BID (short for Business Improvement District) is the generic name for a defined cohesive commercial district within a municipality, where property owners pay an assessment in order to cooperatively secure a greater level of services than is normally delivered by the local government.  The formation and operation of a BID is governed by North Carolina General Statutes, Article 23 – Municipal Service Districts (§160A-535 – 544 ).

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A BID can be very useful to meet the special challenges of owning and operating property or a business within a highly trafficked public area.  While mall management offices undertake efforts such as cohesive marketing, seasonal decorations and intense levels of ongoing maintenance, businesses and property owners in public districts either pay for these services individually, or go without, often leaving them at competitive disadvantage with private commercial collectives.  BIDs are a very cost effective way of ensuring that challenges common to property owners within the district are addressed cooperatively.  They are also very equitable, since only property owners within the defined district are assessed for the additional services that are above and beyond what is normally provided by a municipality.  BIDs can also be an effective way of leveraging additional funding in the form of grants and other contributions from entities outside of the district.

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Under North Carolina enabling legislation for a Municipal Service District (MSD), there is a great deal of flexibility in the type of services a BID can provide.  Some of the most common services provided by a BID were both mentioned by the City of Raleigh in their original BID Study request for proposals, and confirmed by public opinion expressed at a recent public workshop.  These include: enhanced security, enhanced maintenance, advocacy, and cohesive marketing of the Hillsborough Street district.

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Does a BID only include commercial properties, or can residential properties be included?

Residential properties can be included within the boundaries of a BID, and those included within the boundaries are subject to the BID assessment. The Hillsborough BID Study Area does include residential properties, but whether these residential areas might be included within the boundaries of a proposed BID has yet to be determined.   For some residents living in close proximity to Hillsborough Street, exclusion from a proposed BID may seem desirable at first glance. However, other residents will recognize the benefits of inclusion, including enhanced services that might be provided by the BID, the potential increase in property values that could be realized as the BID succeeds in its mission, and the opportunity to occupy “a seat at the table” and have a say in how the BID operates and the programs and services provides.   

The Hillsborough Street BID Steering Committee is currently considering input from area residents, examining various boundary options, and weighing the potential benefits and drawbacks of including residential properties within a proposed BID. 

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How is a property owner or entity that is not usually taxed, like a University or College, assessed?

Non-assessable properties are “exempt” from BID assessments.  However, in many cases non-taxed entities within or near a BID area often choose to make a payment, or other contributions, in lieu of taxes to support the purpose and goals of the BID.  Along the Hillsborough Street Study area,  North Carolina State University is undoubtedly a strong presence and a large stakeholder in the future of the street.  Representatives from NC State are working with the Hillsborough Street BID Steering Committee to ensure that they are engaged and working cooperatively with other stakeholders toward mutual goals. 

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Can assessments collected in the district be spent elsewhere?

No.

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No, if your property is within the proposed BID boundaries and the BID is approved, it is not possible to opt out individually.  Every care is being taken, however, to ensure that the voices of stakeholders are heard during the process to ensure that most agree that BID benefits are worth the cost of any additional assessment.

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Are there many other BIDs in the United States?  In North Carolina? What about in Raleigh?

There are many BIDs throughout the United States. The formation of a BID has proven to be an equitable and highly effective method of ensuring both stable funding, and local control of expenditures, for what can be the intense needs of intensely used commercial districts.  There are more than 40 BIDs in cities large and small throughout North Carolina.  In Raleigh, the Downtown BID has been credited with fueling new investment and the resurgence of the downtown area.

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What are some examples of services that would be provided by the proposed Hillsborough Street BID? [Updated 05.31.08]

The Hillsborough Street BID Formation Study includes proposals for a variety of services and programs as part of a five-point Action Agenda organized by priority areas identified throughout the course of the study. The Action Agenda outlines strategies and provides examples of BID services and programs in the areas of:

· Safety and Security

· Maintenance and Management

· Marketing and Promotion

· Business Development

· Advocacy

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How would Hillsborough Street BID services be provided? [ Updated 05.31.08]

Under Municipal Service District (MSD) statutes, the City may provide services in a service district with its own staff, through a contract with another governmental agency, through a contract with a private agency, or by any combination thereof.  Statutes further stipulate that, “When a city defines a new service district, it shall provide, maintain or let contracts for the services for which the residents of the district are being taxed within a reasonable time, not to exceed one year, after the effective date of the definition of the district.”   Contracting with the Hillsborough Street Partnership to provide and manage BID services is among a number of options that might be considered by the City Council. 

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What are the proposed BID Boundaries? How were they determined? [Updated 05.31.08]

You can click here to download and view a map showing the proposed Hillsborough Street BID boundaries.

The process to arrive at the proposed boundaries considered a number of options relative to the need and desire for enhanced programs and services that could effectively be provided through the formation of a BID. The resulting boundaries generally align with underlying commercial zoning patterns and would generally extend east-to-west along Hillsborough Street from St. Mary’s School to Meredith College. The BID’s southern boundary would largely follow the railroad right-of-way that crosses the N.C. State University campus. The northern boundary generally extends one block north of Hillsborough Street.

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How much will a BID cost me if I am in the district? [Updated 05.31.08]

North Carolina General Statutes for an MSD provide that the City Council, upon determining that an area warrants a services district, may tax the property within the district at a rate determined to generate enough revenue to support the additional services to be provided by the district. 

Based upon the additional programs and services needed for the proposed Hillsborough Street District, an initial levy is proposed at a tax rate of ten (.10) cents per $100 of assessed valuation for property (both real and business personal) within the proposed district boundaries. A ten-cent tax rate is expected to generate total BID revenue in an approximate amount of $129,000 in the first year of tax collection. Additional revenue from other sources is estimated at $235,000, for a total initial year operating budget of about $364,000.

Example:

Calculating an Annual BID Assessment

Annual BID assessments are calculated using the assessed valuation for property (both real and personal) as determined by County Assessor tax records and the service district tax rate as determined by the City Council. The following example shows calculations to determine the annual BID assessment for a property with an assessed valuation of $300,000 and the proposed BID tax rate of ten (.10) cents per $100 of assessed valuation.

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How does the BID rate proposed for the Hillsborough Street BID compare to other BID rates in North Carolina? [Updated 05.31.08]

The following list shows the initial rate of levy proposed for the Hillsborough Street BID compared to BID assessment rates in several other North Carolina communities with similar BID programs.

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We’re glad you asked!  Please don’t hesitate to email your question to Kristopher Larson, the City of Raleigh’s project manager for the BID Formation Study.   Kris will try to respond promptly, and because this FAQ is a dynamic document, we may even add your question here.