Successful BID will boost city centre

May 14 2008 by Richard Freeman-Wallace, The Journal

Richard Freeman-Wallace is head of property at Watson Burton LLP.

NEWCASTLE businesses are being asked to vote on a multi-million pound scheme that would see the city having one of the largest business improvement districts (BID) in the country. It would also see business rates rise for each company within the BID area.

A BID is a powerful partnership arrangement through which local authorities and the business community can work together to take forward schemes that benefit both business and residents. Newcastle United and Fenwick have already pledged their support.

The Newcastle City Council-chaired City Centre Partnership (CCP) has sent out information to local businesses. The partnership is looking to raise more than £7.5m over the next five years to bring about a successful BID. The fund may be topped up with contributions from the public sector, but it will be led by businesses.

The partnership expects the scheme to be up and running by early 2009 if it is approved by a vote this October.

The project says landlords benefit from BIDs through assisted capital value growth, increased rental values of property in the area, increased desirability of an area, more occupiers, increase in trade which affects turnover-based rents, better profile for properties away from main footfall areas, and positive links forged with the council. The key to a BID’s success is that it must fund services above those funded by the public sector, so that BIDs are not a means by which the local authority raises additional rate revenue to pay for services which should be funded from its normal income.

BIDs must also be: specific to a defined area and appropriate to its needs; approved by at least the majority of the payers in that area; compulsory on all payers once approved by the majority; and delivered through the mechanism of a public-private partnership.

The Newcastle BID is proposing a 1% levy which would be matched by contributions from regional agencies.

After the proposal is approved businesses identify the specific issues for attention and draw up a detailed plan that includes delivery guarantees, performance indicators and a management structure.

The type of services a BID could pay for could include more policing, installation of CCTV cameras and litter bins, removal of chewing gum and graffiti-free streets.

Major change in the city requires co-ordinated action and significant funds to have a chance of success.

The Newcastle BID could prove to be an effective mechanism for encouraging local landlords, businesses and retailers to find a common agenda for change.