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by John Lambeth

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The Seven Steps to Forming a Property Business Improvement District

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A Property and Business Improvement District (PBID) is a tool available to property and business owners to improve a downtown or other commercial area. It is a partnership between the public and private sector, organized for the improvement of a specific geographic area.  PBIDs go by many names, including property improvement district, business improvement district, community benefit district, and downtown improvement district.  No matter what you call it, a PBID is a strong tool for property and business owners to provide important services to their commercial district. 

The International Downtown Association estimates that there are more than 1,500 BIDs throughout North America.  PBIDs have an impressive track record for improving downtown and other commercial areas. They have consistently reduced crime, enhanced cleanliness and image, and improved the business climate in cities throughout the country.

In California, PBIDs are formed pursuant to the Property and Business Improvement District Law of 1994 (whose primary author was John Lambeth, President of Civitas).  A PBID is a special benefit assessment district designed to raise funds within a specific geographic area. Funds are raised through a special assessment on real property, businesses, or a combination of both, and are used to provide supplemental services beyond those provided by the city. To form the district, property owners paying over 50% of the total assessment must sign petitions in support of the district.

A PBID is governed by a private non-profit corporation made up of a majority of property owners. All funds raised are returned to the private non-profit corporation governing the district, which is responsible for managing the district and delivering services. A Management District Plan spells out at a minimum the services to be provided and necessary improvements, establishes the boundaries, the budget, and the term of the district. PBIDs have a defined life, which initially cannot exceed five years pursuant to the PBID Law. Property owner support is required for renewal and the formation process must be followed.

PBID services may include, but are not limited to:
• Enhanced security services
• Enhanced maintenance services
• Marketing of the area and event production
• Small business training
• Parking management
• Business recruitment and retention
• Advocacy – one unified voice representing the area