What is a BID? How is it funded? Who makes it work?

Why start a BID? For many reasons:

● A BID offers a sustainable and reliable revenue source to provide advocacy, supplemental services, promotions, events, and more.

● A BID allows local stakeholders to manage local priorities and decisions directly and provides a structure to respond quickly to the changing needs of the community.

● To create a cleaner, safer and more attractive business district

● To collectively market Downtown Poughkeepsie to expand the reach of businesses further than any one merchant could on his/her own

● To work to increase property values, improve sales, and decrease commercial vacancy rates

● To position our district to better compete with nearby retail and business centers and online shopping.

A Business Improvement District (BID) is a geographical area where local stakeholders oversee and fund the maintenance, improvement and promotion of their commercial district.

For more than 40 years, BIDs have been valuable and proven partners in ongoing initiatives of neighborhood revitalization and economic development across the country, making neighborhoods cleaner, safer and more vibrant. BIDs deliver supplemental services such as sanitation and maintenance, public safety and visitor services, marketing and promotional programs, capital improvements, and beautification for the area – all funded by a special assessment paid by property owners within the district.

There are more than 70 BIDs in New York City – the largest BID program in the country – and more than 100 across the state.

Property owners within the BID receive a special assessment on their tax bill each year in relation to their municipal tax liability.

Depending on the terms of the individual lease, business owners might help pay the assessment tax. Otherwise, there is no cost to commercial tenants and residents.

The City of Poughkeepsie assists with the collection of the special assessment, which in turn is distributed directly to the BID. The BID receives 100% of the money collected, and by law it is only disbursed to directly benefit the designated district.

Each BID is run by a non-for-profit organization led by a local Board of Directors, who are elected by members of the district.

All decision making related to the BID is made by this Board, which must include property owners, commercial tenants, residents, and publicly elected officials. The Board decides how the BIDs budget is spent and who is hired to execute BID initiatives.

Anyone who owns property in the district, owns a business in the district, or lives in the district is eligible to run for election to the BID board.

No. The BID is run by a board of directors comprised of property owners, commercial tenants, residents, and other stakeholders.

While representatives of City and County government will have seats on the board, they will not hold enough voting power to directly influence BID decisions.

The services offered by a BID are responsive to the needs of the community. Based on feedback from community members, the Downtown Poughkeepsie BID Steering Committee is focusing on four major areas of improvement - showcasing clean and beautiful streets, ensuring a safe and welcoming downtown, supporting small business, and creating a downtown identity.

Forming a BID DOES NOT reduce or replace the services provided by the City of Poughkeepsie in any way.

A BID is formed through an inclusive, grassroots process in which key areas of need are identified and support is gathered from property owners, business owners, and local community stakeholders. The community must initiate the creation of a BID. The effort can take a long time and involves the hard work of many local stakeholders.

We are fortunate to have many strong partners in this effort including the City of Poughkeepsie, Dutchess County Regional Chamber of Commerce, and others.

Together, we have crafted our proposed District Plan, which formally outlines everything about the proposed BID - district boundaries, areas of focus, assessment formulas, proposed budget, etc.

Our BID Steering Committee is committed to employ good planning, be accessible, and to demonstrate broad-based support for our proposed Plan by gathering signed “Statements of Support” from property owners, commercial tenants, and residents within the proposed boundaries.

BIDs create vibrant, clean, and safe districts. For commercial tenants, this can result in more people out on the streets and more customers. For residential tenants, this means a nicer community in which to live. Property owners within the BID frequently see property values rise.

Yes! BIDs receive the same services already supplied by the city -- by law, city services cannot be reduced because of the existence of a BID. Services provided by the BID are supplementary to the city’s services.

In fact, effective BIDs are often able to leverage additional funding for their districts for things like storefront improvements, streetscape improvements and more through city, state and even federal grants. A dedicated professional staff person who has the knowledge and expertise to identify and secure these funding sources is another major advantage of a BID.

The BID does not provide services that the city already provides. BIDs provide customized supplemental services and improvements that are beyond the city’s baseline services it provides to all citizens.

In some communities, services provided by city government are not robust enough to meet the needs of a successful commercial district. For a district that sees heavy foot traffic, daily trash pick-up might not be enough to ensure that customers have a high quality shopping experience, so BIDs employ people to continually keep the streets clean.

Additionally, BIDs offer the advantage of flexibility to control funds at a hyper-local level, and can respond quickly to changes in district needs, avoiding the red tape of city bureaucracy. Resources are allocated by the exact people who know local conditions best. For example, imagine a BID director sees that traffic in the district has heavily increased on the weekends, as a result of some external factor, perhaps a regular weekend concert series. If the current sanitation contract doesn’t cover the trash created by these additional consumers, with Board approval the Executive Director can can quickly allocate funding to pay for additional sanitation on the weekends.

The amount each property pays is dictated by a formula that is unique to each BID. Our steering committee has chosen to leverage the following assessment formula based off each property’s city tax liability (this number does not include school, county, or library taxes):

Each parcel will contribute a $250 base fee plus $125 for every $1,000 of annual city taxes with no property contributing more than 0.5% of the total district tax base each year. Do note that annual BID assessments are based on the property’s city tax liability for the prior tax year.

For example, if a property’s city tax levy was $3,000 in 2025, that property’s 2026 BID tax levy would be $625 ($250 base fee, plus $375 assessment)

For example, if you pay $3,000 per year in city municipal taxes, your annual contribution to the BID will be $625 ($250 base fee, plus $375 assessment).

The BID receives 100% of the money collected from the assessment. Unlike a city tax, a BID takes your assessment and brings it directly back to the community, so taxpayers can see exactly where their money goes. BIDs allow for hyper-local control of funding.

While an organization like a Merchant’s Association can be an effective model that supports the efforts of many commercial districts, they also tend to facilitate a “freeloader” phenomenon, as there is no way to enforce the financial participation of all stakeholders in a given district.

BID legislation states that all property owners must pay an assessment; there are no free riders. Thus, a BID offers a sustainable, equitable, and reliable source of funding to provide administration, supplemental services, promotions, and advocacy.

In addition to the assessment, BIDs typically do a lot of fundraising through everything from grant writing to events to sponsorship -- it is common to see BIDs leverage funding that would not have otherwise gone to support the commercial district. But perhaps the biggest benefit of a BID is that it offers a steady and regular flow of funds that allows for the hiring of a professional staff and sustain commercial revitalization programs and services.

An important component of the good work that BIDs do is advocacy and education. BIDs serve as a mouthpiece for small businesses, giving a voice to businesses who might not otherwise have the time, resources, or political clout to advocate for themselves with city government. BIDs advocate for the specific needs of the businesses within their districts, and advocate against policies that unnecessarily hurt small business.

BIDs also offer educational resources, giving businesses the information they need to be in compliance and avoid exorbitant fines from city regulatory agencies like Department of Health, Department of Buildings, and Department of Consumer Affairs. BIDs will let businesses know what their responsibilities are, and help businesses that are out of compliance re-adjust to avoid hefty fines.

A BID is a local nonprofit that is governed by local stakeholders and has the flexibility and on-the-ground knowledge to respond directly to the community. A BID can play an important role in determining what types of businesses come to the district, in direct response to the needs of the local community. Many BID directors liaise with commercial real estate companies to help fill vacancies with businesses that will serve the local population.

Additionally, with cleaner streets, collective marketing, frequent events, beautification initiatives, etc, a commercial corridor becomes a more desirable place to dine, shop and stroll, and thus attracts businesses to the neighborhood.