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last modified: Saturday, December 17, 2005 3:57 PM

Business Improvement Districts: New York City

Amanda Goski


Intro to BIDs

Generally, some of the least attractive characteristics of cities are the trash, security, and deterioration of buildings found within them. With the growing demand for government funding and the diminishing ability for government to provide tax dollars for maintenance and beautification of neighborhoods and districts, new sources for this type of funding are in dire need. Building and business owners individually feel no responsibility of cleaning up the public space because they cannot count on their neighbors doing the same. All the time spend on such an effort would be a waste since the surrounding area would still be in a poor state. Because of this, business improvement districts (BIDs) were created to address issues of trash, security, redevelopment, and other tasks such as marketing. After an introduction to BIDs, a closer look will be taken at New York City BIDs. For an overview of BID Alternatives, please see the article by Shayna H. Hirshfield.
BID Description
A business improvement district is a “self-imposed financing mechanism implemented by business and property owners for local improvements, specifically the enhancement of public services (Houstoun, 2004; Hoyt, 2004).” North America first saw the creation of BIDs in the 1970s. An article by Lorlene Hoyt (2004) describes the works of Jane Jacobs and Oscar Newman as being a strong base for the social need for these types of districts to be created. In other words, public safety and profitability come from the design and cleanliness of an area and the level of activity that the business owners participate.
Who Participates in a BID?
BIDs are comprised of residents, business owners, landowners, and public officials. BIDs can be industrial and residential, but most are commercial and may contain some residential or industrial mix (Houstoun, 2004; Hoyt, 2004; Garodnick, 2000; Colley, 1999). An important aspect of a BID is that it is business initiated. Government cannot create a BID and force an area to accept it. Also, a BID needs the acceptance of fifty percent of the number of landowners. This means fifty percent of the number of landowners, not fifty percent of the land owned. This is a strict requirement because there are situation where one person owns a majority of the land in an area. Landowners play an important role because these are the people paying the extra taxes.
How a BID Works
Before formally creating a BID, enabling legislation must already be in place that will allow for the creation of the district. Because local governments are given power from the state these governments must have state approval to allow these quasi-governmental bodies. Approximately 42 states give local governments the right to create business improvement districts. Several states having the most BIDs are New York, North Carolina, Wisconsin, and California. States still needing to have enabling legislation adopted are West Virginia, New Mexico, and Missouri. Hawaii recently adopted this into their legislation. Consultants believe there to be one thousand business improvement districts in the United States (Colley, 1999).

In order to create a BID properly, several careful steps must be followed (Garodnick, 2000; Colley, 1999). Foremost, support needs to be gathered from a variety of groups, or shareholders in the area. These participants are described in the previous paragraph. A committee is created using members of the groups. The group’s main task after creation is coming up with a plan. The BID will not officially be approved until a majority of the voters agrees upon a plan. Plans need to outline the services provided by the BID, the boundaries of the district, and a budget that will cover several years (Garodnick, 2000).

Depending on the situation a particular area is in, services can vary in each BID. Business improvement districts just starting may begin by just offering cleanup services. Cleanup encompasses trash pick up, graffiti removal, landscaping, and improvement of signage. Boundaries for the district must be clearly defined, agreed upon by the majority of the district members, and mapped. Because the BID will be receiving tax revenue, a preliminary itemized budget should be presented and followed closely.

Once all of the district plans are submitted in the governing body overseeing the district, they are forwarded on to the City Council or public officials. It is customary for the municipality to hold a public hearing to allow proposed district members to reject the plans. If a fifty-one percent objection is obtained, the business improvement district will not be created. This is a very strictly enforced stipulation. In order to successfully maintain the BID, strong support is vital.

Keys to Successful BIDs

In must of the material available on business improvement districts, there are some essential components for their success outlined in an article by Sharon Colley (1999). The three main points of successful BIDs are:

• Business initiated.
• Business planned.
• Business led.

The simply stated points are what makes or breaks a BID proposal. Without local business owners’ desire to make their streetscape cleaner, safer, and more marketable, these BIDs would never be initiated. Colley (1999) also outlines eight important steps to follow for creating BIDs in a clear and concise format. These steps are as followed:

• Make sure the BID is a good option.
• Check for state enabling laws.
• Get good advice.
• Evaluate funding sources for formation and operation.
• Create a strong foundation.
• Build support.
• Start small.
• Plan for success.

These steps are believed by many BID advocates to lead to strong and effective business improvement districts.

NYC BIDS – Case study
Due to the success of some of the older BIDs, new BIDs are popping up all over the country. New York City, NY is a very big proponent of business improvement districts. Currently, the City has over 50 BIDs in both Manhattan and Brooklyn (New York City Dept of Small Business Services), and they anticipate adding to that number. Because of the large number of BIDs in the city, the focus will be on a few different BIDs throughout the city: the Union Square Partnership, Grand Central Partnership, and the Lower East Side BIDs.

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Union Square Partnership

Created in 1976, the area surrounding Union Square has one of the oldest BIDs in the State of New York (Union Square Partnership). According to the Union Square Partnership web site, the goal of the business improvement district is to use neighborhood improvements to create an environment conducive to economic growth. A few of the services offered through the group are "supplemental sanitation, graffiti removal, public safety and promotional services to improve the neighborhood’s quality-of-life." Recently, Union Square Partnership rebuilt a fence around Union Square Park, educational programs received funding, made guides for restaurants and shopping, plus more. It is apparent the Union Square Partnership BID is very active in creating a successful business district and a safe and vibrant community.

Grand Central Partnership

One very successful BID which has been around since the 1980s is the Grand Central Partnership. The GCS web site (Grand Central Partnership, 2003) contains a lot of the information about the 68 block area. The creators of the business improvement district were both property owners and business leaders who wished to encourage growth in a region where little growth was occurring. A few of the services provided are protection, sanitation, business promotion, and building. Public safety officers patrol the area and offer assistance to those in need. As with some of the other BIDs sanitation services are offered in addition to what the city has in place. This ensures that the area is kept clean on a regular basis. Walking tours are available to tourists looking for the best place in the community to shop, eat, and sightsee.

Lower East Side BIDs

The Lower East Side (LES) BID is dedicated primarily to the beautification of the areas surrounding Orchard Street in Manhattan. The LES web site (2005) is mainly focused on shopping services geared towards the consumer. However, tools and services are available for BID members to utilize. Tree planting and tourism are a few of the options available. A unique opportunity offered through the BID in cooperation with Chase Bank and Fleet Bank is storefront improvement funds to encourage shop owners to redo their facades.


What is great about the New York City BIDs is the amount of support they get from the City government. Also, almost all of them have web sites that detail the different happenings in each district. Among other things, it helps business owners advertise, which is a service the city cannot afford to assist with. The web sites do an excellent job of listing the various retail establishments available, restaurants, new beautification projects, contact information, and much more. For more information on NYC bids please visit the New York City Department of Small Business Services.


BIDs are a way that community business owners can take action to improve the local character of a neighborhood. The improvements made by these organizations assist in making a community more inviting, safer, and more beautiful for people to want to do business there. Many cities are unable to offer these services because of the limited funds and personnel available. This is especially true in a place like New York City. When community leaders have enough initiative and willpower, business improvement districts can be an extremely powerful and successful economic development tool.