What is a Business Improvement Area?
A Business Improvement Area (BIA) is a geographic area in a municipality. A BIA board of management is an organization set up to provide certain business promotion and improvement functions.
A BIA allows local business people and property owners to join together and, with the support of the municipality, organize, finance and carry out physical improvement and promote economic development in their district. The local municipality is the body responsible for establishing and approving the budget of the BIA.
In 1970 the province passed enabling legislation in response to a request by the business community in the Bloor and Jane Street area, City of Toronto, for special authority to establish the Bloor West Village BIA. Provisions for creating and operating a BIA are contained in section 220 of the Municipal Act.
-- “Business changes everyday. Adapting to the marketplace is important!”
In addition to Bloor West Village, there are now more than 230 BIAs in place across the province. They vary in size from less than 60 businesses and property owners to more than 2,000.
The BIA concept has also spread beyond the boundaries of Ontario. The concept has been adopted by more than 1,500 communities across the United States and in most provinces in Canada.
What does the BIA do?
The BIA has a two-fold mandate:
• to improve, beautify and maintain public lands and buildings within the BIA, beyond that which is provided by the municipality at large, and
• to promote the area as a business and shopping area.
In carrying out these responsibilities, BIAs have become involved in numerous activities:
Marketing: Understanding who area customers are, and creating effective promotions to retain and expand the customer base.
Business Recruitment: Working with property owners to ensure that available space is occupied, and that an optimum business and service mix is achieved and maintained.
Streetscape Improvement and Other Amenities: Providing for more customer-friendly lighting, signage, street furniture, planters, banners and sidewalk treatment.
Seasonal Decorations: Creating a unique and pleasant environment for customers and staff of all businesses, retail and non-retail, through the use of decorations that are appropriate to the season and holiday.
Special Events: Organizing and partnering in special events that highlight the unique attributes of the area and increase customer visits.
“A BIA does more than just clean up the neighborhood. The BIA is a mechanism to promote the local community and its special attributes and attractions to visitors and, just as importantly, to local residents.”
Who benefits from having a BIA?
A BIA can benefit more than just local retail businesses. All businesses in the area, whether professional, dining, entertainment, finance, or retail, may benefit from the improved local atmosphere and ambience that a successful BIA helps to create. It is the responsibility of each business to build upon the activities of the BIA and ensure that the customer receives best value in an efficient and courteous manner. An expanded customer base depends on the successful partnership between the activities of the association and individual businesses. “The ultimate goal of the BIA is to provide an environment that supports the role of the area as a place for shopping, dining, entertainment and financial and professional services.”
BIA initiated improvements and activities may lead to an increase in property values. Improvements help to create and sustain a more vibrant economic environment within the local area. This attracts both commercial and service sector businesses to the area which, in turn, may lead to an increased demand for retail and office space and a subsequent increase in property values.
Non-retailers also benefit:
BIA improvements and activities help to create a more vibrant community and a more prosperous local economic environment. A more vibrant community attracts visitors and retains local customers of all types of services – including dining, entertainment and professional services.
A BIA is a secure source of funding:
A secure source of funding is a significant benefit to having a BIA. Once the board of the BIA has prepared a budget and it has been approved, the municipality collects the money as a special levy on all industrial and commercial properties in the area. Funds are then transferred to the BIA organization to carry out its work.
increasing community interest and pride in the business area • ensuring on-going cooperation among the members of the business community
improving lines of communications between the business community and municipal council and staff • advocating membership interests and concerns through effective communications with both the municipality and other levels of government
increasing cost savings to the membership through improved integration of capital funding and promotional activities
“Together, as a BIA ,we have more resources and can accomplish much more than acting alone.”
How is the BIA managed?
The BIA is managed by a board of management which is composed of property owners and business operators and at least one member of council. The board is appointed by council for a three-year term. Usually, the nominees to the board are chosen by a vote of the general membership and the list is then sent to council for appointment. The board is a volunteer body who do not receive payment for their services to the BIA.
How is the BIA funded?
The board prepares annual budget estimates which must be submitted to municipal council. Generally, the board presents the budget to members at the annual general membership meeting for approval.
Once the budget is approved by council, the council adds a special tax levy on all industrial and commercial properties within the boundaries of the BIA. This levy is calculated proportionately for each property based on its assessed value. The levy is collected by the municipality and provided to the BIA.
The exact amount of the levy is ordinarily determined by dividing the property’s realty assessment by the total realty assessment of the commercial and industrial properties within the boundaries of the BIA and multiplying by the total annual BIA budget.
For example, if:
a property’s realty assessment is $100,000, and
the total realty assessment for all commercial and industrial properties within the BIA boundaries is $10,000,000, and
the annual BIA budget is $40,000, then
the BIA levy for the property is equal to:
($100,000/$10,000,000)X $40,000= $400
--“It takes a lot of effort and dedication to make a BIA work. But the results make it all worthwhile.”
Who is responsible for paying the BIA levy?
The property owner is responsible for paying the BIA levy to the municipality. However, the terms of the lease may allow the landlord to charge the BIA levy to the tenant.
What are the steps in establishing a BIA?
The request to designate a BIA usually originates with the local business community affected and is developed in consultation with municipal staff. A request to the municipal council to designate an area identifies the need for a BIA and sets out the boundaries for the proposed area. Some of the important steps in establishing a BIA are outlined below. 6 “Property owners and business leaders interested in establishing a BIA should plan carefully before proceeding. The key to success when trying to create a BIA is to have an action plan. Not only does it make the whole process easier but it will help immeasurably when asked tough questions about your proposal by other local business and property owners.”
