BIDs Explained

Improving the Trading Environment

A Business Improvement District (BID) is a company which charges a levy – sometimes called a tax – on local businesses and uses the revenue to do everything it can to improve the ‘trading environment’ in a particular area.

BIDs are a Canadian invention, but it’s the American BID model that has been copied in the UK. There are 2,000 BIDs in America with 60 in New York alone. There are 174 BIDs in the UK and 25 of them in London. No UK BID is more than 14 years year’s old.

Without getting too ‘technical’, BIDs are a way of running a city/town/neighbourhood based on the types of management models taught at business school. They rely on a set of instructions organised according to a pyramid structure made famous by the positive psychologist Abraham Maslow. Maslow’s ‘hierarchy of needs’ created a diagram relating to what was needed for human survival. Its first layer of the pyramid centres on basic physiological needs such as breathing, food, water, sleep and sex. Subsequent layers focus on safety, love and esteem, culminating in self-actualisation at the peak.

When it comes to the BID pyramid, which is geared towards creating the optimum trading environment, the first layer on which the whole structure depends, is the creation of a clean and safe environment, so just as man needs to breathe and eat to survive, these parts of the neighbourhood have to be clean and safe. The next layer is ‘transport and access’, and the next layer up is ‘marketing and branding of the area’.

In the UK BIDs tenants pay the BID ‘tax’, whereas in America it’s the property owner who pays the BID tax.

Crudely the aims of a BID are to improve the bottom line for businesses in the BID area and to push up property values in the area. Some UK BIDs have clearly been successful but others not so successful. BID detractors will tell you that BIDs are all about creating places which are for certain types of people and certain activities and not others. Exclusion can be covert or overt. Many UK BIDs make extensive use of CCTV. Also a ‘Clean and Safe’ policy can mean creating a much more pleasant environment for the majority. It can and has in some places, be taken to excess with private security teams threatening, bullying and harassing homeless, eccentric, ‘undesirable’ and vulnerable people.

Further information sources:

http://www.ealingshoplocal.co.uk

www.ukbids.org

www.annaminton.com

Eric Leach

14 November 2012