Frequently Asked Questions

What is a BID?

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 deliver supplemental services such as sanitation and maintenance, public safety and visitor services, marketing and promotional programs, capital improvements, and beautification for the area – all funded by a special assessment paid by property owners within the district. The City’s 76 BIDs – the largest BID program in the country – service approximately 93,000 businesses and invest over $147 million into local economies in the form of supplemental services.

Who pays for a BID?

Property owners within the BID receive a special assessment on their tax bill each year. The assessment is based off a formula, and can take into account the property's size and/ or commercial frontage. Depending on the terms of the individual lease, business owners might help pay the assessment tax. 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.

Who runs the BID?

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, which must include property owners, commercial tenants, residents, and publicly elected officials. The Board decides how the BIDs budget is spent and who is hired to execute BID initiatives. .

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What services does the BID offer?

The services offered by a BID are responsive to the needs of the community. The Bay Ridge Third Avenue Steering Committee is currently circulating a District Needs Assessment, to gather feedback from business owners, property owners, residents, and other local stakeholders about priority issues on Third Avenue, and what services they’d like to see. The services provided by the BID will be determined by the Steering Committee in direct response to the insight gathered from that survey.

BID programs may include: supplemental sanitation, maintenance, beautification, streetscaping (holiday lighting, trees, flower boxes), community marketing, small business promotion, public safety, city and state advocacy, tourism services and much more. The priorities of a BID can change with time and in response to community feedback.

While BIDs in Times Square and around Grand Central have budgets over $12 million, large staffs and public-relations teams on retainer, Bed-Stuy is typical of younger, outer-borough BIDs, with its annual budget of just $700,000. About a third of that goes for sweeping up trash, removing graffiti and painting street fixtures (BIDs pay their cleanup crews about a third of what the city pays sanitation workers and often hire workers from places like the Doe Fund, a nonprofit that provides jobs and shelter to the homeless.) The BID also installed 24 video cameras along the Fulton Street business corridor, providing footage to aid the police in solving crimes and help merchants dispute fines when someone dumps garbage in front of their shops. In many ways, the BID has been quite useful for the Bed-Stuy business community, said Joyce Turner, the BID's chairman, who also runs a real estate brokerage. When she and a neighboring pizza restaurant were having trouble with their electricity, the BID got in touch with Con Edison to help resolve the issue. When the eatery was not given sufficient time to address Department of Health violations, the BID prevailed upon the agency to lay off for a while. "If you have something to say, it's easier to say it as part of a group," said Turner.- Aaron Elstein, Crain’s New York Business

How are BIDs Formed?

A BID is formed through an inclusive, grassroots process in which key areas of need are identified and support is gathered from property owners, business owners, and local community stakeholders. The community must initiate the creation of a BID. The effort can take a long time and involves the hard work of many local stakeholders.

The NYC Department of Small Business Services (SBS) oversees the formation process, serves as an advisor and resource during the BID formation process, guiding groups through the planning, outreach, and legislative phases of the BID formation process, and then through the start-up of the newly established BID.

SBS requires BID formation Steering Committees to employ good planning, be accessible, and to demonstrate broad-based support for their proposed Plan by gathering signed “Statements of Support” from the following stakeholders within the proposed boundaries:

●      Property owners

●      Commercial tenants

●      Residential tenants

For more information on the BID formation process, go HERE.

What is a Steering Committee?

Once a BID is identified as the best option for a community, a group of local stakeholders form a Steering Committee to lead the formation effort.

A Steering Committee is comprised of property owners, business operators, district residents,  within the proposed BID that diversely represent the community. Steering Committee members are champions of the community and the BID formation and work collectively to Determine key elements of the BID proposal including boundaries, services/improvements BID will perform, the budget, and the assessment formula.

The steering committee will be responsible for driving the BID formation effort through the planning and outreach phases. Committee members attend regular meetings, are vocal advocates of the BID formation, and continuously share information and updates with stakeholders throughout the process.

What will the BID do for me?

BIDs create vibrant, clean, and safe districts. For commercial tenants, this can result in more people out on the streets and more customers. For residential tenants, this means a nicer community in which to live. Property owners within the BID frequently see property values rise.

Will we still receive the same services supplied by the city?

Yes! BIDs receive the same services already supplied by the city -- by law, City services cannot be reduced because of the existence of a BID. Services provided by the BID are supplementary to the city’s services.

In fact, effective BIDs are often able to leverage additional funding for their districts for things like storefront improvements, streetscape improvements and more through city, state and even federal grants. A dedicated professional staff person who has the knowledge and expertise to identify and secure these funding sources is another major advantage of a BID.

Why a BID?

