Leeds BID Feasibility Study Detailed Report February 2014 Leeds Business Improvement District Feasibility Study 11 1.0 Introduction and Executive 2.0 Business Improvement Districts Summary Detailed report 2.0 Business Improvement Districts “The growth rate of BIDs continues to rise and the ballot success rate remains high at 84% overall, and 3.0 Leeds City Centre 91% for renewal ballots demonstrating that this is a tool that the business community is seeing real value 4.0 Consultation from. The scale and reach of BIDs is now significant with close to 70,000 businesses paying levies across 5.0 BID Boundary and Levy options the country and a total investment in BID areas 6.0 Recommendations and of almost £100 million annually”. – British BIDs 2013 Nationwide Survey next steps 7.0 Risks and issues Appendices History of BIDs 22 *BIDs around the world BIDs in the UK and Ireland . BIDs were first established in North America in the mid-1960s . In 2004 legislation for the creation of BIDs was . Since then more than 1,500 BIDs have been introduced in England, and later in Scotland, adopted in many countries around the world Wales and Ireland including: . Since then more than 170 BIDs have been created including those in London, Birmingham, – 450 United States Manchester and Edinburgh – 350 Canada – 185 Australia . Each BID proposal is different depending on – 140 New Zealand local needs and priorities, but usually focus on: – 260 Japan – 40 South Africa – Safety and security – 225 European countries – Cleaning and maintenance – Events and marketing – Retail and evening economy – Access and signage *source www.britishbids.info How BIDs work 33 A BID is defined by a geographical area where partners pull together to create a better place to live and work. Typically a BID would be elected for a 5 year term with a re-ballot at the end of that The levy The ballot . Funds are collected through a levy on the . A ballot of businesses - within the boundary and business rate which pays for additional eligible to pay the levy - will be held following a services, over and above those provided by the prescribed and time bound process public sector . For a BID to be approved the vote needs to . The funds collected through the levy, give local deliver a majority in favour both in terms of the organisations the power to raise funds locally to number of businesses and the rateable value of be spent locally, with the aim of improving their the business premises own business environment What a BID is not . The funding raised by a BID cannot be used to substitute the activity of the Council. The legislation calls for a baseline services agreement to be reached between the Council and the BID. Everything that the BID Company spends its levy fund upon must create additionality over and above that which the Council provides. A BID is a vehicle for creating economic prosperity and in its own right will not develop infrastructure programmes. However it can, as has been seen in other cities such as Newcastle, play a leading role in public / private sector partnerships to leverage funding to pump prime partnership developments and this is something we would recommend this BID engages in. The boundary 44 . A typical BID is likely to include between 300 – 600 businesses. However, there are examples where exceptions to this rule have proved successful eg Newcastle’s NE1 . The BID area should be defined during extensive consultation . The area should be compact enough to have a significant impact on the businesses within it but large enough to make it worthwhile for those involved Highlights of 2013 Nationwide BID Survey 55 . The highest concentration of BIDs remains on the 1% levy rate (41%), but 1.5% is gaining in popularity due to the higher incidence of BIDs in smaller locations (21%). Only 9% of BIDs are on a 2% levy rate. Some BIDs charge ‘variable rates’ and a number charge a flat fee below a certain threshold . Typical number of BID hereditaments is between 300 and 600, with four BIDs above 1,000 *source . Of the total BID industry only one BID has a term of less than three www.britishbids.info years . 78% of BIDs apply a threshold to the levy . 51% of BIDs provide a charity discount . 44% of the relevant sample who have a shopping centre in their area provide a shopping centre discount . The average annual levy income is £401,918 ranging between £22,400 and £2,814,000 . The total combined investment in BIDs amounts to £96,390,279 of direct and indirect additional income . 