Building improvement districts
By Dale Ellis
Lombardo
&
amp; Gilles
A couple months, we wrote about redevelopment and how it can be
used to improve areas of a city or town. This article is about
building improvement districts, which is another tool that can be
used for the private improvement of commercial areas.
Building improvement districts
By Dale Ellis
Lombardo & Gilles
A couple months, we wrote about redevelopment and how it can be used to improve areas of a city or town. This article is about building improvement districts, which is another tool that can be used for the private improvement of commercial areas.
What is a Business Improvement District (“BID”)?
A BID allows private landowners to assess themselves to raise funds to improve their area (the district). Revenue raised in the district may only be used to benefit property in the district. The BID raises additional revenue to enhance the district and does not replace existing city or county funding.
How is a BID established?
BIDs are generally established in one of two ways. If more than 50 percent of property owners in an area want to create a BID, then they may petition the city or county to do so. Alternatively, the city or county may propose a BID by adopting a resolution of intention with a subsequent vote by property owners. Types of improvements and activities to be financed by the BID are specified at that time. If the BID is approved by the property owners and the respective city or county, then the BID is established and an advisory board is appointed. In California, BIDs last only five years and then must be either renewed by the property owners or go out of existence.
Who runs the BID?
A privately-originated BID is governed by a board of directors elected by the property owners within the district. If the BID is formed by the city or county, then the BID is governed by the city or county with input from an advisory committee.
What does a BID cost?
Once a BID is formed, property owners in the area who would benefit from the BID are subject to an annual assessment. The amount of the assessment is stated in the BID or by the city or county establishing the BID. Some BIDs assess property owners per linear foot of property while others are based on a percentage of assessed value of the property each year.
How is the money spent?
As part of the creation of the BID, a master plan is developed that provides direction for the activities of the BID. The BID generated funds can be used to augment city and county services or may be used for improvements in the district. Some BIDs use their funds for store front improvements, landscaping, sign programs or security.
BID or RDA?
BIDs are different than Redevelopment Agencies (RDA) and serve an entirely different purpose. RDAs are and will continue to be a very valuable and effective tool for the long term improvement of an area. BIDS are not a substitute for an RDA but they may work together. BIDs generate funds for very specific purposes and are used only within the BID. BIDs are relatively short term (five years) compared to an RDA. The owners in the BID have more direct control of the actions of the BID than an RDA.
What should I do if I want to know more?
There is much more information about the opportunities and operation of a BID than can be discussed here. However, there are many resources available to you. Web sites are full of information. Staff at the City Hall or the courthouse can assist you. Or, consult with a land use attorney or a local planning firm to learn more.
This column is the work product of Lombardo & Gilles, LLP, which has offices in Hollister and Salinas. Dale Ellis is a land use specialist with Lombardo & Gilles, LLP. You may contact the author at (888) 757-2444 or [email protected]. Mail your questions to Dale Ellis, It’s the Law, c/o The Pinnacle, 350 Sixth St., Ste. 102, Hollister, CA 95023.
