Bradford BID Feasibility Study

Feasibility Study Report

BRADFORD BID FEASIBILITY STUDY

bradford_bid BradfordBID bradfordbid.co.uk

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Feasibility Study Report

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Feasibility Study Report

EXECUTIVE SUMMARY

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POSSIBLE PROJECTS The principal projects determined by the results of the survey will focus on aspects of the following key issues

Earlier this year, Heartflood were commissioned to undertake a feasibility study into the possibility of introducing a Business Improvement District (BID) into Bradford city centre. The study began in July 2017 and culminates in the release of this summary report in November 2017.

Responses were received from a comprehensive sample of 203 businesses, representing approximately 35% of those within a defined Bradford city centre area and covering the retail, leisure, office and service sectors. With 70% of those completing the survey in favour of a BID, we believe that there is an overwhelming demand across the entire commercial offer in the city centre to move towards the development of a BID. From the responses, we therefore recommend that Bradford should move towards detailed consultation ,given that 70% of the sample are supportive of the proposals, we believe that there is more than sufficient demand for the City to move on to the next phase of BID development – namely detailed consultation and development of a draft business plan built around the following recommendations: •A timetable to be adopted for businesses to vote on a BID for Bradford based on a detailed, fully costed business plan in September/October 2018, with a view to a five-year BID term starting in December 2018 he proposed boundary of the BID to cover the whole of the •T City Centre, including the shopping centres (Kirkgate and Broadway)

01 DELIVER A STRATEGY TO REDUCE THE NUMBER OF EMPTY SHOPS

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•A n exemption level is to be set at £12,000 – meaning that those properties with a Rateable Value of less than £12,000 would not be liable to pay the BID levy, although they are situated within the BID boundary and will gain some benefits because of this.

203

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70%

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Dec ‘18

10

1.25% Proposed levy fee

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£12,000 Exemption level

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13

Rateable Value

DAYTIME WARDENS/HOSTS/ AMBASSADORS

EVENING ECONOMY PROJECTS, POSSIBLY TO GAIN NATIONAL ACCREDITATION

MARKETING AND PROMOTION TO PROJECT THE CITY TO A FAR WIDER AUDIENCE

06 STREET CLEANSING & WASHING, INCLUDING CHEWING GUM REMOVAL

SECURITY IMPROVEMENTS

BID launch date

04

05

07

Businesses in favour of a BID

03 PROJECTS TO ENCOURAGE INVESTMENT

MORE MAJOR EVENTS OR FESTIVALS

Businesses surveyed

• 1.25% is the most appropriate rate of levy to apply to the BID • A reduction of 25% of the BID levy to be proposed for premises within managed centres which already pay a service charge - this is because the service charge they pay already includes some of the benefits that the BID intends to deliver

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GREATER LOBBYING, REPRESENTATION AND CHAMPIONING OF THE CITY

EVENING WARDENS/ MARSHALS/ PASTORS

IMPROVEMENTS TO PAVING, LANDSCAPING AND STREET FURNITURE

IMPROVEMENTS TO PROBLEM AREAS, GRAFFITI OR FLY-TIPPING REMOVAL

09 NEW SEASONAL EVENTS

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STREET MARKETS

CITY CENTRE STREET ENTERTAINMENT

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Feasibility Study Report

Feasibility Study Report

BUSINESS IMPROVEMENT DISTRICTS Since the introduction of Business Improvement District legislation in 2004, more than 280 Business Improvement Districts have been created across the UK and the Republic of Ireland. In Yorkshire the most significant is Leeds BID, although one has been created and is working well in Keighley. The majority of BIDs focus upon town and city centres, although they are not confined to these areas; several have been formed in out of town industrial or commercial areas.

BIDs operate by raising a small levy to pay for additional services to help boost the performance of participating businesses (usually a small percentage of National NonDomestic or Business Rateable Values) with the actual levy percentage varying depending on the area in question and the cost of the activities defined in the Business Plan. In most towns and cities with a BID, businesses pay an annual levy of between 1% and 1.5% of the actual Rateable Value of their business premises.

