Cities cannot always provide all of the services needed to foster a vibrant and successful commercial area. Their budgets are often strained leaving gaps in services that business owners need in order to grow. These service gaps are especially prevalent in Michigan cities, particularly Detroit where there can be a lack of street lighting, security and dangerously worn out roadways. This leaves it up to business owners to find creative ways to build the environment they need in order to run successful storefronts.

One tool available to business owners, associations and community organizations in Michigan is a Business Improvement Zone (BIZ).  A BIZ is a public body that is created by making a zone plan, petitioning the city for the adoption of that plan, and ending with a public vote by property owners within the zone. Though the process can be difficult the result is a board that runs the BIZ with limited interference from city governments.  

A BIZ can provide many services specified in the plan, these services include maintaining and creating parks, cleaning services, security services and the installation of lighting, to name a few.  The funding for the BIZ can come from grants, but mostly the funding is generated through property assessments laid out in the zone plan. Assessable property in this case is property within the zone’s boundaries that is any property besides a residence or condo as specified by Michigan law. BIZs approach assessment allocations differently. In Ann Arbor, part of the allocation is done through linear feet, an assessment based on the frontage of the property. This ensures that business owners pay the appropriate amount for services such as snow removal. Some other options are to use the assessed value or taxable value of the property. BIZs may also receive a bank loan for no more than 50% of the annual average assessment value after one year and only 25% if it is younger than one year.

One of the trickier parts of establishing a BIZ comes during the public vote. A property owner’s vote is weighted in proportion to the taxable value of their real property. The vote presents a hurdle for approving the BIZ, if a large property owner does not want to be apart of the zone and votes against the BIZ.  In this case, only enough support throughout the zone can counteract the “no” vote, or the zone plan must be redone so that the large property owner agrees.  

The benefit of pushing for a BIZ instead of a Business Improvement District or Principle Shopping District is that a BIZ creates an independent board that can make decisions and take actions without interference of the city. Many business associations and other community organizations prefer a BIZ because it allows for more control.  It also benefits the city because if the BIZ is sued, then the city is not liable.  The only involvement with the city is the collection of the assessments from property owners for a fee on behalf of the BIZ, however the BIZ can decide to help to lower that cost.    

A BIZ, once created, can be a great tool for business owners who want to improve the area and make it a more attractive and comfortable place for people to come.  Some examples of services BIZs provide include helping to pay for snow removal in downtown Ann Arbor and The Downtown Detroit Partnership paying for security and street cleaning. Though the process can be long and roadblocks may come up, a BIZ is worth considering when looking at economic development options for improving a commercial area.