What is a BID?
A Business Improvement District (BID) is a public/private partnership where:
· Property and business owners choose to make a collective contribution to their commercial neighborhoods.
· The funding is used for the maintenance, development, and promotion of their commercial district.
The idea for BIDs is modeled on the shared maintenance program of many suburban shopping centers. Malls are typically single properties, managed by one entity that sublets the retail space to multiple tenants. Tenants pay a common area maintenance fees to underwrite services that enhance the appearance of common areas and provide cooperative advertising for the mall and its stores.
A BID works in much the same way but unlike a mall, a BID is made up of multiple property owners who agree to pay the extra assessment fee (See What is a BID assessment?). Thus, stakeholders in a commercial district can align themselves in much the same way to improve their area.
Advantages of a BID for the property owners and merchants are:
· Increased property values
· A cleaner, safer and more attractive business district
· A steady and reliable funding source for supplemental services and programs
· The ability to respond quickly to changing needs of the business community
· The potential to improve sales and decrease commercial vacancy rates
· A district that is better able to compete with nearby retail and business centers
What does a BID do?
Business Improvement Districts deliver a range of supplemental services in coordination with municipal services and invest in the long-term economic development of their districts.
The Fulton Street BID Steering Committee and Pratt Area Community Council conducted a survey in 2005 of property owners, business owners and residents/shoppers to determine our commercial district needs.
In response to our survey, supplemental services/improvements during the first year of the Fulton BID would include:
Maintenance
Street / sidewalk cleaning, Graffiti removal
Public Safety / Hospitality
Public safety officers, Visitor assistance
Business Development
Commercial vacancy reduction, Business mix improvement
Marketing
Special events, District public relations, Promotional materials, Holiday decorations
Capital Improvements
Improved streetlights, Custom trash receptacles, Directional street signage, Custom
News boxes, Flower boxes
Landscaping
Planting trees/flowers, Tree pit maintenance
Community Service
Fundraising, Charitable events, Homeless and youth services
Future improvements might include:
Directional street signage, Custom news boxes, Flower boxes
How big is the Fulton Street BID?
There are approximately 380 tax lots within the Fulton Street Brooklyn BID’s boundaries, 44 of which are tax-exempt (such as Culyer-Gore and Crispus Attucks Parks) and 138 are residential
There are approximately 27 unique property owners in the BID.
There are approximately 207 businesses operating within the Fulton Street Brooklyn BID’s boundaries
What are the Fulton Street BID Boundaries?
The Fulton Street BID will extend from Rockwell Place to Classon Avenue on the south side of Fulton Street and from Rockwell Place to Classon Avenue on the north side of Fulton Street. It will also include side streets and corners with commercial activities
How are BID programs and services paid for?
- Property owners within the BID area pay a special assessment for the programs and services.
- Many property owners have a “pass-through” in their lease for these assessments, allowing the merchant to pay for the BID.
- The assessment is billed and collected by the City of New York and then disbursed directly to the BID, which in turn delivers the district’s services. (The City takes no fee for collecting the assessment; every dollar collected is returned to the BID to pay for BID services)
The money that is collected by the City goes directly to fund the BID programs and services, which are selected by BID members.
What is the Fulton Street BID Budget?
First year ‘s budget: $300,000
Service Expenses
Security $35,000 12%
Sanitation & Graffiti Removal $95,000 31%
Promotion & Marketing $40,000 13%
Holiday Lighting $25,000 8%
New Initiatives $15,000 5%
BID Manager (incl. benefits) $50,000 17%
Administrative Cost $11,000 4%
Total $271,000 90%
Operational Expenses
Rent $0 0%
Utilities $1,500 ½%
Insurance $5,000 2%
Meetings & Publications $3,000 1%
Telephone $1,500 ½%
Postage $2,000 1%
Equipment $4,000 1%
Audit & Legal $5,000 2%
Miscellaneous $7,000 2%
Total $29,000 10%
Why is the Fulton Street BID budget set at $300,000 for the first year?
· This will be to make sure the budget works.
