21. Business Improvement Districts and the Shape of American Cities

In 1999, Jerry Mitchell provided the first national census of business improvement districts (BIDs) and the first actual numbers on program emphases, director qualifications, share of nonprofit corporations versus government entities, and other useful data. Now, in Business Improvement Districts and the Shape of American Cities, Mitchell, a professor of public affairs at Baruch College, the City University of New York, offers fresh insights as well as analyses of subjects too often unquestioned.

While the fundamentals of BIDs remain fairly constant, the decade since Mitchell’s first report has altered people’s understanding of them. For example, the few BIDs with annual revenues of $2 million to $20 million continue to get most public attention, but most BIDs have assessment revenues of less than $300,000. Large BIDs and small BIDs seem to be different species and have little to learn from one another. Most BIDs operate satisfactorily in urban neighborhood commercial areas and in suburban or small-town settings. Small BIDs are not simply underfunded large BIDs; they have substantially different program emphases and, reflecting this, have different governance.

A decade ago, BID planning focused on solving longstanding urban commercial problems, such as the perception of crime. Today, BIDs are more often directed at capturing opportunities, such as attracting new businesses and wider markets. For at least the past decade, BIDs typically have been launched with optimism, not desperation.

The most stimulating and valuable sections of the book consist of critiques of BID programs- reflecting analyses by various non-BID-related experts regarding the worth of such popular investments as marketing and economic development. Using the research cited, Mitchell finds that many BID investments are largely wasted money; one exception is BID responsibility for advocating ‘improved public policies, he says.

Could there be too much BID sidewalk cleaning- a service priority that Mitchell refers to as “an infatuation”?

Often, new BIDs pay for uniformed cleaners- and buy and maintain large, green sweeping machines- not because a certain area of the city particularly dirty, but because this highly visible daily service satisfies ratepayers that they are getting some return on their assessments. Sadly, this often works. Daily cleaning takes a big bite out of small budgets. Will it bring more customers? New stores? These are the kind of questions that are too rarely addressed.

While new evidence may have little effect on some BIDs, which seem content in their ways, others regularly rethink themselves via statutory reauthorization requirements. Still other BIDs remain to be born. Some BIDs may be stale, but there is a need and a market for the number that currently exist. Are BIDs working? The ultimate answer seems to be that ratepayers believe they are getting their money’s worth. Board-approved budgets continue to rise, and very rarely are BIDs abandoned-and those that are, usually because they do too little.

Mitchell’s work answers important questions too rarely raised in the BID world. It should be read widely, especially by new members of BID boards of directors, new BID managers, local city council members sponsoring new or reauthorized BIDs, and state legislators and journalists, especially when they are first confronted with this seemingly unusual organizational concept.

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