WHAT IS A BUSINESS IMPROVEMENT DISTRICT?

A Business Improvement District (BID) is a formal entity that allows property and business owners to come together to make a collective contribution to the improvement of their commercial district. BIDs are modeled after common area maintenance (CAM) fees in shopping malls. In addition to their rent, mall tenants pay an extra fee to maintain and beautify the public areas in the malls and provide things like “free” parking, security, lighting, and marketing for the mall as a whole.  

WHY CREATE A BID?  

Each BID creates a plan to address its specific areas of concern but generally a BID is formed to create a cleaner, safer, and more attractive business district; ensure a steady and reliable source of funding for supplemental services and programs, which they can often leverage for additional funds; be able to respond quickly to the changing needs of the community; build potential to increase property values, improve sales, and decrease the number of vacant properties; and help the district to compete with nearby retail and business centers.

WHAT DO BIDS DO?

BIDs deliver a range of services over-and-above normal City services and invest in the long-term economic development of their districts. BID services include public space maintenance and greening, public safety enhancements, streetscape improvements including lighting and street furniture, business attraction and assistance, marketing and promotions, and visitor assistance.

HOW ARE BID PROGRAMS AND SERVICES PAID FOR?

Funds for BID programs and services are generated from a special assessment paid by the benefited property owners directly to the organization that manages the BID’s activities. (Note: many leases have a clause that allows property owners to pass the BID assessment on to their tenants.) Because they are authorized by the City of Philadelphia, the assessment levied by the BID becomes a legal obligation of the property owner and failure to pay can result in the filing of a lien. The Callowhill BID has been established as a Municipal Authority and under a provision in that act will assess residential properties at a rate of 50%.

WHAT IS A BID ASSESSMENT AND HOW IS IT CALCULATED?

A BID assessment is a fee that each property owner pays to support BID operations. The BID allocates the cost of its services by having each property pay their proportionate share of the budget, which can be determined by an objective standard such as the property’s share of the total assessed market real estate value of the entire district. BIDs can supplement their budgets from other sources such as grants, sponsorship income, or other income-producing activities.

Based on the total year one budget of $322,118, the Callowhil BID is currently using a rate of .12% (.0012) x a property’s Full Market Value (includes any abated amounts) for commercial properties and a rate of .06% (.006) x a property’s Full Market Value (includes any abated amounts) for residential properties. To find your Full Market Value, please visit the OPA Website.

WHAT OTHER BIDS OPERATE IN PHILADELPHIA?

There are currently 14 BIDs in Philadelphia. The first BID was Center City District, which was created in 1990. Other BIDs in operation are Aramingo Shopping District, Chestnut Hill District, City Avenue District, East Passyunk Avenue BID, Germantown Special Services District, Manayunk Special Services District, Mayfair BID, Mount Airy BID, Northern Liberties BID, Roxborough District, Old City District, Port Richmond Industrial Development Enterprise, and South Street/Headhouse District. Other areas in the process of attempting for form a BID are Fishtown, North Broad and the Italian Market.

WILL CITY SERVICES BE REDUCED IF THE BID IS PROVIDING SIMILAR SERVICES?

No. When BIDs are authorized, the City enters into an agreement with the BID and commits to maintain the level of services that would be provided if there were no BID in place.

WHO OVERSEES THE BID?

BIDs are democratic in that the same people who benefit from what BIDs offer are typically the ones who plan, manage, and finance the BID. Each BID is independently governed by a volunteer Board of Directors comprising of property owners, business people, residents and others.

Under the Municipal Authorities Act which Callowhill BID was created under, the members of the board must generally live, work or own property in the City of Philadelphia or projects which extend into the City, and be tax compliant with the City of Philadelphia. Board members have overlapping 5-year terms which begin on January 1, but when an authority is first created, some of the original appointments are for shorter periods so vacancies occur each year. For a list of proposed Board Members for the Callowhill BID and information on how to apply to become an inaugural Board Member, please see our Involved Citizens page.

HOW IS A BID FORMED?  

Forming a BID requires widespread support among property owners and commercial tenants who are fully informed about the proposed program. To create a BID, a core group of property owners and businesspeople will need to invest substantial time and effort to develop the BID 5 year plan and persuade their peers to support the BID.

In Philadelphia under the Municipal Authorities Act, after an Ordinance to establish a MA is introduced, a 5 Year Plan and Budget must be created and presented at a Public Hearing and is followed by a 45-day objection period in order to assess properties. If more than 1/3 of property or business owners within the district who would be subject to the assessment (either by number or by the value of their property) oppose the 5 Year Plan of a BID by writing to the Chief Clerk of City Council and the proposed BID, the effort is defeated. This process begins again after 5 years in order for the BID to continue to assess properties.


WHAT STEPS HAS THE PROPOSED CALLOWHILL BID ALREADY COMPLETED TOWARD CREATING A BID?

Callowhill BID held a publicly advertised meeting,  introduced legislation to form as a Municipal Authority in May 2017.  With the help of Center City District, the BID Services, Budget and Assessment rate were created and presented to community at 2 large meetings (CNA Nov 2018, 35 attendees; CID January 2019, 30 attendees). Outreach has also included small and large meetings or speaking engagements with property owners and stakeholders including: CNA, PCDC (June 2018, March 2019), The Rail Park, Sunday Breakfast, Roman Catholic, Bethesda Project Shelter, AAI, Beaux Arts, 428 + 429 N 13th (condos).

A technical error was found during City Law Department review in the language in the method of assessment regarding future years. The BID Plan has now been edited and resubmitted to Commerce, Council and the Law Department after additional input was received from the community at the originally scheduled March 27 Public Hearing and an additional community meeting about the BID at the Callowhill Neighborhood Association on April 8.

WHAT HAPPENS NEXT?

Once Law Department review is complete, the formal Public Hearing date will be set. The Plan will be posted on this website and sent to all affected properties in the district 30 days in advance of the Hearing, in both English and simplified Chinese. That meeting is expected to take place in late May or early June and will include translation services. It will be followed by a 45-day objection period, if more than 1/3 of property or business owners within the district who would be subject to the assessment (either by number or by the value of their property) oppose the 5 Year Plan of a BID by writing to the Chief Clerk of City Council and the proposed BID, the effort is defeated.

If successful, the Callowhill BID will begin implementing services to the district on October 1 of 2019.