· We have 25+ blocks within the BID
· Multiple side streets e.g. Lafayette and Putnam Ave
· 270+ businesses to maintain
· Security is essential (see Why does Fulton Street BID need security)
· Marketing e.g. holiday lighting and promotional materials
· Sanitation e.g. street sweeping, and garbage removal
How much will the Fulton Street BID cost me?
· There are approximately 1,301 residential units.
· Assessment equals $48 per linear foot of tax lot frontage per year in the first year.
· Total commercial front footage on Fulton Street (from Rockwell Place to Classon Avenue) is 6,126 feet.
· Total front footage on Fulton (from Flatbush to Classon) is 7,813 feet
· The total assessed value of all properties in the BID is $11,889,184
· Average annual assessment for a 20 ft. property is $960 per year.
o ASSESSMENT: An amount determined as payable (e.g. Fee paid by property owner for the BID)
o ASSESSED VALUE: The dollar value of an asset assigned by a public tax assessor for the purposes of taxation. (e.g. assessed value of property)
What is a BID assessment?
A BID assessment is a fee that each commercial property owner pays based on the amount of linear foot frontage of their property to support the operations of the BID.
The sum of all the individual assessments that property owners pay makes up the total yearly assessment of the BID. These fees will underwrite most of the annual operating expenses.
The total yearly assessment is unique to each BID in NYC, ranging from $53,000 to more than $13 million.
The Fulton BID Steering Committee is proposing a first-year budget of $300,000. The first-year assessment rate would be $48 per foot of front footage. In following years the BID Board approves an annual budget that can increase on an incremental basis, if needed. The budget cannot ever exceed $400,000 as per City Council approved cap.
- Commercial property owners for a 20-foot storefront will pay $80 per month.
- Nonprofit property owners are not subject to these assessments.
- Residential property owners pay only $1 per year for the BID.
- Vacant commercial property owners pay the full assessment for the Fulton BID.
Why does the Fulton Street BID need security?
Unlike some BIDs, security was a concern in the Fulton Street survey because of the following security risks:
· Two methadone clinics on Fulton Street, a third nearby
· Seven subway entrances
· Four bus lines running within the BID
Other BIDs use security services. For example, Steinway BID uses car patrol, which they find NECESSARY and EFFECTIVE.
Who oversees the BID?
Each BID is governed by a Board of Directors that is elected by the members of the district in the following classes:
· Commercial property owners
· Commercial tenants
· Residents
· Public officials (Public officials include the Mayor, Comptroller, Borough President, and a member of the City Council and are defacto board members.)
BID members vote for directors in their respective classes. The majority of directors must be property owners. The Board of Directors votes on the annual budget, sets policies and priorities, and oversees the operation of the BID.
Outreach
We had 12 meetings with property and business owners, plus five informational mailings. We will also hand deliver informational materials, then end with two public meetings.
Support
As you may know, your neighboring merchants, property owners and residents have participated in a BID steering committee, working with Pratt Area Community Council (PACC) to plan a Business Improvement District (BID) on Fulton Street. We encourage your support and involvement with our efforts to make Fulton Street a more marketable, cleaner, and safer place to live, visit and shop.
Will City Services be reduced if the BID is providing similar services?
No. The services provided by the BID are supplemental to the services provided to the district by the City.
For example, if a BID provides sanitation services, it will still receive the same level of service from the Department of Sanitation as it did before supplemental services were added.
Are NYC’s BIDs successful?
There is significant evidence that indicates that BIDs have met with great success and have improved business conditions throughout New York City. BIDs measure their success in a variety of ways:
Service Delivery: Examples of the level of services that are achieved help to understand the success of a BID. BIDs such as the Grand Central Partnership collect 54,600 tons of garbage per year. The public safety officers of the Times Square BID make 600,000 public contacts per year.
Commercial Property Rates: Many BIDs reduce their commercial vacancy rates by as much as 27 percentage points.
BID Renewal Rates: Each BID in New York City has elected to continue or expand its operation since its inception. None have chosen to dissolve.
What is the role of Pratt Area Community Council for the Fulton Street BID?
Pratt Area Community Council (PACC's) economic development team has been working for many months to organize the BID proposal process. PACC helped guide the steering committee through the budget selection process, provided manpower to conduct community surveys, and acted as a liaison with the Department of Small Business Services.
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