Any BID business plan is subject to a vote of potential levy payers and the voting papers are sent to either the tenant of the business or to the landlord (in the case of vacant units) inside the defined boundary that forms the BID. This report identifies what we consider to be the most appropriate potential boundary for the Bradford City Centre BID.

For any BID to be successful, there needs to be a majority of positive votes from the total number of votes cast AND these positive votes must also form the majority of the total aggregated Rateable Values of all the votes cast.

It is always the intention of a BID to create projects and activities within a town or city over and above those which already happen.

A BID is not, therefore, a mechanism to allow any public or private sector body to cease providing existing, established activities or divest the cost of providing them.

EXISTING BIDS IN THE AREA

Levy Incone

£ 16 2 , 0 0 0

It is always the intention of a BID to create projects and activities within a town or city over and above those which already happen.

Levy Incone

Skipton

£286,0 0 0

Est.

Keighley

2 014

L evy Inco n e

£790,0 0 0

Otley

York

Est.

2 014

Est.

2 015

Est.

2 015

Levy Incone

£2,0 0 0,0 0 0

Leeds

The maximum term covered by a BID business plan is five years and the continuation of any BID beyond this initial term is reliant on the generation of a new business plan and a renewal ballot of the businesses within the BID area.

BIDs generally involve the creation of a Company Limited by Guarantee, which limits the financial liability of any Company Director to £1. A Board of between 12-16 Company Directors is usually formed from BID levy paying organisations to create a representative and business-led group of Directors to oversee the financial, managerial and operational arrangements for the BID. The Chairman of the Board is invariably a local business person.

£70,0 0 0

Levy Incone

Est.

2 015

Levy Incone

L evy In co n e

£ 4 2 7, 0 0 0

£282,0 0 0

Halifax

Wakefield

Est. Levy Incone

Est .

2 017

2 017

£970,0 0 0

Manchester Est.

2 013

30 miles

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Feasibility Study Report

BRADFORD CITY CENTRE OVERVIEW

THE BUSINESS SURVEY

Bradford is a major metropolitan urban centre, which sits strategically within the major motorway network that serves West Yorkshire, including the principal M62 link across the Pennines into Lancashire. It is well served by rail and has a major international airport within easy driving distance of the City Centre. The City Centre principally serves the day to day convenience needs of a relatively local catchment with little or no major appeal beyond this, although the recent Broadway and Sunbridge Wells developments have added a wide range of retail & leisure operators, widening the pull of the City Centre beyond its usual limited catchment population.

The City Centre contains a range of ancillary services, including a number of banks, building societies, property agents, motor dealerships and professional services. There are also many churches, mosques and other places of worship, as well as a post office, University, health centres, cinemas and theatres, a library, a police station and a number of wellestablished facilities for a culturally diverse community.

The core of Bradford city centre with our initial BID boundary contains 585 business rate payers with a defined total Rateable Value of £37,413,100. These premises range from small specialist independent companies to significant national multiple operators. Feedback was sought from a strong, representative sample of all sizes and types of businesses within our defined boundary as to their attitude towards a Business Improvement District. It is important to note that while a tentative boundary line has been drawn to include the bulk of the City Centre as commonly recognised, this boundary will be ‘tested’ to ensure it is the correct delineation of the BID area and ultimately it may well change to reflect the different responses we record from businesses about the BID.

585

Businesses rate payers

£37.4 Million

FA C T S A B O U T B R A D F O R D

Bradford

4

th

largest metropolitan district

5

th

Economy set to increase by

25%

over the next ten years

largest city in the UK

(Source: 2011 census data)

(in terms of population) in England

£9.5bn economy

Total Rateable Value

the youngest city in Europe

17,000 businesses

& more FTSE 100 companies than any other north of England city

The feedback was captured in the form of an online, structured questionnaire which was carefully designed to disseminate a number of key pieces of information from the business community.

The online survey ran from July to the end of October to give adequate time for local businesses to engage with it and give their considered opinions.

