Business improvement districts can take advantage of opportunities and solve problems such as deteriorated commercial buildings and signage, empty lots and buildings, and the absence of marketing capacity. In a nutshell, a BID links the owners of two or more private properties or businesses, enabling them to share the costs of solving common problems or realizing economic opportunities associated with their area. BIDs represent systems of cooperation in which business representatives agree to a formula for cost sharing and for managing the implementation of plans they have helped shape. This sustainable funding system enables predictable, dependable, multi-year budgets.
Sustainability requires that property assessment or business tax be compulsory, multi-year, and applied to all benefiting properties or businesses. Once adopted, it is enforceable with the power of government to collect the assessments. The principal distinction between BIDs and Main Street projects is the reassurance that budgeted BID funds will be available five or more years in advanced, enabling multi-year contracts with vendors, agreements to employ staff, and, where authorized by law, the ability to finance capital improvements.
A BID may be managed by a public agency or, more often, a nonprofit cooperation. In either case, oversight is the responsibility of a board of directors whose membership is dominated by business and commercial interests, reflecting those who pay the assessment. While governments have limited authorizing and oversight responsibilities, the onus for planning, financing, and managing districts resides with the private sectors. BIDs are not "privatization" of government functions. They are better described as "cooperative capitalism."
