CASE STUDY: DOWNTOWN CHARLOTTE AMALIE - BUSINESS IMPROVEMENT DISTRICT EXPLORATION

In September of 2017, two Category 5 hurricanes, Hurricane Irma and Hurricane Maria, struck the United States Virgin Islands (USVI) within a two-week period. On Charlotte Amalie, many homes were left uninhabitable, with rooftops destroyed and possessions lost. The hurricanes also damaged communications infrastructure and left the majority of the island without power, running water, and a reliable supply of food for many weeks. Many businesses were devastated, and economic development agencies were called upon to evaluate the damage and propose a set of solutions to rebuild a more resilient economy.

Residents, land owners and business owners in downtown Charlotte Amalie had previously raised frustrations with the city’s inadequate public services and the physical deterioration, issues that were exacerbated by repeated natural disasters. They raised specific concerns with public safety, a lack of parking and traffic congestion. In response, an organization currently known as the Downtown Revitalization Inc. (DRI) was incorporated to be an advocate for Charlotte Amalie, supporting resilience and faster recovery from disasters.

In 2017, DRI began discussions of a business improvement district (BID) for downtown Charlotte Amalie to its members and stakeholders. A BID is a geographical area where businesses and property owners oversee and fund the maintenance, improvement, and promotion of their commercial district.  In 2019, the International Economic Development Council (IEDC), with funding from the U.S. Economic Development Administration, partnered with DRI to provide technical assistance with a feasibility assessment for the proposed BID.

What is a BID?

A business improvement district is a defined area within which businesses are required to make additional payments in order to fund projects within the district's boundaries. There are various models on how BIDs are funded, but typically BID programs and services are funded by a special assessment billed to property owners, who pay differing prices, within a district. Assessments are unique to each BID and decided upon by the BID’s stakeholders.

BIDs are governed by a nonprofit organization with a Board of Directors. Elected by members in the district, the Board typically includes property owners, merchants, residents, and representatives of local elected office. The Board is in charge of making key decisions about programs and services, budget, goals, policies, and staffing.

Ultimately, each BID is unique in the services that they provide, but BIDs typically provide a range of services in their districts which includes street cleaning and maintenance, public safety and hospitality, marketing and events, capital improvements, beautification, advocacy, and business development. Importantly, BID services do not replace those provided by the local government; they merely supplement them.  

Through IEDC’s Economic Recovery Volunteer Program Laurel Brown assisted DRI from November to December 2019, with 5 days on-site in USVI towards the end of the year. Ms. Brown is a Harvard Law graduate and a former Wall Street attorney who has substantial experience in economic development, having spent the past decade driving economic revitalization for New York City. During the visit, she piloted various outreach activities including day and night tours, media interviews, meetings, and presentations of the BID concept to businesses.

Ms. Brown conducted a needs assessment for downtown Charlotte Amalie stakeholders through a market research survey. This allowed her to gain a solid grasp of their priorities and, coupled with her research of previous case studies of similar projects, she suggested best practices for the BID to DRI.

As the results of the needs assessment survey prioritized security, cleaning, and marketing, the project, which included a mock budget for the BID, was developed accordingly. The BID should be aimed to create a more secure environment at night, cleaner streets and more events for the community. This will be an attempt to improve the resident and tourist experience, which would in turn attract more consumers to the area.

The BID further hopes to capture an increase in revenue through additional nighttime foot traffic and sales as well as an increase in consumer spending during festivals. These effects could also produce side benefits such as increased rent revenues for property owners, who could lease out vacant stores as new businesses in the newly-energetic district. Along with these financial benefits, a BID could provide soft returns, giving members a stronger collective bargaining power when advocating for better infrastructure in downtown Charlotte Amalie.

These returns could all contribute an improved quality of life, with a safer and a more bustling downtown Charlotte Amalie.