It was supplemented by hard copies that were distributed to various businesses including members of the West & North Yorkshire Chamber of Commerce. The survey was promoted during two open business meetings which were attended by over 30 businesses and ultimately the entire survey process yielded a total of 203 responses.

• 50% of respondents were from independent businesses, with 50 % being from multiple, franchise or other operators • Business satisfaction about how well Bradford is currently performing was generally low, with the following levels of dissatisfaction being expressed about specific aspects of the City’s offer: Perceived performance of aspects of the City Centre “Do you think that Bradford City Centre achieves its potential as a…”

Percentage of responders who indicated that City Centre performance was negative or neutral compared with a positive take

Retail centre

92%

Professional services hub

93%

Place to dine out

91%

Place to spend leisure time

94%

Day visits

89%

Weekend break location

97%

71% of businesses thought that their trading area should be included within the potential BID boundary

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Feasibility Study Report

The explanations given as to why businesses feel that Bradford under-performs were given as:

usinesses prioritised how they felt BID income B should be spent as follows:

81%

The image of Bradford locally and nationally

71%

High levels or perceptions of crime

70%

Insufficient range of shops

67%

Quality of the shopping environment around the shops

Daytime wardens/hosts/ambassadors

The main competitor locations were considered to be:

91% Leeds Online retail

21%

42% 97%

Bradford's out of town retail parks

12% 31%

19%

Halifax Huddersfield

11%

49%

Other areas of Yorkshire not listed here Keighley

8%

8%

42% 42% 41%

New seasonal events, including more Christmas activities

49%

Too few customers

Wakefield Shipley Other areas of Bradford

43%

Greater lobbying, representation and championing of the City

50%

Insufficient promotion and marketing of the total city offer

49%

Security improvements, possibly to include more policing

52%

Lack of places to eat or drink

50%

Improvements to problem areas, such as graffiti or fly-tipping removal

52%

Quality of the leisure offer

56%

Marketing and promotion to project the City to a far wider audience

Street cleansing & street washing, to include chewing gum removal

59%

The appearance of retail units

72%

Projects to encourage investment into Bradford

More major town centre events or festivals

63%

Street begging

78%

Improving the appearance of empty shops

56% of respondents felt that Bradford would benefit quite a lot or hugely from the additional spend a BID would bring, with 35% indicating that there would be some benefit and just 9% considering that there would be no benefit

• 70% were in favour of the BID concept being tested by ballot, 22% were undecided and 8% were against the idea of balloting • When asked how much they would be prepared to pay as a levy, 58% agreed with 1% of Rateable Value, 25% nominated 1.25% and 17% proposed paying up to 1.5% of Rateable Value • 71% of businesses surveyed felt that they should be included within the potential BID area, while 22% were undecided and 7% indicated that they should remain outside a BID boundary

38%

• There was a clear mandate for all types of business to be included, with 74% of the survey respondents supporting this - only 21% indicated that they wanted retail & leisure only and just 5% felt that retail only was the best option • Businesses are relatively confident about the future, with 35% predicting their turnover would rise over the next 6-12 months, 46% considering that it would remain static and just 19% who anticipate a reduction in turnover

Throughout the survey period, we monitored responses to ensure that they formed a representative sample of the business community within the area identified in terms of the size, type, sector and geographical spread of respondents.

We are satisfied that the survey responses are a representative initial sample of the Bradford City Centre Business Community and, with 70 % in favour, the results show ample support for pursuing a BID.

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Our recommended boundary would cover approximately 585 business listings and we recommend that University further consideration be given to the inclusion of both the Little Germany area and the various phases of Bradford of the Forster Square Retail Park. For the purposes of income calculation, we have included the Little ad Germany area and listed the Forster Square areas separately.

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We have based our income calculations for the estimated BID income on the above parameters and are confident that it offers sufficient common interest across the wider business community that the proposed projects would impact positively on all eligible voters.

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Given that approximately 71% of respondents indicated that they considered a BID should occupy their area of the City Centre, the following geographical area is considered to be the prime plan for the proposed BID area.

