Business Improvement Areas

What is a Business Improvement Area?
A Business Improvement Area (BIA) is an area designated by municipal council in which businesses and property owners can finance effective marketing, promotional and revitalization programs for the area.
 

A BIA provides both the organized structure and the source of funds to enable local business communities to improve their commercial viability. Authority to create Business Improvement Areas is contained in the Community Charter.
 

What are the Benefits?
For property owners and tenants, a BIA is an effective way of increasing sales and profits and to organize and finance programs that would not be available to individual businesses by any other means. For the council, a BIA provides a highly motivated sector of the community with the means to improve their businesses and stimulate the local economy.
 

How is a BIA Funded?
Annual BIA budgets are funded through a special property levy on commercial properties within the designated BIA boundaries. A Business Improvement Area must be established through a BIA local service area bylaw. The bylaw establishes a method and geographic area for collection of a BIA levy through the property tax system. The BIA levy is then passed on to a BIA management group or association to undertake promotional and marketing projects.
 

How to get Started?
The goal of the start-up phase is to prepare a bylaw that all the business people will support. Organizers should ask themselves some basic questions:

• Do we need a BIA?
• What joint promotions should we do?
• What type of organization do we need to manage the BIA?
• Do we need full or part-time management, office staff, or even an office?
• Do we have a business plan for the area?
• What is our image to be?
• What information is already available on items such as the business mix, market studies or municipal plans for the area?
• How are we going to sell the idea of a BIA to the other business people in the area?

Once the direction that the BIA will take has been determined, work can begin on the bylaw. The following should be considered in the preparation of the bylaw:

• the name of the BIA
• the BIA area
• the term of the BIA
• the maximum amount of money to be granted
• method of cost-recovery
• business promotion scheme
• property owner
• approval method

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Name of the BIA
The BIA management group must be a legal entity to allow council to forward the funds. This legal entity must also represent the business people. Therefore, selection of a management group for the BIA, once established, is very important. The group should represent the mix of businesses in the area block by block, retail or professional and other groups involved in marketing, for example, the tourist association or annual parade organizers.
 

The BIA Area

The boundaries of the Business Improvement Area that will be paying the levy need to be identified by map or other means. The boundaries of the BIA should be fair and exclude businesses that will benefit little from the BIA.
 

The Term of the BIA

Determine what term will work for the BIA in view of the goals that have been developed.
 

The Maximum Amount of Money to be Granted
Organizers will need to advise council how much money will be needed in the first year. For a starting point, consideration could be given to what the area has been paying recently for promotions (the Christmas parade, an Easter campaign, and so on). If it adds up to a sound and fair budget, the BIA will cost no more than in the past but it will mean an end to frequent solicitation for money. Successful small promotions may attract better participation in larger promotional campaigns later on.
 

Method of Cost-recovery
How will the money be raised through the taxation bill?
Options include:

• A tax on land, or improvements, or both;
• Parcel tax (fixed amount per legal parcel of land);
• Frontage tax (fixed amount per lineal foot of frontage);
• Property value tax ($ per $1,000 of assessment); and,
• A tax on another basis (e.g. $ per square foot.)

The method must be as fair and equitable as possible. Council may decide to collect a fixed amount each year, a different amount each year or a lump sum for the life of the BIA term, divided annually as the BIA sees fit. This information must be written into the bylaw.
 

Business Promotion Scheme
Council can only grant money to a BIA that has as one of its aims, the planning and implementation of a business promotion scheme. The scheme must included one or more of the following:

• carrying out studies or making reports respecting on or more areas in the municipality where business or commerce is carried out;
• improving, beautifying or maintaining streets, sidewalks or municipal-owned land, buildings or other structure in one or more business improvement areas;
• the removal of graffiti from buildings and other structures in one or more business improvement areas;
• conserving heritage property in one or more business improvement areas; and
• encouraging business in one or more business improvement areas.

Property Owner Approval Method
The municipal council must authorize the drafting of the bylaw to create the BIA. It will define the geographic area and specify the funding formula. The annual levy will be added to the property tax of each landowner. Once the bylaw is drafted, the council must give it three readings. After the third reading, the BIA bylaw goes back to property owners to receive their formal approval before the BIA can actually be created. There are three methods through which this approval can be given:

• Petition of Support, in which at least half of the property owners, representing at least 50% of the assessed value of land and improvements that would be subject to the BIA tax, must sign a petition indicating their support;
• Council initiative, in which council advises property owners it will enact the bylaw unless more than half the landowners, representing at least 50% of the assessed value of land and improvements that would be subject to the BIA tax, register their dissent; or
• Assent of Electors (referendum).

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Managing and Operating a BIA
Once a bylaw has been passed and approved, the organizers must deal with:

1. Membership
2. Board of Management
3. Staff and consultants
4. Annual budgets

1. Membership

Although all commercial and industrial property owners must contribute financially to the BIA, the organization itself decides who can be a member. Candidates can include property owners and business owners. Voting rules should also be decided.
 

2. Board of Management
Members must decide the composition of the Board and its electoral procedures. They can assign positions to represent property owners, business owners who are tenants and municipal council. The organization will also have to decide on a formal structure and may give authority to the board to form sub-committees with specific jobs, to prepare annual work programs and budgets and to implement the work program, which may include marketing, consulting studies, streetscape maintenance, design work, hiring of staff and liaison with council. The board is not allowed to incur debt, own real property or undertake capital works on private land.
 

3. Staff and Consultants
A BIA must decide the most appropriate way of achieving its objectives. They may choose to depend entirely on volunteer workers or they may find it necessary to hire full or part-time staff or consultants or to use a combination of volunteer work, permanent staff and short-term contracts.
 

4. Annual Budgets
A BIA is a legal entity and must report its expenditures yearly to its members. At the annual general meeting, BIA members approve the budget for the next year. The budget is presented to council which allows the levy to be collected for the next year's activities. BIA budgets might include items for staff and office administration, street marketing and maintenance (banners, flowers, Christmas lighting), promotions (Christmas campaign, newspapers ads, special events), parking (awareness programs) or research on customer profiles and future promotions.
 

The Business Improvement Area of BC (BIABC) is an organization that represents a number of municipal business improvement associations in the province. The BIABC offers outreach services to its members and future members. In addition to producing a newsletter and holding annual conferences, they have produced manuals and brochures regarding business improvement areas.