8 Questions About BID Business

By now, you may have heard some discussion about the possible creation of a business improvement district (BID) in downtown Chattanooga. It’s actually a pretty simple tool with a lot of usefulness in our community, and we’re glad to offer a short set of frequently asked questions — and answers — about how it could work and what comes next.

What is a BID?
A Business Improvement District (BID) is a private sector funding mechanism designed to improve the environment of a business district with new services financed by a self-imposed and self-governed assessment. These services, such as enhanced safety, maintenance, and public art, among others, are provided exclusively within the district.

Does this mean that local government will give up their work inside the BID’s boundaries?
Absolutely not. Efforts undertaken by the BID and funded by its revenues will be an enhancement to — not a replacement for — those already provided by the City of Chattanooga. They work in the same way as a common area maintenance (CAM) agreement in shopping malls and office parks.

Will the creation of the BID create new taxes for the people of Chattanooga?
Nope. The BID revenues are self-imposed and self-governed fees, not unlike those gathered by a homeowners’ association, which are paid only by property owners within the district’s boundaries.

Where is the proposed BID in Chattanooga?
The BID will be a portion of Downtown Chattanooga that is bounded roughly by the Tennessee River to the north, US-27 to the west, 11th Street to the south, and Cherry Street/Georgia Avenue to the east. The boundary shall extend through the centerline of 11th Street, Cherry Street, Georgia Avenue, and any other thoroughfare along its exterior boundaries.

Do people support the BID?
Yes, but don’t take our word for it. According to a recent article in the Chattanooga Times Free Press: “[P]roperty owners within the proposed district who showed support for it. That support came from 60.51% of property owners representing 81.96% of the assessed value in the area of central Chattanooga, exceeding the 50% and 66.6% thresholds required by the state to bring the business improvement district to the council.”

Can people opt out of the BID?
The BID is a special assessment district, which means state law does not allow people to opt out. The Chattanooga City Council has the opportunity to change the boundaries of the district, which is the way that some people could be excluded. However, these boundaries cannot create “carve outs” or holes within the district’s boundaries, as everyone who benefits from the services provided by the special assessment district has to contribute.

Can this special assessment district be established any other way?No. State law clearly defines this type of district and how it is different from homeowner associations and other types of organizations that rely on self-imposed fees. Establishing a BID has a clear set of responsibilities to the property owners — and the property owners have a responsibility to support the BID.

Is the City liable for the actions or inactions of the BID staff, board, etc?
No. The BID is a separate legal entity.

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