38% of the relevant sample have no collection charge . Of the total 272 ballots, 84% have been YES BIDs in other UK cities 6 BID No of Levy on RV Thresholds Levy income Additional Cost of levy hereditaments income collection Birmingham Broad 300 0.5% - 2% . Applies to businesses with a 375,000 32,000 0 Street rateable value of £10,000 or over BID 1 2005 – 2010 . Bars, clubs and casinos in the area BID 2 2010 - 2015 pay 2% . All other businesses within the main core area pay 1% . Business located in the outer core area pay 0.5% Retail Birmingham 420 1.0% . Applies to businesses with a 429,168 128,560 0 BID 1 2007 – 2012 rateable value of £10,000 or over BID 2 2012 - 2017 Erdington 308 unpublished 95,000 30,000 0 (Birmingham) BID 1 2007 – 2012 BID 2 2012 – 2017 Kings Heath 312 1.5% . Applies to all businesses 109,278 33,260 0 (Birmingham) BID 1 2008 – 2013 BID 2 2013 – 2018 Colmore Business 600 1.0% . Applies to businesses with a 795,000 544,600 0 District rateable value of £10,000 or over (Birmingham) . Capped at £25,000 BID 1 2009 – 2014 Sources: British BIDs 2012 Nationwide Survey, BID websites, Business Plans and Annual Reports BIDs in other UK cities 7 BID No of Levy on RV Thresholds Levy income Additional Cost of levy hereditaments income collection Birmingham 280 2.2% . Applies to businesses with a 330,000 120,000 0 Southside rateable value of £10,000 and over BID 1 2011 - 2016 Acocks Green Unpublished 2.5% . Minimum levy set at £240 and 105,000 0 (Birmingham) capped at £6,000 BID 1 2012 – 2017 Birmingham Unpublished 1.5% . Applies to businesses with a 110,000 Received 0 Northfield rateable value of £3,500 or over. lottery funding BID 1 2012 - 2017 Minimum levy set at £100 and for community capped at £10,000 project Sutton Coldfield Unpublished 1.5% . Applies to businesses with a 250,000 7,500 0 Town Centre rateable value of £7,500 or over BID 1 2012 - 2017 Jewellery Quarter Unpublished 2.0% . Applies to businesses with a 390,000 Feb 2014 - 0 (Birmingham) rateable value of £10,000 or over successful in BID 1 2012 – 2017 and capped at £10,000 first round of a potential £2m Townscape Heritage grant At the end of 2013, businesses in Soho, and Sparkbrook and Springfield voted in favour of becoming BIDs creating a further two BIDs in Birmingham. Sources: British BIDs 2012 Nationwide Survey, BID websites, Business Plans and Annual Reports BIDs in other UK cities 8 BID No of Levy on RV Thresholds Levy income Additional Cost of levy hereditaments income collection Liverpool City 1,431 1.2% . Applies to businesses with a 1,600,000 250,000 25,000 BID 1 2008 - 2013 combined with rateable value of £10,000 and over combined BID 2 2013 - 2018 Liverpool charge with Commercial Liverpool Commercial Liverpool 1,431 1.0% . Applies to businesses with a 600,000 25,000 Commercial combined with rateable value of £10,000 and over combined BID 1 2011 - 2016 Liverpool City charge with Liverpool City Manchester 380 1.0% - . Businesses within Manchester 965,000 Unpublished BID 1 2012 - 2017 1.25% Arndale subject to service charge 1% . Banks, Building Societies and Financial Services 1% . Other businesses 1.25% . Only applies to businesses with a rateable value of £50,000 or over and capped at £25,000 for combined businesses Sources: British BIDs 2012 Nationwide Survey, BID websites, Business Plans and Annual Reports BIDs in other UK cities 9 BID No of Levy on RV Thresholds Levy income Additional Cost of levy hereditaments income collection Newcastle 1,400 1% . Applies to businesses with a 1,950,000 9,200,000 0 BID 1 2009 – 2014 rateable value of £20,000 or over BID 2 2014 - 2019 In 2013 Nottingham 770 1.25% - . Retail business 1.25% 850,000 Over 110,000 Unpublished merged Nottingham 1.33% . Leisure businesses 1.33% other income Retail and Leisure . Only applies to businesses with a forecast over Business rateable value of £15,000 or over three-year Improvement and capped at £15,000 term District BIDs into one BID called It’s in Nottingham Merged BID 2013 - 2015 Sources: British BIDs 2012 Nationwide Survey, BID websites, Business Plans and Annual Reports BIDs in other UK cities 10 BID No of Levy on RV Thresholds Levy income Additional Cost of levy hereditaments income collection Better Bankside 560 1.4% . Applies to businesses with a 1,275,895 206,325 35,020 (London) rateable value of £15,000 and BID 1 2005 – 2010 above. Excludes British BID 2 2010 – 2015 Telecom and gas and electricity supply networks; advertising rights; communication stations; and car parks. Levy capped at £90,000 New West End 330 1% . Applies to businesses with a 2,841,042 1,398,061 25,915 Company (London) rateable of £250,000 and above.