commercial tenant, one residential tenant, and four representatives from New York City - NYC Department of Small Business services represents the Mayor, plus a representative of the NYC Comptroller, the Borough President, and the City Council member for that district.
Only stakeholders within the district get to vote. "Stakeholders" are those that own or rent a mixed use, parking, commercial or residential space on Grand Avenue (and some side street buildings)- see map on ballot for tax lots in the geography.
At starting billing (2-3 years from now), the median BID assessment is $1140/ year, which is $95/ month, or ~ $3/ day. At maximum billing (6 to 10 years from now), the median BID assessment is $1850/ year, which is ~$5/ day. To find out exactly what your property will pay, you can calculate using the rates listed on the ballot and your property’s frontage and assessed value.
The BID provides supplemental services, which are higher level, more targeted to local conditions, and go above and beyond the services that the City provides. BIDs do not replace City mandated services. In fact, BID advocacy often leads to increased and more responsive City services. By law, City services cannot be reduced because of the presence of a BID.
A tax comes out of your pocket and goes to the government, who gets to decide how your money gets spent. The property taxes that you pay could end up supporting a program in a totally different neighborhood. With an assessment, the money you pay comes directly back to the community, where it gets invested in the collective good of the commercial corridor. The ability to control funds at the hyper-local level means more flexibility in resource allocation from the exact people who know local conditions and can respond more quickly to issues and concerns. YOU have the opportunity to be an active participant in the BID, and control how the money is spent!
For 75+ years, the Maspeth Chamber of Commerce has rallied volunteers to help out with everything from running events to collecting dues to marketing and social media. While there remains a dedicated group of volunteers to perform these duties, these volunteers are aging out, and no new volunteers are stepping in to take their place. Additionally, all activities of the Chamber are contingent upon collection of membership dues, and securing grant funding, which is never guaranteed. Even if there were more volunteers, there is much more that can be done on the avenue that is not possible without volunteers. The biggest benefit of a BID is that it offers a steady and regular flow of funds that allows for the hiring of professional staff. More often than not, BIDs leverage city and state funding that would not have otherwise been allocated for the district (it’s like FREE MONEY!) -- BIDs are able to do this because they have a full time staff with the time and resources to apply for and manage grant money.