●      A BID offers a sustainable and reliable revenue source to provide  advocacy, supplemental services, promotions, advocacy, and more

●      Local priorities/decisions are managed by local stakeholders and organization administration with structure to respond quickly to changing needs of the business community

●      A cleaner, safer and more attractive business district

●      Collective marketing to expand the reach of businesses further than any one merchant could on his/her own

●      The potential to increase property values, improve sales and decrease commercial vacancy rates

●      A district that is better able to compete with nearby retail and business centers and online retailers.

Why 3rd Ave, Now?

The Merchants of Third Avenue have, for decades, relied on the leadership of a few dedicated community volunteers to advocate for resources, produce events, and generally look after the neighborhood. 25 years later, some volunteers have dropped off and the remaining volunteers are 25 years older. No one is lining up to volunteer nights and weekends to produce the events the community has come to expect and rely upon. Even if there were more volunteers, there is much more that can be done on the avenue such as marketing, streetscape improvements, additional avenue events, government advocacy and facilitating a meaningful internet presence, so that Bay Ridge businesses can adapt to the digital era. All of this is not possible with just a handful of volunteers.

As New York City grows and adapts, and the Small Business environment continues to change and shift with consumer behavior. It is important to the long-standing leadership that the future continues to hold promise for the property owners, community businesses and residents. The idea of a Business Improvement District is perfect for the Third Avenue corridor. It will equalize the commitment and resources of stakeholders, encourage participation via a formal structure with oversight and dedicated administration, and systematize events and the execution of supplemental services. A BID will allow opportunities for new businesses and residents to add their voices and fresh perspectives to carry Third Avenue into future.

Why would I pay extra for services the city should already be providing?

The BID does not provide services that the City already provides. BIDs provide customized supplemental services and improvements that are beyond the City’s baseline services it provides to all citizens.

In some communities, services provided by city government are not robust enough to meet the needs of a successful commercial district. For a district that sees heavy foot traffic, daily trash pick-up might not be enough to ensure that customers have a high quality shopping experience.

Additionally, BIDs offer the advantage of flexibility to control funds at a hyper-local level, and can respond quickly to changes in district needs, avoiding the red tape of city bureaucracy. Resources are allocated by the exact people who know local conditions best. For example, imagine a BID director sees that traffic in the district has heavily increased on the weekends, as a result of some external factor, perhaps a regular weekend concert series. If the current sanitation contract doesn’t cover the trash created by these additional consumers, with Board approval the Executive Director can can quickly allocate funding to pay for additional sanitation on the weekends.

I own a property on Third Avenue. How much is a BID going to cost me?

The Steering Committee determines the total assessment of the BID in response to feedback collected from a District Needs Survey, which offers data about which services are a priority for the community. Once these services have been decided upon and priced out, the Steering Committee can begin to zero in on the total assessment number.

The amount each property pays is dictated by a formula that is unique to each BID. Different BIDs make use of different assessment formulas to determine the cost to an individual property. Assessment formulas can take into account frontage, commercial square footage, assessed value, or some combination of factors. The specific assessment formula employed is determined by the Steering Committee.

Until data has come back from the District Needs Survey and the Steering Committee has determined which services the BID will provide and priced them out, it’s impossible to determine how much each property will pay.

Why would I agree to pay an extra tax that I can’t opt out of?

The BID receives 100% of the money collected from the assessment. Unlike a city tax, a BID takes your assessment and brings it directly back to the community, so taxpayers can see exactly where their money goes. BIDs allow for hyper-local control of funding.

While a Merchants Alliance is an effective model that supports the efforts of many commercial districts, Merchant Alliances also tend to facilitate a “freeloader” phenomenon, as there is no way to enforce the financial participation of all stakeholders in a given district.

All businesses on Third Avenue see the benefits of the events produced by Merchants of Third Avenue, which draw thousands of shoppers to the district from all around the city. While all businesses on Third Avenue reap the benefits of the Merchant Alliance’s efforts, not all businesses pay membership dues.

BID legislation states that all property owners must pay an assessment; there are no free riders. Thus, a BID offers a sustainable, equitable, and reliable source of funding to provide administration, supplemental services, promotions, and advocacy.

In addition to the assessment, BIDs typically do a lot of fundraising through everything from events to sponsorship -- it is common to see BIDs leverage funding that would not have otherwise gone to support the commercial district. But perhaps the biggest benefit of a BID is that it offers a steady and regular flow of funds that allows for the hiring of a professional staff and sustain commercial revitalization programs and services.

