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Business Improvement District (BID) FAQ Sheet

What is a Business Improvement District (BID)?
      •   A Business Improvement District (BID) is a public/private partnership in which property and business owners elect
          to make a collective contribution to the maintenance, development, and promotion of their commercial district.
      •   A special assessment of commercial properties to make improvements, fund operations, and promote a business
          district.
      •   Funds can be used for such things as maintenance, public safety/hospitality, business development, marketing,
          landscaping, capital improvements, and paid staff.
      •   Business Improvement Districts (AIDs) are established and operated in Michigan under Public Act 120 of 1961 and
          in Grand Rapids under City Policy 900-54.

What are the benefits of a BID?
      Several advantages result from this arrangement:

      •   A cleaner, safer and more attractive business district.
      •   A steady and reliable funding source for supplemental services and programs.
      •   The ability to respond quickly to changing needs of the business community.
      •   The potential to increase property values, improve sales, and decrease commercial vacancy rates.
      •   A district that is better able to compete.

What does a BID do?
      Business Improvement Districts deliver a range of supplemental services in coordination with municipal services and
      invest in the long-term economic development of their districts. Supplemental services may include:

      Maintenance                             Commercial vacancy reduction                 Custom trash receptacles
      Street / sidewalk cleaning              Business mix improvement                     Directional street signage
      Graffiti removal                        Marketing                                    Custom news boxes
      Public Safety / Hospitality             Special events                               Flower boxes
      Public safety officers                  District public relations                    Landscaping
      Visitor assistance                      Promotional materials                        Planting trees/flowers
      Business Development                    Holiday decorations                          Tree maintenance
      Improved streetlights                   Capital Improvements                         Paid Staff Support

   How are BID programs and services paid for?

      Funds to pay for BID programs and services are generated from a special assessment paid by the benefited
      property owners (note: Many leases have a clause that allows property owners to pass the BID assessment on to
      their tenants). The assessment is billed and collected by the City of Grand Rapids and then disbursed to the BID,
      which in turn delivers the district’s services.
                                                    Neighborhood Ventures
                                       1514 Wealthy SE STE 214 | Grand Rapids MI | 49506
                                            616.301.3929 | neighborhoodventures.org
                                                                                                        © 2012 Neighborhood Ventures
What’s the difference between a BID and the business associations?
   While property owners and tenants could participate in a voluntary business association, the BID model presents
   two distinct advantages:

Business Association                                                Business Improvement District

    •   Does not always offer a continuous source of                    •    Provides a steady and reliable source of
        funding because it depends on voluntary                              funding for district projects.
        contributions.                                                  •    Legislates that all property owners in a BID
    •   Cannot enforce the financial participation of                        will pay an assessment (there are no “free
        all stakeholders.                                                    rides”).

Will City Services be reduced if the BID is providing similar services?
   No. The services provided by the BID are supplemental to the services provided to the district by the City.

Who oversees the BID?
   A Business Improvement District is governed by a Board of Directors as an official public body of the municipality
   in which it is located. The Board of Directors holds fiduciary responsibility of the BID, hires the management staff
   that administers the BID on a day to day basis, and ensures that the special assessment dollars are dedicated to
   projects that benefit the entire district.

BID Development Steps

                                  Planning     -   Outreach     -   Legislation (Adoption)

Planning
        1.     Feasibility Study – Determine whether or not to form a BID.
        2.     Establish a Steering Committee of neighborhood stakeholders.
        3.     Develop a database of property owners and commercial tenants.
        4.     Conduct a needs assessment survey within the district.
        5.     Draft the district BID plan including parcel map, project list, and assessment formula.

Outreach
       6. Communicate with property owners and businesses through informational campaigning.
       7. Hold public meetings to receive input.
       8. Gather no less than 30% written support by petition of proposed assessable property owners.

Legislation
         9.    Present BID plan to City of Grand Rapids for recommendation to move forward.
         10.   Public Hearing on the proposed district with formal notice to all proposed assessable properties.
         11.   Receive consensus for plan via ballot by mail from assessable property owners located in the district.
         12.   Business Improvement District is created when more than 50% of the ballots cast are in support.
         13.   City Commission ratifies the election results and formally creates the BID.




