By Charles Law, Ph.D., Director of UW-Extension’s Local Government Center and
Beth Richmond, Master’s degree candidate, UW-Madison’s Department of Planning and Landscape Architecture

Published in the July 2018 issue of the Municipality – Download full publication: 7 18 FINAL Stressing Over Growth

 

With the passage of Wisconsin Act 184 in 1983, the state has allowed Wisconsin municipalities (i.e., cities, villages, and towns) to create and operate funding mechanisms known as Business Improvement Districts (or BIDs) under the same state statutes legislating special assessments.

A BID represents a specified geographic area where owners of commercial (and, in some cases, industrial) properties are assessed each year to generate funds that can be used for promoting, managing, maintaining or developing the district. Tax-exempt properties (i.e., religious, public utility, or government properties) or those used exclusively as residences are excluded from the assessments.*

UW-Extension instituted a longitudinal study examining Business Improvement Districts beginning in 1992. As we celebrate over a quarter century of this work let’s reflect on what makes the Wisconsin experience unique and what we have learned.

There are now over 1,000 BIDs throughout the country. What makes Wisconsin unique are the number of BIDs that have been created and continue to operate as well as how these districts can be found in both very small and large communities.

Wisconsin ranks third in the country with 83 BIDs currently in operation. BIDs can be found in any size Wisconsin community, but unlike in most states, Wisconsin has a disproportionate number of BIDs in small communities. According to the national BID census completed in 2008, 20.7% of BIDs are located in communities with a population under 25,000. In Wisconsin, that proportion jumps to 48.8%. Many Wisconsin BIDs focus on the more traditional aspects of downtown development including: physical improvement to buildings and the installation and maintenance of street furnishings, lighting, landscaping; marketing and promotional programs; and advocating on behalf of district businesses. But BIDs generally do much more. Rather than focus on the procedures for creating a BID which are documented elsewhere, this article will examine four different BIDs in the state and explore some of the lessons learned from over 25 years of research.

Eau Claire
The South Barstow BID in Eau Claire (population 66,339) was established in 1985 and was the first BID created in the state. Formed out of the Downtown Business Association, whose director and president were eager to find a way to fund downtown beautification projects, it is the largest district of four that currently operate within the city.

The BID was initially responsible for mostly small-scale aesthetic improvements including the installation of banners, informational kiosks, and holiday lighting, as well as street maintenance and cleanup. These tasks are now completed by city staff and hired professionals. Today, BID funds are still used to make the district more pleasing, but focus on more enhanced streetscape improvements including plantings in large flower pots and hanging baskets and the outdoor sound system used to play music along the street.

It is important to note that while the BID budget has increased slightly over time, levy rates in the district have decreased due to the significant amount of new development in the area, including the much-anticipated $51 million Confluence Center in a once blighted part of the downtown. According to Mike Schatz, Eau Claire’s Economic Development Director and BID manager for the South Barstow BID since 2002, “developers choose their development sites carefully after taking neighborhood characteristics into account.” The BID businesses and property owners have taken care of the South Barstow area for years, and the once neglected neighborhood is now attractive to downtown development. The BID has also helped guide the area through the new challenges brought about by the recent development, including parking concerns and road closures; experience obtained through a rich history of doing business in and promoting the area.

As things have improved within the district, there has been an increased demand for plantings, streetscaping, and bike racks outside the district boundaries.

The BID has enjoyed a strong working relationship with the city. At its inception, a city planning staff member monitored the BID budget, took BID Board meeting minutes, and kept lines of communication open between the city and the BID. In 2001, Downtown Eau Claire Inc. (DECI) was created and is now responsible for managing all four of Eau Claire’s BIDs and serving as a liaison between the BIDs and the city. These organizations complement each other well and have made downtown Eau Claire stronger.

With over three decades under its belt, it’s safe to say that the South Barstow BID continues to prove its worth. What started
out as a strategy to fund beautification projects in Eau Claire’s downtown has grown into a dedicated business community and reliable funding source used to promote the aesthetics of the area and to support and integrate new development within the district.

Brodhead
The City of Brodhead (population 3,276) is one of the smallest Wisconsin municipalities with a BID. Operating since 1987, BID support grows stronger every year. Unlike their larger counterparts, the Brodhead BID has never had a paid employee. All of their activities are supported by a volunteer corps that most communities would envy.

Centrally located in idyllic Green County, Amish buggies are a common sight in the community.

Brodhead Mayor Doug Pinnow, a BID Board member for 30 years, and for a majority of those years the BID Board chairperson, noted that establishing the BID wasn’t easy. “About a half dozen property owners didn’t want it and people in general didn’t care about it, so we were creative in determining what properties to include.”

The BID levy per property was originally $2.50/$1,000 of assessed value. This generated about $4,000 which was matched dollar-for-dollar by the city. Its initial focus was working with property owners to spruce up their buildings. The BID paid for half the cost of window replacement (up to $250 per window) and the chemical cleaning of brickwork and window trim.

The BID also improved the streetscape. Street trees, flower barrels, and hanging pots were paid for through BID assessments. The BID built a gazebo, a new wall, and added plantings in the district’s park square. Donations of labor and money pay for maintenance.

People began to notice these improvements and recognized the commitment the BID was making to preserve historic downtown buildings and enhance the look of the downtown. Property owners responded in kind with individuals paying for approximately 30 new light posts of a historic design (each costing approximately $1,000).

