Frequently asked questions
Below find answers to the many questions people have about Business Improvement Districts. We've also created a one page document with answers to the top questions we hear the most. Have another question? Shoot us an email at email@example.com.
What is a Business Improvement District?
A Business Improvement District (BID) is a formal entity that allows property and business owners to come together to make a collective contribution to the improvement of their commercial district.
BIDs are modeled after common area maintenance (CAM) fees in shopping malls. In addition to their rent, mall tenants pay an extra fee to maintain and beautify the public areas in the malls and provide things like “free” parking, security, lighting, and marketing for the mall as a whole.
Why create a BID?
Each BID Steering Committee creates a BID District Plan which includes the specific services their BID will provide. But generally, a BID is formed to create a cleaner, safer, and more attractive business district; build potential to increase property values, improve sales, and decrease the number of vacant properties; ensure a steady and reliable source of funding for supplemental services and programs, which they can often leverage for additional funds; be able to respond quickly to the changing needs of the business community; and help the district to compete with nearby retail and business centers.
What Services do BIDs Provide?
BIDs deliver a range of services over-and-above normal City services and invest in the long-term economic development of their districts. BID services include public space maintenance and greening (sidewalk litter removal, planter maintenance), public safety enhancements (security cameras, supplemental police coverage), business attraction and assistance, marketing and promotions (special events, district branding and advertising), capital improvements (lighting, directional signs, street furniture), and visitor assistance. City services will NOT be reduced if a BID is created.
How are BID programs and services paid for?
Funds for BID programs and services are generated from a special assessment paid by the benefitting commercial property owners directly to the organization that manages the BID’s activities, so all funds stay in the community. (Note: many leases have a clause that allows property owners to pass the BID assessment on to their tenants.) Because they are authorized by the City of Philadelphia, the assessment levied by the BID becomes a legal obligation of the property owner and failure to pay can result in the filing of a lien. Owner-occupied homes and apartments are EXEMPT (see below).
WHO DOES NOT PAY THE ASSESSMENT?
Owner-occupied single unit residential properties would be EXEMPT and WOULD NOT pay the assessment in the proposed Northern Liberties BID, and the portion of a commercial property that is owner-occupied for multi-unit properties will also be EXEMPT, however voluntary contributions would be welcome.
What is a BID assessment and how is it calculated?
A BID assessment is a fee that each property owner benefitting from the services provided pays to support BID operations. The BID allocates the cost of its services by having each property pay their proportionate share of the budget, which can be determined by an objective standard such as the property’s share of the total assessed market real estate value of the entire district. BIDs can supplement their budgets from other sources such as grants, sponsorship income, or other income-producing activities.
What other BIDs operate in Philadelphia?
There are currently 13 BIDs in Philadelphia. The first BID was Center City District, which was created in 1990. Other BIDs in operation are Aramingo Shopping District, Chestnut Hill District, City Avenue District, East Passyunk Avenue BID, Germantown Special Services District, Manayunk Special Services District, Mayfair BID, Mount Airy BID, Roxborough District, Old City District, Port Richmond Industrial Development Enterprise, and South Street/Headhouse District.
Who oversees the BID?
BIDs are democratic in that the same people who benefit from what BIDs offer are the ones who plan, manage, and finance the BID. Each BID is independently governed by a Board of Directors comprising of property owners, business people, and other individuals, as spelled out within the bylaws that govern the BID organization.
How is a BID formed?
Forming a BID requires widespread support among property owners and commercial tenants who are fully informed about the proposed program. To create a BID, a core group of property owners and business people need to invest substantial time and effort to develop the BID plan and ensure that there is adequate support for the BID from their peers.
Once the need for a BID has been established, a Steering Committee is formed to oversee the creation of a BID District Plan, which will include important items like what services the BID will offer, service area boundaries, annual budget, what types of properties are assessed, by-laws of the governing organization, and when the BID will need to be renewed, which is typically every 5-10 years. The BID District Plan is then presented to property and business owners in the district, as well as the larger community, and if sufficient support for it exists, the legislative phase can begin.
In Philadelphia, the Community and Economic Improvement Act now governs the process for creating BIDs. Under that act, BIDs are authorized by City Council and subject to a public process that includes at least two public hearings and notification of all property owners and tenants within the district. The two hearings are followed by a 45-day objection period. If more than 1/3 of property owners within the district who would be subject to the assessment (either by number or by the value of their property) oppose creation of a BID by writing to the Chief Clerk of City Council, the effort is defeated.
What steps has the Northern Liberties BID taken toward creating a BID?
A small group of business and property owners, utilizing funds donated from the 2nd Street Festival, came together to formally investigate the possibility of creating a BID in Northern Liberties. They held a Steering Committee Interest Meeting on February 8, 2017 at the Northern Liberties Neighbors Association office, with more than 40 attendees. From that group, a Steering Committee was formed and began meeting formally on March 1, 2017. That group has met monthly since, all Meeting Minutes are posted on this site.
At the first Steering Committee Meeting, a study area was established and a needs assessment survey was created to find out what services would be of the most benefit to the district.
The survey results and feedback from two well-attended Community Meetings in the fall of 2017 have guided all decisions on what services the Steering Committee included its BID District Plan and Budget. More items from the plan and helpful items such as sample assessments and the final NLBID Boundaries are available on our BID Plan page. Once the Plan was finalized, a Resolution to create the BID was adopted by City Council. Finally, the Plan was sent to all affected property owners and tenants in the district.
What happens next?
The BID's proposed services will be presented at a Public Hearing in City Council Chambers on Monday, April 9 at 10am. For more information on the BID Plan and the process, please see our BID Plan page.
For more information on BIDs and the BID creation process, please see the City of Philadelphia’s Starting a BID in Philadelphia.