A long-running campaign by British BIDs – the business improvement districts organisation – to be granted permission to levy a charge on property owners in their areas seems to be gaining ground.
Last Thursday (21 October), British BIDs met with representatives of the department for Communities & Local Government to discuss the issue. The meeting in London was closed, but sources present say the mood was constructive.
One attendee told Estates Gazette that the content of the discussions showed “continuing interest in the owner-levy concept from all concerned”.
BIDs have been campaigning for an official right to include property owners – as well as occupiers – since they were introduced in the UK around a decade ago. In the meantime, they have funded themselves by levying retail and other commercial occupiers through the business rates system, and seeking voluntary contributions from other stakeholders such as property owners.
At present, the only formal extension of the levy to include property owners is via the Crossrail Business Rate Supplement in London.
Not all of the UK’s 104 BIDs see a similar levy as essential, but a recent report found that more than a third (36%) are keen to start levying landlords.
The 2010 Nationwide BID Survey – carried out by British BIDs and the University of Ulster, and sponsored by London BID New West End Company – found that the vehicles need to find ways of securing more income than is now provided by their levies if they are to flourish as government funding becomes tighter.
NWEC, for example, was only able to embark on a raft of improvements – including the new diagonal pedestrian crossings at Oxford Circus, W1 – thanks to a combination of funding from local businesses and the London mayor.
With slim prospects of securing such public-sector funding in the future, firming up contributions from landlords looks increasingly important.
NWEC, which has voluntary agreements with its property owners, is hoping to formally introduce a ballot of landlords and add them to its levy-paying members within the next two years if CLG allows it.
The BID’s chairman, Dame Judith Mayhew, said NWEC was keen to officially include the property ballot to stop some landlords from “piggybacking” on those that do pay the levy.
Most of London’s largest landlords support the plan. Nigel Hughes, planning and environment director at Grosvenor, said: “We have always been in favour of the principle that landlords that benefit from the success of a BID should make a contribution.
“However, the principal difficulty is in assessing the amount that intermediate landlords should pay when there are multiple tenures involved. The quantum of the levy must be fairly related to the value of the leasehold or freehold interest.”
At the Crown Estate, David Shaw, head of its Regent Street portfolio, said: “We support BIDs in our core holdings where they are led by business, have clear objectives with which we agree, and where we can be actively involved.”
The Crown currently matches its retailers’ contributions to NWEC.
And landlord body the British Property Federation is keen for the industry as a whole to get financially involved in BIDs.
Chief executive Liz Peace said: “If localism is to succeed, then all stakeholders – including landlords – must have a say in how business improvement districts are run. We have long argued that property owners, who often have just as strong an interest as retailers in improving the environment around their property, should contribute to the BID where they feel it is appropriate, and are pleased that government is looking to take this forward.”
However, she also urged the government to think carefully about how BIDs would work with the local enterprise partnerships being introduced by the coalition government.
She said: “The last thing that is needed is for the work of BIDs to be duplicated by an extra layer of local bureaucracy.”
What are BIDs? A business improvement district is a defined area within which businesses pay an additional tax or fee which goes to fund improvements. BIDs provide services such as street cleaning, security, marketing and physical improvements to the public realm. The services provided by BIDs are supplemental to those already provided by the local authority. Most overseas BIDs charge property owners.
noella.piokivlehan@estatesgazette.com
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