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Feasibility Study Report

LEVY OPTIONS FOR THE BID AREA We have chosen to model scenarios in the range of 1% to 1.75% as these rates will give sufficient funding to achieve a fairly ambitious portfolio of projects, as hinted at by the survey returns.

In Bradford’s case, our detailed examination of the RV listing suggests that approximately 1,350 businesses in the proposed area would be under the suggested threshold and their annual BID levy would have generated approximately £75,000 per year. We anticipate that some of this number may voluntarily contribute towards any BID - setting a threshold does not exclude any business from playing an active part in a BID if the owners/ occupiers choose to do so.

Reduced levy (%)

Total levy income

1

0.75

£335,475

1.05

0.7875

£352,249

1.1

0.825

£369,023

1.15

0.8625

£385,796

1.2

0.9

£402,570

1.25

0.9375

£419,344

1.3

0.975

£436,118

1.35

1.0125

£452,891

1.4

1.05

£469,665

1.45

1.0875

£486,439

1.5

1.125

£503,213

1.55

1.1625

£519,986

1.6

1.2

£536,760

1.65

1.2375

£553,534

1.7

1.275

£570,308

1.75

1.3125

£587,081

C O M PA R I S O N W I T H E S TA B L I S H E D B I D S

A BID generally takes the form of a five-year proposal, although a very few have been set up for shorter periods.

We suggest that a BID for Bradford be considered for a fiveyear period to allow the maximum amount of time for the BID projects to become accepted, actioned and generate positive results.

The following BIDs are considered to represent a good comparable sample range to Bradford in terms of geographical location, BID levy percentage and overall income.

BIDs are run as non-profit making organisations and so the budget within any BID business plan will propose income being equal to expenditure over the life of the BID period. Furthermore, BIDs operate as very lean organisations, with typically no more than 20% of expenditure being used for operating costs, meaning that the majority of BID expenditure is on improvement projects.

The latest ratings information has been applied in order to determine a range of possible levies and corresponding incomes per year and these, as well as a total income figure for the five-year period, are shown as follows:

Standard levy (%)

FINANCIAL INCOME MODELLING

At this preliminary stage, the recommended levy is considered to offer the best balance of income with a manageable size of BID. Specifically, our recommendation is a levy rate of 1.25%, together with our recommendations that an exemption be applied to any premises with a rateable value below £12,000 and the suggestion that levy reduction of 25% is applied to tenants of managed centres who pay a service charge.

We would, however, emphasise that all of these recommendations should be subject to further testing and refinement through subsequent detailed business consultation.

To succeed in a BID ballot, a majority of total votes and total Rateable Value needs to be achieved and we consider that our recommendations would ensure a good mix of small and large businesses in the BID area.

Bradford faces the challenge of a combined Rateable Value of the City Centre yielding a very modest sum if a 1% levy is applied. It is therefore very important that the levy chosen for Bradford generates sufficient income to deliver the major improvements which have been identified.

The bulk of BID income is derived from the Business Levy and it is prudent to set an anticipated collection rate of between 95%-98% depending on the view of the Local Billing Authority. Although, BIDs have been proven to generate significant additional income in the form of grants, sponsorships, voluntary business contributions and trading activities as they develop, with the likelihood that a BID would generate an additional 10-20% of income by the end of its first five-year term. Patently, the more additional income that can be generated over and above the levy, the better and more effective the additional activity programme can be and the better the return on investment provided to each levy payer.

City

RV Levy %

Levy Payers

Indicative Levy Income

Halifax

1.75

654

427,000

Manchester

1.4

400

970,000

Leeds

1.25

1,090

2,000,000

Wakefield

1.25

482

282,000

Liverpool

1.2

890

720,000

Sheffield

1.0

500

847,000

York

1.0

900

790,000

Hull

1.0

1,148

460,000

Bradford (proposed)

1.25

585

419,344

Average of the above

1.23

739

768,372

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BIDs are run as non-profit making organisations and so the budget within any BID business plan will propose income being equal to expenditure over the life of the BID period.

