The emergence of Business Improvement Districts (BIDs) in the downtowns and central business districts of our cities, both large and small, affords quality job opportunities for asset managers.
Instead of a small number of owners cloistered in high-finish, high-rise office space, the asset-manager-turned-BID-specialist works on Main Street with scores of owners and tenants, as well as with civic organizations, school boards, and churches in the area. While the players are different, many of the skills are the same.
What Are BIDs?
Business improvement districts are self-help ventures organized by property owners and local governments to identify and develop defined areas of cities where a more successful and profitable business climate is needed. In real estate language, these management districts plan for and execute business retention, improve security and maintenance, bring about revitalization and value enhancement, and undertake marketing and development. These are asset management functions re-situated from single-parcel shopping malls or office buildings to large square-block areas of our nation's cities.
"These districts are re-developing or improving the opportunities by which businesses can be profitable," says Donald E. Hunter, president of Annapolis, Md.-based urban consultant and developer Hunter Interests Inc. "What property managers can do in their own lobbies but not up and down the street can, in fact, be done through the BID mechanism."
Business improvement districts are capitalized by the pool of property owners within the identified district, who self-impose an additional real estate tax (e.g., a few cents per $100 of assessed value) or lease pass-throughs. (At least 51 percent of owners in the district must approve the added tax.) Additional funding is derived from annual city contributions and from private sponsorships and grants.
BIDs, sometimes called assessment-financed improvement districts, are typically found in the downtowns or central business districts of our large and small cities. They are legislated by the state or provincial government; more than 1,000 exist today in the United States and Canada.
Asset Management With a Twist
International Downtown Association President Richard H. Bradley says: "Property and asset management issues are highly related to the planning, implementation, and ultimate success of business improvement districts. The common area maintenance practices in suburban shopping centers and competition from these centers spurred downtowns to create management districts."
The BID executive director works with a non-profit board of directors composed primarily of district property and business owners. Usually, a government official also sits on the BID board. One of the jobs of the board is to approve initial and all subsequent business plans. Business plans are the critical operating framework for BIDs and show many of the earmarks of management plans. The business plan is developed and approved by the initial, volunteer board of directors of the proposed BID. …