OBID director explains the benefits of an improvement district
BIDs have been around since the 1960s and the first one was in Canada, Georgia Petropoulos Muir, executive director of the Oakland Business Improvement District, told members and guests of the South Side Chamber of Commerce at the November luncheon.
There are now more than 1000 in existence in downtown centers throughout the United States.
“You need a couple of things for a BID to be successful,” Ms. Muir said. “First of all you need a high densely populated business district.”
She emphasized she was talking about a Business Improvement District which only incorporates commercial properties as opposed to the Neighborhood Improvement District which was proposed for South Side and would have included residential properties.
The OBID works in the Fifth and Forbes corridor areas and includes properties owned by the University of Pittsburgh, UPMC and Carlow University. She added the universities and hospitals do own commercial properties and businesses that do pay taxes in the area.
Commercial property owners are members of the BID as are the universities and hospitals.
“Our BID was formed in 1999 because there was a challenge in the 90s. For those of you who might remember what Oakland looked like in the 90s, it was a tad grimy. We were the bar destination actually at the time,” she said. “We had clubs. We had bars. We had a really strong nighttime scene, but we didn’t have a strong daytime scene so that was a challenge.
“It wasn’t an attractive district. It definitely wasn’t clean and it wasn’t a place where tenants bent over backwards to locate to.”
As a property owner it didn’t bode well tenants didn’t want to locate in their spaces, she said. In some parts of the business corridors there were vacancy rates as high as 12 percent.
The non-profit institutions were a big part of starting the BID in the late 90s, in addition to the commercial property owners.
The Oakland BID collects funds from the stakeholders (property owners) and those funds go back into the commercial district for whatever the stakeholders feel they need.
“Most of the time you’re going to hear clean and safe,” she said.
With clean and safe what most people want to see, the first thing you do is eliminate the litter, she explained.
The OBID’s annual budget is about $500,000 a year, a couple of years they topped out at $700,000. Clean and safe is one of the biggest pieces of their budget taking up to about half the money. However, they don’t hire police officers.
“We work with police forces. There are actually nine police forces in the district so we don’t feel a need to add another police force,” she said.
Marketing is another thing they do to promote the area.
“We do a boatload of events,” Ms. Muir said. Their latest event is called “Shop Small, Shop Oakland” which took place on November 30.
She said they now have one of the highest occupancy rates in the City of Pittsburgh with some tenants paying more than what they would if they were located in Downtown. The vacancy rate is at about three percent now.
Since the BID started, many of the businesses have also seen an increase in business.
“And that’s what you want,” Ms. Muir said. “Businesses want to see a return on their investment and the OBID has been able to provide that value for their money.
“Because if someone is putting money into the collective pot, not just collectively should you succeed, but you have to see individual successes as well,” she added. “Lucky for us, we are seeing that.”
Ms. Muir has been there for ten years and has had only two predecessors. She said the OBID is still considered a young BID. The Pittsburgh Downtown Partnership is the only other BID in Pittsburgh.
She said that wasn’t a surprise considering most BIDs are located in large concentrated dense commercial areas, “because that’s where BIDS succeed.”
The Oakland BID has a board of 29 people, including some executives from the University of Pittsburgh and smaller business owners.
Ms. Muir used their 2012 budget as an example of where the money comes from and how it is spent.
Fifty-four percent of the budget came from the building assessments, another 30 percent came from the “eds and meds.”
“Pitt, UPMC and Carlow do with OBID what they do with the city, in addition to tax dollars they give us a contribution in lieu of assessments because they know there’s a lot of land I can’t assess. So they give us an annual contribution, that’s another 30 percent,” she said.
The remaining percentage is raised from government, foundations and sponsorships.
For every dollar property owners give in assessments, $1.80 is returned in services in the OBID.
The BID isn’t permitted to repeat a service that is offered by the city. They have to provide services that go above and beyond what the city provides. The reason given was property owners are already paying a base tax for those services.
Questioned why the OBID hires street cleaners when the city cleans the streets, Ms. Muir said the city cleans the streets not the sidewalks. Her five member crew cleans and power washes the sidewalks.
She said BIDs were formed when business districts were dying off because people were going to malls.
Adding that if anyone there was in a mall or a strip mall with one owner and a group of tennants they were basically in a BID by having to pay Common Area Maintenance (CAM) fees for cleaning, holiday promotions, etc.
“In a commercial district you have multiple owners, that’s what makes it more challenging. But that’s why they created this concept of business improvement districts to figure out how you can get everyone on board, contributing and receiving the same service for their benefit,” she said.
“It was designed after malls. The whole thing was built on how malls function.”