                                                    Neighborhood Ventures
                                       1514 Wealthy SE STE 214 | Grand Rapids MI | 49506
                                            616.301.3929 | neighborhoodventures.org
                                                                                                 © 2012 Neighborhood Ventures

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Breakout 5 Handout: BID Frequently Asked Questions

  • 1. Business Improvement District (BID) FAQ Sheet What is a Business Improvement District (BID)? • A Business Improvement District (BID) is a public/private partnership in which property and business owners elect to make a collective contribution to the maintenance, development, and promotion of their commercial district. • A special assessment of commercial properties to make improvements, fund operations, and promote a business district. • Funds can be used for such things as maintenance, public safety/hospitality, business development, marketing, landscaping, capital improvements, and paid staff. • Business Improvement Districts (AIDs) are established and operated in Michigan under Public Act 120 of 1961 and in Grand Rapids under City Policy 900-54. What are the benefits of a BID? Several advantages result from this arrangement: • A cleaner, safer and more attractive business district. • A steady and reliable funding source for supplemental services and programs. • The ability to respond quickly to changing needs of the business community. • The potential to increase property values, improve sales, and decrease commercial vacancy rates. • A district that is better able to compete. What does a BID do? Business Improvement Districts deliver a range of supplemental services in coordination with municipal services and invest in the long-term economic development of their districts. Supplemental services may include: Maintenance Commercial vacancy reduction Custom trash receptacles Street / sidewalk cleaning Business mix improvement Directional street signage Graffiti removal Marketing Custom news boxes Public Safety / Hospitality Special events Flower boxes Public safety officers District public relations Landscaping Visitor assistance Promotional materials Planting trees/flowers Business Development Holiday decorations Tree maintenance Improved streetlights Capital Improvements Paid Staff Support How are BID programs and services paid for? Funds to pay for BID programs and services are generated from a special assessment paid by the benefited property owners (note: Many leases have a clause that allows property owners to pass the BID assessment on to their tenants). The assessment is billed and collected by the City of Grand Rapids and then disbursed to the BID, which in turn delivers the district’s services. Neighborhood Ventures 1514 Wealthy SE STE 214 | Grand Rapids MI | 49506 616.301.3929 | neighborhoodventures.org © 2012 Neighborhood Ventures
  • 2. What’s the difference between a BID and the business associations? While property owners and tenants could participate in a voluntary business association, the BID model presents two distinct advantages: Business Association Business Improvement District • Does not always offer a continuous source of • Provides a steady and reliable source of funding because it depends on voluntary funding for district projects. contributions. • Legislates that all property owners in a BID • Cannot enforce the financial participation of will pay an assessment (there are no “free all stakeholders. rides”). Will City Services be reduced if the BID is providing similar services? No. The services provided by the BID are supplemental to the services provided to the district by the City. Who oversees the BID? A Business Improvement District is governed by a Board of Directors as an official public body of the municipality in which it is located. The Board of Directors holds fiduciary responsibility of the BID, hires the management staff that administers the BID on a day to day basis, and ensures that the special assessment dollars are dedicated to projects that benefit the entire district. BID Development Steps Planning - Outreach - Legislation (Adoption) Planning 1. Feasibility Study – Determine whether or not to form a BID. 2. Establish a Steering Committee of neighborhood stakeholders. 3. Develop a database of property owners and commercial tenants. 4. Conduct a needs assessment survey within the district. 5. Draft the district BID plan including parcel map, project list, and assessment formula. Outreach 6. Communicate with property owners and businesses through informational campaigning. 7. Hold public meetings to receive input. 8. Gather no less than 30% written support by petition of proposed assessable property owners. Legislation 9. Present BID plan to City of Grand Rapids for recommendation to move forward. 10. Public Hearing on the proposed district with formal notice to all proposed assessable properties. 11. Receive consensus for plan via ballot by mail from assessable property owners located in the district. 12. Business Improvement District is created when more than 50% of the ballots cast are in support. 13. City Commission ratifies the election results and formally creates the BID. Neighborhood Ventures 1514 Wealthy SE STE 214 | Grand Rapids MI | 49506 616.301.3929 | neighborhoodventures.org © 2012 Neighborhood Ventures