A BID is a geographical area in which at ... - Great Cities



Business Improvement Districts

M.G.L. Chapter 40O

DEFINITION:

A BID is a designated contiguous geographical area in which at least 75% of the land is zoned or used for commercial, retail, industrial or mixed uses. Through an assessment, property owners within the district vote to initiate, manage, and finance supplemental services above and beyond the baseline of services provided by the city or town in their district.

ELIGIBLE BID ACTIVITIES:

• District Management Services

• Maintenance and Security

• Business Services

• Promotion and Marketing Services

• Physical Improvements and Property Management

BID FEE:

• All property owners are assessed a fee in addition to their real property taxes to fund the supplemental services and programs provided by the BID.

• The municipality’s collector/ treasurer collects the fees and distributes them to the BID. The municipality can charge the BID for this collection service.

• The BID legislation provides various formulas for determining the BID fee; to date, BIDs in MA have used assessed value.

• The amount of the fee is established separately by each BID. The amount assessed cannot exceed one-half of one percent (.005) of the total assessed value of the real property owned by participating members in the district. The Hyannis Bid has an assessment of .003; the Springfield BID has an assessment of .005.

• The BID has the option to limit or cap this maximum annual fee. The Springfield BID caps the amount assessed from a single property at $4,000.

• Owner-occupied residential, agricultural, or tax exempt properties may be exempted from the annual fee.

• Unpaid BID fees may result in a lien being placed on the delinquent property by the city/town after being recorded at the appropriate registry.

BID MANAGEMENT:

• BIDs are managed by a Board of Directors.

• There is no prescribed number of Board members. The number depends on the size of the district and is generally in the teens.

IMPLEMENTATION OF A BID:

• The following 4 components outline the legislative requirements for establishing a BID:

1. Petition

2. Public Notification and Public Hearing

3. Declaration of BID by municipal governing body and commencement of BID activities

4. “Opting-out “ period

• It is recommended that communities considering a BID first undertake a process that includes consensus building, marketing of the BID to property owners, developing an improvement plan to address district needs, and establishing or identifying a management entity to implement the plan. This planning stage generally lasts from 10 to 20 months.

• Once a completed petition is submitted to the municipality it takes about 5 months to obtain approval. On average, the entire process takes about a year and half to complete.

PETITION:

• The legislation requires that those property owners supporting a BID petition the local municipal governing body.

• The petition must contain the signatures of the owners of:

1. at least 60% of the real property and

2. at least 51% of the assessed valuation of the real property within the proposed BID.

• The petition must also contain the following:

1. a description and site map delineating the boundaries of the BID;

2. a proposed improvement plan detailing the supplemental services and programs, revitalization strategy, update mechanisms, budget, and fee structure;

3. the identity and location of the BID management entity; and

4. the criteria for waiving the fee for any property owner within a BID who can provide evidence of financial hardship.

• Prior to the public hearing (see information below), the municipal governing body will direct the city/town clerk or his/her designee to determine that the petition contains the required items and that the required process of notification (see information below) was followed.

• Within 30 days of receipt of the petition, the city/town clerk must forward the petition to the Department of Housing and Community Development.

PUBLIC NOTIFICATION & PUBLIC HEARING:

• Within 60 days of receipt of a BID petition, the municipal governing body must hold a public hearing to receive comment on the proposed BID.

• Written notification of the public hearing must be mailed to each property owner within the boundary of the proposed BID within 30 days prior to the hearing.

• All mailings and public notices must include the information contained in the submitted petition.

• The municipal governing body will hear comment, enter all comments into the public record and outline the process for “opting-out” of the BID.

DECLARATION OF THE BID & COMMENCEMENT OF BID ACTIVITIES:

• Within 45 days after the public hearing the municipal body may vote to declare the BID organized and describe the boundaries and service area of the district.

• All individual property owners in the BID must be notified in writing, and the notification must be published in local publications.

“OPTING-OUT” PERIOD:

• Any property owner within the BID may, within 30 calendar days after the municipality declares the BID organized, elect not to participate or “opt-out” of the BID.

• By “opting-out” a property owner is neither subject to the BID fee nor eligible to receive any of the benefits or services of the BID.

• The property owner must notify the city/town clerk in writing of his/her desire to opt out. He/she may elect to participate in the BID at a later date.

• Acceptance of participation in the BID is permanent until BID dissolution or property transfer.

• Upon transfer of the property within a BID, the new owner has 30 days to “opt- out” of the BID.

BID UPDATING & DISSOLUTION:

• The improvement plan must be updated every three years by the BID Board of Directors and a copy sent to each BID member.

• If the new plan provides for expenditures or program services which affect more than 25% of the project budget, proposes that the BID incur indebtedness or changes the fee structure, management entity or district boundary, municipal approval will be required. The approval process must follow the same steps as outlined in the original submittal of a BID petition.

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