“One could argue that the BID assessment takes away from the bottom line and therefore hurts businesses profitability. But then those are probably the same people who refuse to invest in their buildings and businesses in the first place. As the old adage goes, “it takes money to make money.” Maintaining public space is not a luxury -- it is an important asset management tool that if left neglected will undermine the viability of a commercial area. Sophisticated property and business owners know this. That is why they are often the ones spearheading efforts to develop Improvement Districts. Ultimately, these property owners know that the Improvement District will give them a mechanism that creates the administrative capacity and the required funding stream to manage and improve the public experience.” - Larisa Ortiz, Debunking the Arguments Against Business Improvement Districts

Why do we need a BID when we have a very active Merchants Alliance?

For 25 years, Merchants of Third Avenue, with the support of a handful of volunteers, has produced large-scale street festivals, spearheaded collective marketing efforts, advocated for small businesses on Third Avenue, and much more.

Merchants of Third Avenue is heavily reliant on a dedicated team of volunteers, who care deeply about the economic viability of the neighborhood. Without these volunteer efforts, none of what the organization does would be possible - no Christmas lights, no Summer Stroll, no business networking events. 25 years later, some volunteers have dropped off and the remaining volunteers are 25 years older -- while the merchant alliance model has served us for decades, it isn’t sustainable as we enter the modern age of Amazon.

In the words of Steering Committee co-chair Bob Howe: “While Bay Ridge Third Avenue might be doing just fine in 2019 as a result of the great work of Merchants of Third Avenue, we encourage stakeholders to consider the avenue a “Business Investment District.” If we do not invest in our avenue, some not so good things could happen, and may be happening already.”

How will a BID address parking and traffic issues? Homelessness? Exorbitant fines from city agencies?

An important component of the good work that BIDs do in New York City is advocacy and education. BIDs serve as a mouthpiece for small businesses, giving a voice to businesses who might not otherwise have the time, resources, or political clout to advocate for themselves with city government. BIDs advocate for the specific needs of the businesses within their districts, and advocate against policies that unnecessarily hurt small business.

For example, in 2018 businesses across Brooklyn, Queens and Manhattan were struck by a wave of Department of Buildings violations fines for signage they had used for decades. The fines were normally around $4,000, and were issued to businesses for violating a law that most businesses didn’t know existed.

BID directors joined forces with small business owners at a City Hall rally intended to draw attention to the issue, and were vocal with their local Council Members, which sparked the passage of Councilmember Rafael Espinal’s Awnings Act, providing relief to small businesses by creating a 2-year moratorium on new fines for signage, rescinding all outstanding signage fines, giving businesses that have already paid fines a discount on future signage permits, and reducing the fees for signs and awning permits going forward.

BIDs also offer educational resources, giving businesses the information they need to be in compliance and avoid exorbitant fines from city regulatory agencies like Department of Health, Department of Buildings, and Department of Consumer Affairs. BIDs will let businesses know what their responsibilities are, and help businesses that are out of compliance re-adjust to avoid hefty fines.

How will a BID attract new business to the avenue?

A BID is a local nonprofit that is governed by local stakeholders and has the flexibility and on-the-ground knowledge to respond directly to the community. A BID can play an important role in determining what types of businesses come to the district, in direct response to the needs of the local community. Many BID directors liaise with commercial real estate companies to help fill vacancies with businesses that will serve the local population.

Additionally, with cleaner streets, collective marketing, frequent events, beautification initiatives, etc, a commercial corridor becomes a more desirable place to dine, shop and stroll, and thus attracts businesses to the neighborhood.

“Yet while the BID can play the role of advocate, it can also have considerable power in influencing which businesses stick around and which don't… The Bed-Stuy Gateway BID tracks how often locals leave the district to shop and shares that data with property owners. "Maybe the next time you have a vacancy you'll consider that," Executive Director Michael Lambert tells landlords.” - Aaron Elstein, Crain’s New York Business

Aren’t BIDs Taxation Without Representation?

“In fact, quite the opposite- BIDs offer a more direct form of control over the distribution and use of resources than regular tax dollars. Consider that a typical City budget is allocated based on the input of many elected officials. Those elected officials are often beholden to constituencies outside of the downtown that vote them into (and out of) office. This can become a challenge to ensuring that downtown districts get the resources they need to remain competitive” - Larisa Ortiz Associates, Debunking the Arguments Against Business Improvement Districts

 “BIDs have unleashed an enormous amount of private sector creativity towards the solution of public problems. Philadelphia, for example, dubbed “Filthadelphia” by local wags, had been brought to its knees in the 1980s by massive deficits and intractable municipal unions. Cyclones of trash commanded the sidewalks. Now, its historic downtown is clean and orderly, thanks to the Center City business improvement district, which steam cleans the sidewalks every night and sweeps them continuously during the day. Local business activity has increased markedly. Baltimore’s downtown business leaders have dispelled the area’s reputation for crime with roving patrols of uniformed “ambassadors,” who assist tourists and discourage panhandlers.”

Heather Mac Donald, City Journal

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