This is the first of a series of articles from different viewpoints on issues relating to BIDs that will normally appear in the BID SIG member-only area. Author Richard Guiney has been CEO of the central Dublin BID since 2008. It is one of the largest European BIDs, with some 2500 businesses involved. In July 2017, it secured approval for a further 5 year term. Richard is a Fellow of the Institute and participated in our 2016 Berlin Study Tour.

What is the future for BIDs?

A commentary by Richard Guiney FIPM, CEO DublinTown BID

Richard Guiney

Looking to the future is a risky business.  Few of us have  a crystal ball and those who do aren’t always taken seriously.  So, when asked what is the future for BIDs how does one answer? The truth is we cannot be certain but we can give an educated guess.

BIDs have functioned in the UK for almost 15 years now with over 250 active BIDs.  Many of have achieved significant yes margins on re-ballot.  Town centre management needs to be paid for and businesses appear willing to pay for it, so long as there is a pro-business slant.  So is this the winning formula? Perhaps it is, there is certainly mileage left in the concept but perhaps it is also worth standing back and assessing how the model can adapt to anticipated future trends.

The original debate around BIDs was whether or not this was double taxation and whether or not delegating town centre management to the business community was the most appropriate course of action.  However, I believe that we must now look to the challenges and opportunities facing town centres and assess how BIDs can be best made fit for purpose.

Town centres are poised for a period of great change.  We know that on line retail is putting bricks and mortar stores under pressure. This trend will only grow.  While UK retail sales reached pre-recession levels by February 2016, sales from bricks and mortar have continued flat-lining.  Across the developed world there is talk of over-supply of retail space while in Dublin prime retail rents are rising at rates below those of office and residential accommodation.  At a time of economic growth, there is talk that retail rents may have plateaued and may even fall.  In Dublin, as elsewhere, change of use applications from retail to restaurant/cafes use abound.  However, we need to accept that there is a ceiling on the sustainable number of such outlets.  Bottom line; the shape of the high street is in for real change which taken with the upcoming lease cliff in the UK, will pose serious challenges to our concept of the high street.

We all compete in the international market place, you can buy whatever you want from anywhere in the world with your mobile phone, and given an oversupply of retail space competition for customers will be crucial.  Destinations will have to become the best they can to maintain footfall and their retail offering.  In this scenario, towns with their diversity of offer are better placed than retail parks to survive but only if they are professionally managed.  There is increasing evidence that people will chose to both shop and socialise on the same trip. This is good news for town centres who are best placed to provide the requisite variety of offer.  Yet again a BID is the perfect vehicle to bring these diverse elements of the business community together thus enhancing the prospects of long term sustainability. 

Thus, we can envisage BIDs becoming increasingly engaged in strategic decision making, actively working with investors and the business community to get the right business mix and presentation, using tools such as Purple Flag and day time accreditation to meet and maintain appropriate standards.  In this scenario the operational elements of the clean, green and safe agenda are demoted to elements of the programme rather than core considerations, however, care will be required to ensure that BIDs remain relevant to the needs of those who pay for them.  Strategic plans without core on street activity will not get a BID through the renewal process.  BIDs will need clearer strategic thinkers, who are likely to require enhanced training and professional development.  Thus the sector will in all likelihood require increasing professionalisation.

The challenge for BID managers is to bring their retailers, both large and small, with them on this strategic journey.  This may be easier said than done when for some traders the long term horizon can equate to a one month window. Indeed, where income declines and profits are squeezed there will always be the temptation for some to cut a cost from the budget and the BID is a cost that may suffer.  BIDs must continue to win each ballot.  Once defeated a BID is gone for good.  BIDs will have to demonstrate to their membership that they are uniquely placed to place additional revenues in their tills.  The enhancement of appeal and footfall will be of critical importance while BIDs will have a role in placing business concerns at the heart of the decision making processes of all key city stakeholders.

A second major challenge will be to convince Local Authorities not to see BIDs as a funding mechanism that can shore up shrinking public sector budgets.  There is some evidence of BIDs being put under pressure to shore up shortfalls in Local Authority activities.  If this continues the BID model could quickly find itself in trouble.  Businesses are unlikely to pay on the double.  There is already evidence that some multi-location businesses are more inclined to adopt a ‘Vote No’ policy than 5 years ago. 

BIDs need to be seen as a vital strategic partner and one where the borders of responsibility are clear and respected.  A town’s social and economic issues will find their way to the high street but a BID does not have the power, responsibility or resources to solve every issue facing its town centre.  Nor should it.  Councils and elected officials must maintain those responsibilities but must have sufficient trust in their BID to understand and respect the commercial implications of transport, traffic and residential policies on the vibrancy of the town and rates base that businesses provide.  The BID model allows for that necessary communication.  There is time and space to catch our breath and assess the future.  BIDs have established themselves as part of the infrastructure and they now need to consider how that infrastructure provides a return on investment for the businesses who pay for it and the town residents who use it.