CHAMBER BACKS THE BID

CHAMBER BACKS THE BID Retailers are being squeezed by structural shifts in retail trends worldwide. And Gibraltar is no exception.

With more and more retail sales being made online on the one hand and the continuous rise in costs of rent, rates, wages and import duty on the other, the margins once enjoyed by retailers are but a distant memory.

Commercial districts everywhere cannot be complacent as the competition is no longer from the shop up the road or even in the next town. It is increasingly the online e-tailers which are decimating shops in towns and cities the world over. Even well-funded multinational chains have succumbed to the threat. We need to collaborate and work together to invest in our town.

This is why the Chamber has decided to back the Business Improvement District (BID) project. The idea of creating a BID is for a group of retailers and local businesses in a defined area to generate more business and make it more attractive to visitors and customers.

The first Business Improvement District was started in Bloor Village, Toronto in 1970. Currently there are more than 300 of these projects operating across the UK and over 2,500 worldwide including in mainland Europe, USA, Africa and Asia. Most of these are underpinned by local legislation. If the decision is made to go ahead and create a BID in Gibraltar there would also need to be some changes to existing legislation in Gibraltar.

A BID allows local shops to enhance Gibraltar’s trading environment and make a real difference, attracting more shoppers and visitors and in the long term. In turn, more businesses will want to invest. Doing nothing is not an option and with government backing and potential investment, the time is right to capitalise on what we do well and be part of tackling the challenges that lie ahead The development path to establishing a BID is a well-trodden one, and a Task Group comprised of local retailers, businesses and landlords has now been set up to develop the BID further. The Task Group will be creating a business plan to set out how the BID will be implemented. Ideally the plan should be ready by late May/early June this year.

The plan will then be discussed among the various stakeholders and fine-tuned ahead of the final decision on whether to proceed with implementing the plan.

Retailers are being squeezed by structural shifts and Gibraltar is no exception.

This will be put to a vote among all stakeholders in late September/early October.

BIDs are funded and controlled directly by the businesses that pay for them. As a business, you choose which projects the BID fund is spent on. The government is also supportive of the BID and has pledged to match pound for pound all monies raised to run the BID. The annual budget is expected to raise around £250,000 from businesses in the BID area, and so when matched by the government there will be around half a million pounds to invest each year in making Main Street the best shopping experience in Gibraltar.

Mo Aswat from UK consultancy The Mosaic Partnership has been contracted to organise and oversee the BID project in Gibraltar. His task has been to pull all of the basic information together. This has meant talking to many local businesses along Main Street, liaising with Land Property Services and government departments. Mo has great experience of doing this having been involved in setting up more than 100 BIDs in the UK and elsewhere.

He has been surprised by the welcome which the BID proposal has received initially, although he does expect to encounter some resistance from some retailers. “Some resistance to change is normal and has happened at some point with most of the BIDs I have worked on,” he says.

He has also been impressed by the level of business owners who are keen to see the BID succeed. “In the UK it is not that usual to deal directly with the decision makers, but here in Gibraltar we have found that most of our contact has been with business owners and property owners rather than their agents. This has really helped us to explain the BID process to the various people involved more quickly. If the vote goes ahead later this year it should help us to implement the business plan more quickly.”

BIDs are process-driven and each stage needs to be completed before the next one can begin. This is the best way to build a solid proposal.

Describing some of the work which has been done so far, he said: “What we are trying to achieve is to make the best

use of Gibraltar’s available resources in the retail sector for benefit of visitors, customers as well as for local businesses.” Once the business plan has been finalised by the summer the next stage is to put the decision on whether to go ahead to a vote. All of the businesses which are in the BID area will be eligible to vote. If the majority vote to go ahead then the BID will be created and the business plan

FAQ: ALL ABOUT BIDS, WHAT YOU NEED TO KNOW

WHO PAYS FOR A BID?

Once projects and services have been agreed by businesses along with how they are going to be delivered and managed, they are costed up and set out in a detailed business plan. The cost to each business is worked out on a pro rata basis. ‘This is called the ‘BID LEVY’. Typically then, an independent and formal vote takes place on the agreed projects and services and if the majority vote YES then ALL within the BID area HAVE to pay. The BID levy is normally paid by the occupiers of a property. In addition, BIDs can draw in other voluntary funding, grants and ‘in kind’ contributions to supplement the BID levy

WHO CAN DEVELOP A BID?

A BID can normally be proposed by any business ratepayer, property owner, local authority or other key stakeholders with an interest in the BID Area.

HOW WILL THE BID BE MANAGED?

BIDs are normally controlled and managed by local businesses that are paying the levy, currently the majority of successful BIDs are delivered through will be implemented. If the majority of the businesses vote against then the BID simply does not proceed. The initial reaction has been positive and it is hoped that more local retailers will get on board and support the creation of the BID.

You can read more about the BID and see the BID area at www.mainstreetbid.com

A BID allows local shops to enhance Gibraltar’s trading environment

a Company Limited by Guarantee (not for profit). The BID Company would be responsible for the delivery of the BID projects and services and directly responsible to all businesses through a board elected from those businesses that pay the BID levy.

DOES THIS MEAN THE GOVERNMENT WILL STOP DELIVERING SERVICES?

BID money should only be used to carry out projects/services ADDITIONAL to those that public services have to provide. Prior to the BID Business Plan being produced the current services being delivered by all public agencies are benchmarked. This sets out the level or service provided at that point in time. The BID Company is then aware and can agree to provide additional resources to deliver a higher level of service over and above the benchmarked level if this is what businesses have identified.

WHAT MIGHT A BID DELIVER?

It’s up to you. BIDs can deliver any projects or services that are agreed by the businesses in the BID area and that are over and above anything that the Public Sector provides through your business rates. In most cases they include marketing and promotional activities, increasing safety and security for businesses and customers, attracting new businesses and investment, reducing costs and enhancing the customer experience. The important thing is that the BID is focused on delivering the operational and other projects as determined by detailed consultation with all businesses in the BID area.

WHY DO BUSINESSES SUPPORT BIDS?

A BID is a mechanism which allows businesses to raise a sum of money to manage and deliver projects that they have identified and believe will improve their trading environment, ultimately increasing trade for those businesses who are paying for the improvements.

HOW IS A BID MONITORED?

Like any good business plan, specific key performance indicators (KPI’s) are set and performance is monitored against the KPI’s by the BID board. The BID Company is answerable to the businesses that pay the BID levy, and will be required to monitor and inform its members on its progress towards the agreed KPI’s.

HOW DOES AN AREA BECOME A BID?

Normally a ‘BID Task Group’ is set up which is responsible for putting together a detailed business plan setting out the projects it aims to deliver on behalf of the businesses in the BID area. This is based on a detailed consultation process with businesses. The business plan will include the projects, cost, delivery guarantees, performance indicators and the management structure. A confidential postal vote is held, all the businesses that would pay the BID levy get a vote. To become a BID a majority of those that vote must be in favour by number and rateable value. A successful BID then has a mandate for a maximum of 5 years after which the BID would need to seek a reballot.