Partner Article

Landlords get a chance to BID for success

Business Improvement Districts (BIDs) were set up to improve declining areas as a public-private partnership. An early example of an official BID was recorded in Canada in 1970 from whence they have spread around the world.

There are now 140 in the UK and they have, in general, been very successful, contributing about £300m to regeneration and management for towns and city centres.

We have two in the North East. The NE1 Business Improvement District Company oversees Newcastle’s which was set up five years ago and is due to come up for renewal in October. The second is in Durham City centre, established in December with 86% of businesses in favour of a 1.5% levy on rates that will produce £1.5 million over five years for the city centre improvement.

In line with the government’s ‘decentralisation’ theme, the (Mary) Portas Review in late 2011 recommended “empowering successful BIDs to take more responsibility and powers” and supported the introduction of legislation “allowing landlords to become high street investors.”

Minister for Cities Grant Shapps responded by providing £500,000 seed funding to help BIDs access loans for set up costs and to explore the feasibility of property owner BIDs under the power of the Business Rates Supplement Act 2009.

The Act gives power to local authorities to impose a business rate supplement for expenditure on a project that the authority is satisfied will promote economic development. A proposed BID is subject to a ballot of non-domestic rate payers, and lasts for a period of five years, thus the BID is totally accountable to the local business community.

The big debate has always been that most BID rate payers are tenants. However, property owners also benefit from any improvements so why are they are not involved? A small number of property owners do support to BIDs but there is an additional wrinkle that as non-ratepayers they do not get a say in what improvements are planned. They are, however, few and far between.

The government has now grasped the nettle and is consulting on this issue until 17 September. You can find full details online at https://www.gov.uk/government/consultations/property-owners-and-business-improvement-districts

I have long been an advocate that to create change and to achieve a more dynamic centre, that the setting should be where people can live, relax, shop and work – instead of just a series of buildings.

A modern example is Newcastle’s east Quayside, however it is a process that has been taking place for centuries. The prestigious estates of Mayfair and Belgravia did not just happened in the 17th and 18th centuries nor the famous Garden Cities of Letchworth and Welwyn Garden City in the early 20th century. All were planned.

The economic benefits of BIDs depend on the people who create jobs and wealth in a particular area and they are enjoyed by all. But for this to be sustainable the process needs to fair and equitable – and I’m certain that property owners grasp the opportunity when it comes.

Real success will be achieved by property owners, businesses and residents working together to a common goal form which they will all gain.

This was posted in Bdaily's Members' News section by JK Property Consultants .