A Business Improvement District (BID) is a public/private partnership in which property and business owners make a collective contribution to the maintenance, development and promotion of their commercial district. The contribution made is $2 per $1,000 of assessed value and does not change during the 5- year duration of the BID.
The idea for BIDs is modeled on the shared maintenance program of many suburban shopping centers. Malls are typically single properties, managed by one entity that sublets the retail space to multiple tenants. Tenants pay a common area maintenance (CAM) fee to underwrite services that enhance the appearance of common areas and provide cooperative advertising for the mall and its stores.
A BID works much in the same way. However, because the BID is set in an urban context, multiple property owners agree to the extra fee (assessment). Thus, stakeholders in a commercial district can align themselves in much the same way to improve their area.