Business Improvement Districts (BIDs)
Business Improvement Districts (BIDs) are commercial areas of the District of Columbia that collect a "self-tax" from property owners to provide services and programs to the entire BID above and beyond what the city provides. The Department of Small and Local Business Development manages the certification of BIDs and the BID charter extension process.
The purpose of a BID is to improve conditions for businesses in a specific commercial area. The BID is expected to attract and retain businesses, generate jobs and enhance the quality of life for those who frequent the district.
A BID is organized and established by property and business owners to enhance the economic vitality of a downtown or neighborhood commercial area. The cost of BID services is financed by a self-imposed tax on the businesses within the community. If the residents opt to also be taxed, the BID may be called a community improvement district (CID). Often, the tax is a surcharge to the real property tax liability of commercial property. Frequently, these costs are passed by the building's owner to any tenants. The tax is collected by the District of Columbia and all revenues are returned entirely to the organization managing the BID. Business and property owners control the BID and how funds are spent.
BID expenditures are used primarily for purchasing supplemental services, which could include:
- Maintaining commercial corridors through litter and graffiti removal and landscaping (clean teams) to supplement city services;
- Increasing security through the presence of ambassadors who walk the commercial district;
- Promoting the commercial district and the businesses operating therein;
- Providing homeless and youth services; and,
- Making capital improvements (e.g., street furniture, decorative lighting) to supplement city services
Current BIDs and CIDs
Currently, there are nine established business improvement districts, which provide programs that address commercial District-wide issues, e.g., cleanliness, maintenance, safety, promotion, economic development and other collective business issues in their coverage areas.
- Adams Morgan Partnership BID
- Capitol Hill BID
- Capitol Riverfront BID
- Downtown DC BID
- Georgetown BID
- Golden Triangle BID
- Mount Vernon Triangle BID
- NoMa BID
- Anacostia BID
Steps for Establishing a BID in Washington, DC
The first step is to meet with the Councilmember representing the Ward in which the proposed BID is located. If the Councilmember supports the BID initiative, then request the Councilmember consider introducing a bill to establish the proposed BID boundaries and the supplemental taxing rate. The bill should be introduced once steps 4 and 6 below are completed.
Step 1: Form a non-profit BID Corporation.
- Designate incorporators
- Designate the initial Board of Directors (should include at least one business owner who is a BID advocate and is influential at the District level)
- Select the BID Corporation name
- Prepare and adopt articles of incorporation and preliminary bylaws
- File incorporation documents with the DC Department of Consumer and Regulatory Affairs
- Apply for a federal employer identification number
- Apply for IRS recognition as a non-profit, tax-exempt corporation
Step 2: Begin raising money for the establishment of the Business Improvement District.
Step 3: Hire an Executive Director or Consultant who is experienced in the process of establishing Business Improvement Districts in DC.
Step 4: Establish the boundaries of the BID.
Step 5: Develop a database of property owners and commercial tenants in the BID area.
Step 6: Establish the mechanism for calculating supplemental taxes. It is helpful to understand why current BIDs chose their particular tax formulas.
Step 7: Develop BID governance structure and prepare detailed bylaws.
Step 8: Develop a business plan, including a budget and scope of services covering the first 3 years of operation.
Step 9: Prepare and submit the BID application to the Mayor for registration. The application is to include the following components:
- Signed statements in support of the BID formation by the required number of commercial real property owners and tenants in the proposed district.
- Business plan for the first 3 years of BID operation.
- Map of BID area.
- List of initial BID board members.
- Articles of Incorporation and Bylaws of BID Corporation
- List of all commercial property owners in BID area
- List of all commercial tenants in BID area
- Tax formula used for the BID fee and proposed first-year charges
Step 10: Mayor makes preliminary review of the BID application within 15 working days of submission.
Step 11: Mayor issues a finding that BID criteria have been met and schedules a public hearing to be held within 45 days.
Step 12: At least 21 days prior to the public hearing, the BID Corporation must submit a notice of the hearing to each commercial property owner and commercial tenant, each Advisory Neighborhood Commissioner, the Council of the District of Columbia, and each major citizen association within the BID area.
Step 13: Within 10 days after the public hearing, the Mayor shall either register the BID or determine that the BID application requirements have not been met, in which case the BID has 45 days to correct the application.
Step 14: Once the BID has been registered, it can begin operations, including fee assessment.