A guide to D.C.'s business improvement districts

Via Washington Business Journal, Carolyn M. Proctor

We answer your questions, large and small, about the city's BIDs.

If you’ve changed employers in the District, it’s possible you’ve gained not only a new boss, but also a new BID.

That’s right, welcome to your D.C. BID primer.

The very first business improvement district ever formed was in Toronto in 1970. Shortly thereafter, New Orleans created the first U.S. BID in 1974. Today, there are more than 1,000 BIDs nationwide, with New York City housing more than anyone: 72. There aren’t quite as many in D.C., where 10 BIDs reside.

But that’s still 10 more than we had before the District of Columbia Business Improvement Districts Act of 1996. The law, which passed that May, made it possible for BIDs to form in the city and set down some ground rules for their organization. In D.C., a BID is a nonprofit corporation, not part of the government, and exists within a defined geographic area no fewer than five contiguous blocks — and none of those blocks can be part of another BID’s territory.

But those territories are hardly neat little boxes of blocks. No, they’re separated by seemingly amorphous geographic boundaries that we decided to finally delineate in this city map. Go ahead, hang this one up in your cubicle so you’ll always have your BID bearings.

BID STRUCTURES

The District’s Business Improvement Districts have been formed, primarily, through three different methods. They are:

• Nonprofit partnership– Most BIDs are some kind of partnership, and all are nonprofits. The partnership is typically between the major commercial property owners in the BID’s defined area.

• Nonprofit 501(c)3– Most BIDs are incorporated as 501(c)(6) organizations, which the IRS defines as a business league. Chambers of commerce and boards of trade are other examples of 501(c)(6)s. But the Anacostia BID was made a 501(c)(3) — meaning it is tax-exempt. This also means it can raise more funds as a public charity. Executive Director Ed Grandis said it’s harder to get this status, but worth it.

• Public-private collaborative nonprofit– Mount Vernon Triangle Community Improvement District is a public-private collaboration, meaning it works closely with various District government agencies in order to meet its goals.

THE INNER WORKINGS

What is a BID anyway? As part of our primer, we figured we’d give you the 101 of creating and operating one in the District.

HOW THEY WORK

BIDs are formed in commercial areas by property owners and commercial tenants, who so long as they’re inside a BID’s boundaries are automatically members. In Mount Vernon, residential tenants are also BID members. The good news is the BID will work to make your neighborhood cleaner, safer and a more attractive area to do business. The bad news is you’re funding it with additional real property tax.

HOW THEY’RE STARTED

A nonprofit must be incorporated for the purpose of becoming a BID. That nonprofit’s board of directors — who would be local property owners — would then submit an application with the mayor’s office seeking to be registered as an official BID. They must include a signed statement explaining the nonprofit and laying out proposed BID territory, including property values. At least 25 percent of the commercial property owners in the BID’s proposed area must sign the statement to show support for those extra taxes. The BID application also has to include a business plan, a tax assessor’s map that clearly outlines BID boundaries, a list of members, articles of incorporation and bylaws, and information on the bank where the BID would establish its accounts.

A BID IS BORN

The Downtown D.C. BID was the very first to come about in the District in 1997, and remains the biggest. Rich Bradley was its first executive director, a position he held until last year, when Neil Albert took the reins. The BID takes credit for extending Metro’s midnight closing time to later in the night on weekends — a change that boosted D.C.’s nightlife. At its inception, the BID covered 140 blocks. But in 2008, it ceded two blocks to the then-new NoMa BID.

THE NEW BIDS ON THE BLOCK

• Anacostia (2012): This BID’s mission was geared toward beautification of the area, landscaping and trash removal, while also operating like a chamber of commerce for area businesses. Because of its tax-exempt status (see “bid structures” at left), it can apply for grants — including a $300,000 grant it received last year.

• Southwest (2015): The very newest and 10th D.C. BID formed just last year for Southwest D.C. It is still in temporary offices in the ground floor at Arena Stage, with additional administrative offices at The Wharf — a development focus for the BID, among about 35 others. This BID may be new, but it’s one of the city’s largest, covering 128 block faces or more than 24.2 million commercial square feet. Eventually, it plans to get involved in public spaces, public transportation, helping the homeless and, as it shared with the Washington Business Journal late last year, bringing new lighting to major underpasses in its territory.