Step 1 Establish the need
Step 2 Establish a steering committee
Step 3 Set out goals & objectives
Step 4 Prepare a preliminary budget proposal
Step 5 Determine proposed boundaries
Step 6 Communicate with interested parties
Step 7 Formalize request to the municipality
Step 8 Provide required notice to property/business owners
Step 9 Pass required by-law
Opportunities for objection: (This is a simplified summary and is not complete for all purposes: please refer to the legislation.)
Property owners and tenants are entitled to notification of the intent to pass a BIA by-law, and may object to the creation of the BIA. Objections meeting the requirements of the legislation (including being received by the municipality within certain time periods) may result in a referral of the proposed by-law to the Ontario Municipal Board (OMB), or defeat of the by-law.
Objections are made by way of petition.
Referral to the Ontario Municipal Board would be required if, within the first 30 days following the mailing of the notice, the municipality receives an objection signed by a person entitled to notice.
For the purpose of defeating the by-law, the municipality’s period for receiving sufficient objections is two months from the latest day of mailing of the notice by the municipality.
Council cannot pass a proposed BIA by-law if the municipality receives a petition signed by at least one-third of the persons entitled to notice who are responsible for at least one-third of the tax on property in the proposed BIA.
Conclusion about the BIA:
The establishment of a BIA can have clear advantages for the business community, the property owners and the municipality. For business people and property owners, it provides a key opportunity to develop a more attractive physical environment and a more successful business community. This may in turn enhance property values. For the municipality, it is an opportunity to strengthen the municipal tax base, halt the deterioration of the business area, and improve the municipality’s image.
To be effective, the BIA requires the support of all three partners; the business community, the property owners and the municipality. Business people will always encounter the problems of competition and a changing economic environment; property owners will always be challenged to maintain their real estate assets fully occupied, and municipalities will always face the issue of urban revitalization. The BIA provides a mechanism which allows all to co-operate in dealing with these interrelated issues.
Establishing a BIA can provide great rewards. It can lead to increased sales and profits, a more successful and active business environment, increased property values, a more attractive community, and a restored sense of civic pride. It is these rewards that have prompted more than 230 Ontario communities to establish their own BIA.
--“A truly successful BIA creates a spirit of cooperation that improves the local community not only for all businesses but for property owners and local residents as well.”
Where it all began:
Bloor West Village:
This is Bloor West Village, a prosperous and attractive retail shopping area in Toronto’s west end. Toronto is one of the most competitive retail markets in North America and potential sales are huge. However, the efficient transportation network allows shoppers to choose easily between large regional shopping malls, smaller plazas, a world-famous downtown shopping centre, big box stores, new power centres and many impressive shopping areas.
Bloor West Village is a roaring success. However, before the BIA was established, it had fallen on hard times. Vacant storefronts marked the streets, the area was rundown and unkempt, and property owners made little attempt to keep their buildings in good repair -in part because business was so bad they couldn’t afford it.
The fate of Bloor West Village at that time was shared by dozens of other urban shopping areas in cities and towns across Ontario. Time and the competition had passed it by. But the response of Bloor West Village to its problems provided a model that has been followed by more than 230 shopping areas in communities across Ontario, and more than 100 in other provinces. The beleaguered business people of Bloor West Village drew up the Business Improvement Area concept that is now part of the Municipal Act.
There were two fundamental causes of the economic decline of the Village, and they will be familiar to business people everywhere. The first was the opening of a new suburban shopping mall that drew customers from a wide area -including Bloor West. The second was changes in the transportation system - in this case the replacement of street cars by a subway - that made it easier for shoppers to travel to competing business districts.
That was in the late 1960s. However, the general theme, if not those specific details, will be familiar to business people of today. Malls continue to be major consumer draws and power centres and multi-screen cinemas have sprung up on transportation nodes around the built-up towns and cities. As a result, in many communities consumers have a multitude of close-by shopping districts to choose from. Where it all began: Bloor West Village
It is, therefore, not surprising that many areas have used the unique form of organization – the BIA – to address the deterioration of their areas, to retain and expand their customer base and to restore prosperity to their businesses.
In the case of Bloor West Village, the business people were determined to bring the customers back by making the area once again an attractive place to shop and do business and by promoting the new revitalized area to the community. However, the City, with a responsibility for providing services to all its communities, could not take on the additional costs.
For Alex Ling, the chairman of the Bloor West Village BIA, and a property owner and business operator, the concept was attractive: “We started out as a business association, going door-to door trying to collect money from the retailers for local improvements. The problem was always the same: there were only a couple of businesses in each block that would contribute, and nothing ever got done.”
So a group of business people from the area went to City Hall with an unusual proposition: if we can get a substantial majority of the businesses in our area to volunteer to pay a special levy, they asked, will the city collect the money as part of the business levy and turn it over to our association to be used for local improvements? The municipality agreed, and eventually the first BIA was formed.
That was in 1970. Through redevelopment of underutilized properties, Bloor West Village has grown by about 125 businesses, to about 400 in total. The BIA, which recently celebrated its 30th anniversary, continues to be the driving force in carrying out major street improvement work and promotions.