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L I K E LY V OT I N G PAT T E R N S

NEXT STEPS

RISKS

Whilst it is difficult to anticipate the voting patterns of all the businesses in the likely BID area, the survey suggests that there is considerable support for a BID in Bradford, with 70% of businesses responding positively to this survey question.

Our experience is that the timescale and workload for a BID proposal is approximately 9-12 months.

The basic inherent risk in any BID process is that the ballot is rejected, by failing to gain the required majority of votes cast or failing to gain the majority of the aggregate Rateable Value of votes cast.

In addition, Heartflood have extensive recent experience of leading successful BID projects and so are aware of the contacts and likely voting patterns for a significant number of the national multiple businesses, with a number of the known supportive organisations trading in Bradford.

The result of this survey combined with the presence of a number of known positive BID voters suggests the strong likelihood that a BID could be created here within the next year.

The vast majority of BID ballots have been successful.

Nov 17

Nov 17 - Mar 18

April 2018

Decision taken to develop a BID proposal

Business liaison and consultation on proposed business plan

Notification to Secretary of State and Local Authority of intention to hold a ballot

1

2

3

July 18

June 18

June 18

Notice of Ballot issued

Launch of business plan

Provision of a definitive business plan to the Local Authority

6

5

4

The vast majority of BID ballots have been successful. Certainly, all that Heartflood have recently been involved with (in Cheltenham, Hastings, Hereford, Stratford upon Avon and Worcester) have been successful, although the Client should be aware that the risk always exists of a BID ballot being unsuccessful. This can result in:

• Zero return on the significant investment of time, effort, energy and money in developing the BID proposal

• Loss of reputation and credibility of the organisation(s) proposing and championing the BID process

• An informal requirement for a cooling-off period

Sept 18 Ballot papers issued

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Formal announcement of the results of the Ballot

of at least 2-3 years before any reattempt is made to develop a BID within the City An additional risk is the potential for the final ballot result to be challenged through a statutory process that is contained within the legislation.

Voting irregularities or lack of appropriate consultation can generate a Secretary of State appeal. To our knowledge, no BID has been quashed through this appeals process but it is very debilitating, costly and time consuming to fight and, of course erodes the five-year period of BID operation that can have lasting, long-term impact on BID achievement and subsequent success.

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R E C O M M E N D AT I O N S

Having considered the survey returns and mulled over the outcome in the light of our extensive, combined experience, our key recommendations are as follows: • Bradford moves immediately towards detailed consultation and ultimately the production of a draft BID business plan • A timescale is adopted with a view to a BID ballot taking place in Bradford in Autumn 2018 and a BID operating from December 2018, subject to a positive vote • Further extensive consultation is carried out with the City Centre Business Community around the following outline proposals: a) The BID boundary to cover the designated area defined on page 12

e) Priority projects be drawn up into a draft business plan should focus on:

These recommendations would result in the following:

1. Deliver a strategy to reduce the number of empty shops

o 585 eligible business premises being part of a BID

2. Projects to encourage investment into Bradford

oA nnual BID Levy income of the order of £419,344

3. Marketing and promotion to project the City to a far wider audience

oT otal BID over a five-year BID term will be close to £2,096,720

4. More major city centre events or festivals

5. Street cleansing & street washing, to include chewing gum removal

6. Improvements to problem areas, such as graffiti or fly-tipping removal

7. Security improvements, possibly to include more policing

8. Greater lobbying, representation and championing of the City

9. New seasonal events, including more Christmas activities

10. Daytime wardens/hosts/ambassadors

11. Evening wardens/marshals/pastors

12. Street markets

13. Evening economy projects, possibly to gain national accreditation

14. Physical improvements to paving, landscaping and street furniture

15. City centre street entertainment

b) A 1.25% BID levy being proposed c) A reduced rate of 1% to be proposed for premises within managed centres who already pay a service charge d) A BID term to be proposed to cover the maximum period of five years

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