Volume 78, Number 1

April 2003

Bids Fare Well: The Democratic Accountability of Business Improvement Districts

Brian R. Hochleutner

A Business Improvement District, or BID, is a territorial subdivision within a municipality. Within a BID, local property and business owners pay district-specific assessments to fund local improvements such as enhanced security, sanitation, marketing, and infrastructure. Because BIDs are often managed by private entities controlled principally by local property or business owners, critics have charged that BIDs are undemocratic and insufficiently accountable. In this Note, Brian Hochleutner argues that BIDs are both democratic and accountable, at least to the BID’s most likely stakeholders and to the extent that those stakeholders are likely to be affected by the BID’s activities. As Hochleutner demonstrates, a BID’s small size and limited purpose work to limit accountability concerns generally. Further, a BID’s size and purpose also work with other aspects of the BID model—such as substantial oversight by local government officials and the BID’s own corporate governance mechanisms—to ensure that BIDs are not only particularly responsive to the interests of local property and business owners, but also sufficiently accountable to the interests of local residents. Hochleutner concludes that the BID model provides a way of governing sublocal commercial districts and downtown areas that is more fair and accountable to those actually governed than any obvious alternative.