“BIDs have been around since the 1960s and the first one was in Canada,” Georgia Petropoulos Muir, executive director of the Oakland Business Improvement District, told members and guests of the South Side Chamber of Commerce at the November luncheon.
There are now more than 1,000 in existence in downtown centers throughout the United States.
“You need a couple of things for a BID to be successful,” Muir said. “First of all, you need a high, densely populated business district.”
She emphasized that she was talking about a Business Improvement District, which incorporates only commercial properties, as opposed to the Neighborhood Improvement District proposed for the South Side, which would have included residential properties.
The OBID works in the Fifth and Forbes corridor and includes properties owned by the University of Pittsburgh, UPMC, and Carlow University. Muir added that these institutions own commercial properties and businesses that pay taxes in the area. Commercial property owners, along with the universities and hospitals, are members of the BID.
“Our BID was formed in 1999 because there was a challenge in the ’90s. For those of you who might remember what Oakland looked like in the ’90s, it was a tad grimy. We were the bar destination at the time,” she said. “We had clubs. We had bars. We had a really strong nighttime scene, but we didn’t have a strong daytime scene, so that was a challenge.
“It wasn’t an attractive district. It definitely wasn’t clean, and it wasn’t a place where tenants bent over backwards to locate. As a property owner, it didn’t bode well that tenants didn’t want to rent space. In some parts of the business corridor, vacancy rates were as high as 12 percent.”
The nonprofit institutions played a significant role in starting the BID in the late ’90s, alongside commercial property owners.
The Oakland BID collects funds from stakeholders (property owners), and those funds go back into the commercial district for whatever the stakeholders decide they need.
“Most of the time, you’re going to hear ‘clean and safe,’” she said.
With “clean and safe” being the priority, the first step is eliminating litter, Muir explained.
OBID’s annual budget is about $500,000, with peak years reaching $700,000. “Clean and safe” takes up about half of that budget. However, they do not hire police officers.
“We work with police forces. There are actually nine police forces in the district, so we don’t feel a need to add another,” she said.
Marketing is another major focus. “We do a boatload of events,” Muir said. Their latest event, “Shop Small, Shop Oakland,” took place on Nov. 30.
She said Oakland now has one of the highest occupancy rates in the City of Pittsburgh, with some tenants paying more than they would in Downtown. The vacancy rate is now about 3 percent.
Since the BID’s formation, many businesses have reported increased revenue.
“And that’s what you want,” Muir said. “Businesses want to see a return on their investment, and OBID has been able to provide that value for their money.
“Because if someone is putting money into the collective pot, not only should the group succeed, but you should see individual success as well. Lucky for us, we are seeing that.”
Muir has led OBID for 10 years and is only its third director. She noted OBID is still considered a young BID. The Pittsburgh Downtown Partnership is the only other BID in the city.
That’s not surprising, she said, as BIDs are typically located in large, dense commercial areas—“because that’s where BIDs succeed.”
OBID has a 29-member board that includes executives from the University of Pittsburgh and small business owners.
Muir used the 2012 budget to illustrate how OBID is funded and how money is spent. Fifty-four percent came from building assessments, while another 30 percent came from “eds and meds.”
“Pitt, UPMC, and Carlow do with OBID what they do with the city. In addition to paying taxes, they give us a contribution in lieu of assessments because there’s a lot of land I can’t assess,” she said. “So they give us an annual contribution.”
The remaining funds come from government, foundations, and sponsorships.
“For every dollar property owners give in assessments, $1.80 is returned in services through OBID,” Muir said.
BIDs are not permitted to duplicate services already provided by the city. They must provide services above and beyond what the city offers, since property owners are already paying taxes for those base services.
When asked why OBID hires street cleaners when the city already does so, Muir clarified: the city cleans the streets, not the sidewalks. OBID’s five-person crew handles sidewalk cleaning and power washing.
She noted that BIDs emerged when business districts were struggling due to competition from malls.
“If you’re in a mall or strip mall with one owner and a group of tenants, you’re essentially in a BID by paying Common Area Maintenance (CAM) fees for cleaning, holiday promotions, etc.,” she said.
“In a commercial district, you have multiple owners. That’s what makes it more challenging. But that’s why BIDs were created—to get everyone on board, contributing and receiving the same service for their benefit.
“It was designed after malls. The whole thing was built on how malls function.”