The BID also supports general improvements to areas outside the district as a way of attracting visitors and contributing to the quality of life for all residents in the community. This included new community entryway signs and partial funding for three murals. The BID has also helped fund marketing strategies to attract newcomers to the community including magazine advertising, billboards, and radio ads. They are currently supporting the development of a new website and social media campaigns.

Throughout the year, the BID supports a number of promotional events and, most recently, helped start summer Sunday night concerts in a park a block away from the district. City officials have never questioned the annual BID operating plans and, like many other BIDs, the assessment has varied little over time. After the city went through a reassessment process about 20 years ago, they decreased the assessment to $1.80/$1,000, and it has remained that way ever since.

Brodhead’s efforts represent as harmonious an example as you will ever find in downtown development. They work hard to create opportunities for residents to be involved, keep them engaged, and keeps things positive. The BID provides the foundational funding necessary to accomplish this.

 

Beloit
With a population of not quite 37,000, Beloit is a medium sized BID community. The BID is located in its traditional downtown business area. Described by Shauna El-Amin, the BID’s Executive Director, as a community “with an urban flair. Beloit celebrates the arts in all its forms and gives a warm nod to an industrial past. Downtown Beloit is very much a neighborhood, where customers are friends and culture and art are accessible to all.”

Centered on the banks of the Rock River, the district boasts hanging baskets and urns on tree-lined streets, bike paths and a public canoe/kayak launch to encourage walking, biking, and skating, as well as quiet water sports.

Beloit’s BID was formed in 1987. A year later it became one of the first communities to be selected by the Wisconsin Department of Commerce, now Wisconsin Economic Development Corporation (WEDC), as a Main Street Program.

Over the past 30 years, downtown Beloit has experienced a true renaissance. The BID contributes to more than 50 days of events a year: from a summer lunchtime concert series to an ArtWalk featuring local artists; to a Saturday morning farmers’ market that draws more than 90 vendors and 9,200 people weekly. The downtown district prides itself on its low vacancy rate, which currently is less than 4%.

The district provides salaries for two full-time and two seasonal part-time staff to support its programs and activities. Over its 30-year lifespan there have been only four BID managers or directors.

The BID assessment has only changed once when the original rate of $3.21/$1,000 was increased to $4.27/$1,000. The boundaries have not been altered except to reflect changes in street alignment.

 

Kenosha
The property owners in the Kenosha BID known as the Uptown Brass Village (UBV) are interested in reestablishing the previously dissolved district. After 20 years of operation it disbanded in 2005 over concerns of fiscal mismanagement and the perception of impropriety.

UBV is a historic commercial district with many assets located within a dense residential neighborhood, just over 20 blocks west of Kenosha’s lakefront in the heart of the city. With the dissolution of the BID, the area experienced a significant decline in its retail mix and widespread disinvestment.

The push to recreate the UBV has been met with some skepticism as the district struggles to overcome negative perceptions. To build the community’s confidence and establish credibility, UBV gained the Wisconsin Economic Development Corporation’s (WEDC) Connect Community designation in 2017. They have begun hosting high profile art promotions and cleanup events and leveraging key partnerships within the community. UBV now looks forward to tapping the valued experience and technical expertise of their downtown counterparts in Kenosha’s Lakeshore BID (which earned Wisconsin Main Street designation in 2013) and will likewise be considering the formation of up to four sub-committees, fashioned after the WEDC Main Street Program approach (i.e., Design, Organization, Promotion, Economic Vitality) as it grows its volunteer base in numbers and capacity.

 

Lessons Learned

BIDs have been a stable funding mechanism for supporting and sustaining long-term development in many of the state’s traditional business areas and commercial corridors. Despite the fact that BIDs can be dissolved, relatively few (only 10) have done so. The majority of Wisconsin’s BIDs have been operating over 21 years.

Administrative turnover is low. Kaye Tenerelli, Executive Director of the Superior BID retired in 2015 after serving the community for 23 years. Beth Weirick has led Milwaukee’s Downtown Business Improvement District (#21) since its inception in 1998. Menomonie’s BID Manager Marilyn Tye held that position for over 25 years.

BIDs offer flexibility. State statutes do not dictate how a community will assess properties within the BID. Assessment rates and/or the methodology employed are established by the community. BID programs and services can be virtually anything as long as they can be reasonably aligned with the “promotion, management, maintenance or development” of the district.

BIDs can often muster collective action on issues requiring more than municipal leadership and can initiate marketing campaigns and retain professional expertise and physical improvement projects that business owners would be unable to afford on their own.

While local municipalities often augment the BID through grants, joint production, and coordination of special events, the provision of office space and/or equipment, local policymakers might want to consider new ways to provide incentives to
expand participation in Business Improvement Districts.

More information about Wisconsin BIDs can be found at: lgc.uwex.edu

 

About the Authors:
Chuck is a Community Planning and Design Specialist who has served as the Director of UW-Extension’s Local Government Center since 1999. His great Uncle Jim served as President of the League of Wisconsin Municipalities from 1939-41 while mayor of Madison. As a result of the research outlined in this article, he is often called upon to help educate Wisconsin communities about BIDs, how they are created, and how they operate. Contact Chuck at [email protected]

Beth is a recent graduate of UW-Madison’s Planning & Landscape Architecture Department. While earning her master’s degree, she worked with Chuck inventorying Wisconsin BIDs and collaborating with BID managers and BID board members across the state. She now works in Minneapolis as a planner. Contact Beth at [email protected]