What is a Business Improvement District (BID)?
A Business Improvement District (BID) is system by which the owners of two or more private properties or businesses cooperate to share the costs to address common problems or realize economic opportunities (e.g., promote business activity, enhance the image of an area). A BID allows businesses within a self-defined district to develop, manage, maintain and promote the district, and establish an assessment method to fund those activities.
Enabled by state statute, a BID authorizes (in coordination with the local unit of government, i.e., city) an ongoing special assessment (i.e., tax levy) that is used to implement various programs and activities outlined in an annual Operating Plan.
The power of a BID is that it is self-governed, enables business and property owners to improve their district in any way they want, and establishes ongoing funding. There is accountability, in that members have a say in how the money is spent, and the BID can be renewed or terminated by vote of property owners at scheduled intervals (e.g., every 5 years).
Where are BIDs Found?
Nationwide, there are more than 1,200 BIDs, and they can be found in every state. The Times Square Alliance, founded in 1992, was instrumental in revitalization of that area. BIDs in communities comparable to Madison include Downtown Boulder (CO), which includes the Pearl Street area, and the Downtown Austin Alliance (TX), established in 1993. In Wisconsin, there are more than 80 BIDs in communities of all sizes. Milwaukee has more than 40 BIDs.
Madison's Central BID #1
Madison's Central BID is Madison's first and only BID. The BID was one of three initiatives of State Street Strategic Plan, and was extended to the Capitol Square and immediate surrounding area. A several-year adoption process concluded with City Council approval in December 1999.
The BID encompasses the greater State Street and Capitol Square area, including the 100 blocks off the square (area in gold at right). It includes appx. 200 property parcels and appx. 370 street level, consumer-oriented businesses (retail, food & drink, entertainment, service).
Goals and Strategic Focus
The goal of Madison's Central BID is to increase the vitality and health of the district and promote business within it. The constituents are the property and business owners within the district. It is not intended as a substitute for City services (such as Mall Maintenance).
The four areas of BID Strategic Focus are to: Market the district as a whole, create a Welcoming Environment, develop Community Relations, and Advocate for the needs and interests of the district
How Does the Madison Central BID Work?
The BID is governed by a Board of Directors representing business, property owners, and district stakeholders such as the UW, students, the Overture Center, and a downtown alder. BID Board member are appointed by Mayor and approved by City Council. There are two full-time staff members plus part-time and seasonal Ambassadors.
The Operating Plan, budget and assessment method are developed by BID Board and approved annually by City Council. The Operating Plan includes a rolling 5-year sunset. The Madison BID special assessment is collected by the city and expended as directed by the Board per the BID Operating Plan. BID staff implement the programs as directed by the Board.
The BID Board meets the first Thursday of the month from noon-1:30 pm, at 615 E. Washington Ave., in the conference room on the second floor. Board meetings are open to the public, and BID business/property owners are encouraged to attend.
BID Special Assessment
BID programs and services are funded by an annual special assessment. The BID staff and Board leverage this assessment to raise additional funds to invest in these programs.
The BID assessment is billed on the annual property tax bills, and is collected by the city along with property taxes. The funds are held by City Comptroller's Office in a segregated account, and disbursed as directed by BID staff per the Operating Plan.
Commercial and partially commercial properties are subject to the BID assessment. Exclusively residential properties, properties used for manufacturing, and properties determined to be exempt from real estate taxes are not assessed. Tax-exempt properties that benefit from BID activities are expected to make a donation to the BID in lieu of taxes.
More information about the method of assessment is available in the BID Operating Plan.
BID Reauthorization 2009
In August, 2009, BID property owners voted to continue Madison's Central Business Improvement District (BID) for another five years (2010 - 2014). More information.