Institutionalization of Business Improvement Districts: A Longitudinal Study of the State Laws in the United States

Article excerpt

Business improvement districts (BIDs) have been established in all states of the United States, most provinces of Canada, a few countries in Europe (United Kingdom, Ireland, Germany, and the Netherlands), and South Africa and a considerable size of BID literature has been built in recent decades. BID researchers investigated their implications for democratic participation and accountability (Barr, 1997; Briffault, 1999; Hochleutner, 2008; Justice & Skelcher, 2009), BID-local government relations (Morcol & Zimmermann, 2008; Wolf, 2008), and their successes and failures in helping solve urban problems (Hoyt, 2005; Ellen, Schwartz & Voicu, 2007; Cook & MacDonald, 2011).

After two decades of research, there still is a need to formulate a common conceptualization of BIDs, however. An important problem is whether BIDs should be conceptualized as a distinct form of local government or a mixture of different institutional forms. There are two sets of conceptual issues within this problem. First, is there a single and coherent BID institutional form? Justice and Skelcher (2009) argue that it is possible to identify an ideal typical BID institutional form, despite the considerable functional and institutional diversity among the BIDs in the different states of the United States and other countries (p. 740). Second, are BIDs distinguishable from other forms of special districts? This is an important question, because BIDs are often defined in terms of their similarities with and differences from special districts (e.g., Kennedy, 1996; Briffault, 1999). To answer these questions, we analyzed the definitions and descriptions of BIDs in the enabling laws of the 50 states of the United States, Washington DC, and Puerto Rico.

This comprehensive study of the state laws is needed because the conceptualizations of BIDs in the current literature are based on limited empirical investigations and legal analyses. Mitchell's (1999) nationwide survey in the United States in the later 1990s identified BIDs in 42 states and Washington, DC. Becker and her colleagues' survey in 2010 identified BIDs in 48 states--the only exceptions being North Dakota and Wyoming-and Washington DC (Becker, 2010; Becker, Grossman, & Dos Santos, 2011). However, the empirical and legal studies typically focus on few selected cases and/or few state laws. This narrow focus in the studies does not constitute a sufficient basis for a comprehensive conceptualization of BIDs.

The empirical BID studies have focused primarily on six states and Washington, DC: California (Brooks, 2006, 2007; Cook & MacDonald, 2011; Lloyd, McCarthy, McGreal & Berry, 2003; MacDonald, Stokes & Bluthenthal, 2010; Meek & Hubler, 2008; Stokes, 2008), Pennsylvania (Hoyt, 2005; Stokes, 2006; Morcol & Patrick, 2008; Dilworth, 2010) (1), New York (Ellen, Schwartz & Voicu, 2007; Gross, 2008; Meltzer, 2011), Maryland (Baer, 2008; Baer & Feiock, 2005; Baer & Marando, 2001), New Jersey (Justice & Goldsmith, 2008; Ruffin, 2010), Georgia (Ewoh & Zimmermann, 2010; Morcol & Zimmermann, 2008), and Washington, DC (Mallet, 1993; Schaller & Modan, 2005; Wolf, 2006). Some of the recent studies covered more states. Mitchell (2008) cites examples of BIDs from 15 states, but the main focus of discussions is the BIDs in New York City. Wolf s (2008) survey among BID managers in 11 states focuses only on their relations with local governments.

The BID state enabling law of New York has been the primary focus of the legal studies. This law was analyzed in detail by Kennedy (1996), Barr (1997), and Garodnick (2000). Briffault (1999) conducted the most comprehensive legal analyses of BID state laws, but his study includes only 38 states and he does not compare the state laws systematically in the crucial areas of BID governing models, authorities granted to BID governing bodies, or BID accountability mechanisms. In the other legal studies, authors did not analyze specific laws; instead they provided general commentary on possible implications of BIDs for democratic governance, accountability, and urban governance that are based on others' earlier findings (Davies, 1997; Hochleutner, 2003; Briffault, 2010; Garnett, 2010; Schragger, 2010). …