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EXPERT ANALYSIS: Betterment through BIDs

Hoping to encourage retail growth and general economic vitality, most of the world's major metro areas have undertaken some form of revitalization program. But in the wake of massive suburban expansion that began in the 1950s, the United States seems to have forgotten about its cities.

As urban flight drove retail and office expansion out to the malls, the fundamentals of how to maintain livable cities clearly were lost. Eventually, the question for the United States became “What role will urban centers play in this new suburban world?” Given the recent popularity of so-called “Main Street” revitalization projects, it seems the answer to that question might be found in the past.

Working together

Dozens of Main Street projects are now underway across the country. In some cases, states assist their urban communities with programs tied to development funds. One of the most popular tools to emerge in this search for Main Street vitality is the use of Special Assessment Districts, also known as Business Improvement Districts (BID). These unique urban management programs have become a hot topic for big and small cities alike.

Stemming from the early days as merchant groups or business associations, these more powerful — and clearly more structured — agencies have taken Main Street management from a negligent version of “whatever sails into town” to a thoughtful, well-managed business strategy.

Established under state and local laws, such groups are formed by business and property owners within the boundaries of targeted areas. Together, they formulate the “district plan” which acts as the business plan for the commercial center. Once established, the BID can then levy a special tax assessment and conduct a series of programs designed to supplement services preformed by the local municipality. In some states, BIDs can sell bonds, run cleaning programs, hire security forces, produce marketing campaigns, and even host activities specific to an area's need.

Times Square BID in New York City, probably the most recognized BID in the United States, clearly played a major role in the revitalization of what was once the most troubled section of the city. In fact, New York City currently has nearly 50 BIDs. More than 90 others operate throughout New York state. Albany, a city of 100,000 people that has three BIDs, has seen a resurgence of new investment and economic development, with more than $500 million in new growth in the past seven years. Albany's Central BID happens to be the largest in the United States at more than three miles long.

No matter what their size, BIDs are making downtown retail and development very attractive. If you're thinking about opening a business in a downtown area, find out if that city has a BID — it could be one of your best investments.


Anthony J. Capece is executive director of the Central Business Improvement District in Albany, N.Y., one of the most successful BIDs in the United States.

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