14. BIDs of the Future Will Get More Creative About Services, Funding, and Partnerships

Municipal officials including the police chief urge business leaders to consider BID potential in Springfield, PA

Lawrence O. Houstoun Jr., a principal with the Atlantic Group consulting firm, Cranbury, NJ, understands business improvement districts (BIDs) so well that he literally “wrote the book” on them -twice. The newly released, 250-page second edition of BIDs: Business Improvement Districts expands its predecessor’s definition of BIDs, and reflects the broadening scope of services that BIDs provide.

In fact, Houstoun’s presentation at the Lntemational Downtown Association’s annual conference this fall in Cleveland, titled “The Future of BIDs,” cited a wealth of examples of BIDs getting creative, suggesting the shape of things to come.

Beyond patrols and festivals

Innovative, nontraditional uses of BID go well beyond “uniformed patrols and periodic festivals ,” and Houstoun predicts that “BIDs will (or at least can be) far more influential than at present.”

Examples of BIDs getting clever range from how services are provided to how the BIDs themselves generate additional revenue to provide services.

For example, downtown Atlanta, GA (pop. 416,500), has increased the mobility of its ambassadors by giving them Segways, the battery-powered, gyroscope-balanced people movers, or “Human Transporters,” as the manufacturer refers to them.

“At six miles per hour, they fit a mobility niche somewhere between walking patrols and bike-mounted security staffers,” Houstoun remarks, just about the right speed for overseeing the efforts of sidewalk ambassadors in a large downtown.

The 65-member Ambassador Force of Downtown Atlanta, which patrols a 200-block area, was “an early adopter” of the new technology, with its purchase of six Segway units for use by shift supervisors in early spring 2002.

On average, three of the units are out on every shift; more if there happens to be a convention or especially heavy traffic downtown, says Richard Orr, senior project manager for communications, Central Atlanta Progress and the Atlanta Downtown Improvement District.

“They’re extremely functional,” Orr says. “r would suggest BIDs consider them, especially with a district as large as ours …. Our supervisors oversee three to four individual ambassador beats during a shift, maybe three to four square blocks each, and it keeps the supervisor out in easy contact with all the ambassadors under his or her supervision.”

NJ groups offered special credit cards

In an example of ingenuity on the revenue-generation side, two small downtown organizations in Maplewood, NJ (pop. 23,870), jointly launched a Visa credit card, with revenues paid out by the sponsoring bank dedicated to funding facade improvements.

Unfortunately, the sponsoring bank, United Trust/Elan Financial Services, cancelled the credit card because it wasn’t generating enough revenue for the bank, says Virginia Lamb Falconer, village manager of the Maplewood Village Alliance. Her special improvement district (SID) partnered with the Springfield Avenue Partnership in the community credit card venture.

At least from the SIDs’ perspective, “it was very lucrative,” Falconer says. “We got $6,000 a year from it, which for us was a lot.”

The Maplewood Visa incentive card had 119 cardholders when it started in November 1998, Falconer says, and grew to 257 holders by July 2001. Dismantled in August 2002, the program earned the Maplewood Village Alliance alone a revenue share of $26,050, Falconer says, from $1 ,300 in its first two months to $6,489 in its last eight months of operation.

“We’d love to start another card, but I haven’t pursued it yet,” says Falconer, who recently started in her position with the Maplewood Village Alliance. “We definitely would be interested in doing that again,” she says.

Main Streets are adopting BID mechanism

Houstoun believes that the future may also hold a greater prevalence of BID-Main Street hybrids (see DIX, I 011 S103, p. I). Kennedy Smith, head of the National Main Street program, estimates that as many as 20 percent of members have BID financing, he says.

Where Main Street programs must divert a large portion of staff time and energy annually to voluntary fund-raising – up to a third of staff time by a former Main Street board chairman ‘s estimate – Houstoun says, BIDs have the advantage of a “predictable funding source with the fiscal power of the local government behind it.” However, BIDs are weak in technical assistance, whereas Main Street programs serve smaller and geographically isolated downtown communities especially well.

“While the marriage may not everywhere be easily accomplished, the necessity is great and the prospects favorable,” Houstoun says.

Future prospects for BIDs in general are extremely favorable, Houstoun says. In conclusion, he says: “BIDs can look forward to a favorable future to the extent that they remain outcome-focused; that they adjust services to reflect new and changing conditions; that they continue to attract new blood to leadership positions; and that they create working partnerships with the government culture while continuing to foster the culture of individual enterprise.”

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