Friday, August 19, 2016
BID/EID: " Maybe the merchants of New Albany should consider helping themselves through this device."
Way back in 2010, before the Disneyesque edifice of New Gahania began to emerge, fully TIFFed, from the smoldering ruins of England III, Mike Ladd had an excellent suggestion for the consideration of downtown merchants.
At the time, Mike was the executive director of the New Albany Urban Enterprise Association, sadly destined to be messily deposed in 2012 by the incoming emperor and Clark County aide-de-camp.
However, six years down the pike, Mike's self-help idea for downtown merchants retains considerable merit. His guest column is repeated here in its entirety.
GUEST COLUMN: Sometimes we have to help ourselves
More and more lately, as executive director of the New Albany Urban Enterprise Zone, I am asked to fund this project, or maybe that more worthy one instead, or even, how about that one over there. The line begins right over there and extends around the corner.
Generally, I am forced to enlighten the questioner that my funds are as limited as theirs and I’ve already committed funds to the various projects in my own organizational program of work, while also supporting a number of other programs being operated by other organizations.
But then I occasionally get the more thoughtful questioner who realizes that help won’t be coming over the hill like a cavalry charge; that limited budgets and even more limited revenue sources are a problem for everyone, they wonder aloud exactly what can be done? What partnerships can we form and how do we go about it?
That’s when I say, “Maybe it is time the business community step up and seek its own solution. In this time of tax cuts, coupled with diminishing revenues for local governments and nongovernment organizations (NGO’s), there is a tool that provides funds for downtown improvements and maintenance that the city or NGOs might never have funds to accomplish.”
I am speaking of a Business Improvement District (also known as an Economic Improvement District — BID/EID respectively).
A Business Improvement District is a self-help tool created by the Indiana Legislature, and 49 other states as well (Wyoming being the only state not to have such legislation), allowing property owners within a self-defined area to organize and assess the cost of providing desired services for their area. Through establishment of the district, property owners impose upon themselves an assessment to raise funds for use in said district. The fees are collected through the property tax billing system. For a business, the fees are deductible as a business expense.
State law requires a petition process. The petition must include a map of the proposed area, a list of property owners, a proposed budget and a proposed list of board members for the district. The law also requires the majority of board members must be property owners. As this is a grassroots, bottom-up effort, the petition must be signed by a minimum of 51 percent of the total property owners in the district and by the owners representing at least 66 2/3 percent of the assessed valuation in the district. These thresholds must be reached prior to the city council being able to consider the request to establish the district.
The BID provides a mechanism for property owners to commit resources for a collective effort to provide services beyond those provided by the municipality. The proposed plan allows owners to contract for management and services similar to those found in shopping centers and office parks.
In Indiana BID’s are able to fund multiple-point programs to grow downtown property owners’ investments, namely:
• Planning or managing development or improvement activities
• Designing, landscaping, beautifying, constructing or maintaining public areas, improvements i.e. lighting infrastructure, utility facilities, water facilities, sewage facilities, improvements and equipment sidewalks for public areas
• Promoting commercial activity or public events
• Supporting business recruitment and development
• Providing security for public areas
• Acquiring, constructing or maintaining parking facilities
• Constructing, rehabilitating or repairing residential property
Business improvement districts have several characteristics that differ from other community development and main street revitalization tools. They operate in a clearly delineated area within which property owners and/or merchants are subject to a tax or fee assessed under city tax authority.
BIDs are established locally according to state enabling legislation. They operate as nonprofit organizations, bringing special skills and services to downtowns that local governments are unable to provide.
Today there are an estimated 800 downtown business districts in the United States in communities ranging in population from 1,000 to more than eight million. Some cities have multiple BIDs, each geared to a different neighborhood or commercial center. All states, except Wyoming, have legislation enabling BIDs.
Within broad legislative parameters of promoting and marketing downtowns and making them clean and safe, BIDs have undertaken creative approaches to downtown revitalization, and have been credited with many downtown turn-arounds. When BIDs were first formed in the 1970s and 1980s their primary activities were removing litter, making the streets safe again and boosting local businesses.
Over the years BIDs have expanded the scope of their activities to include: Promotion of their unique settings and historic architecture; installation of parks, benches and street lighting; and having special events. As strong advocates for downtowns, BIDs pressure local governments for services and help to change the rules to make these areas better places to live and work.
One advantage of the BID/EID program is that businessmen and women with a shared purpose can embrace that vision with a unified voice, make plans and important decisions in a partnership that embraces the larger vision of the district and present a consensus of thought.
A number of towns in Indiana currently have BID/EID’s; Greencastle, Goshen, Valparaiso, Kendallville among them; all equal to or smaller in population than New Albany. So local successful models exist and could be copied.
Maybe the merchants of New Albany should consider helping themselves through this device.