A Critique of the BIA Proposal

Five years ago the Business Improvement Association of downtown Victoria was disbanded. This was by a vote of 2/3 of the property owners who also had to represent 2/3 of the total value of property downtown. Now we have a group of people who want to bring it back.

What were the problems with the old BIA, and what makes people think this one will be any different? The old one did not represent property or business owners, it's administration costs were over a third of the total budget, and each time it came up for renewal, it expanded the area being covered, and also raised it's levy. The final time they tried to include the hotels, and raise the rates significantly. It basically caused the people paying the bills to say enough.

With this bad taste in our mouths, I look on the new BIA proposal very sceptically. I would most definitely support a voluntary organization like the Chamber of Commerce that was focussed strictly on marketing downtown. By giving us the choice it would be forced to provide value for our dollars. An organization that is funded through taxation, but not directly responsible to voters is not going to be as responsive. That is fact.

As I look through the proposal, the first thing I note is that hotels will be levied at half the rate of retailers, office tenants and all other businesses. This is justified by saying that the room tax is given to Tourism Victoria, so they are already contributing. I look at that and say, no, that's good business. Hotels pay that because their market is not local, and they need to bring people in. What it looks like to me is that the hotels have the political muscle to say no, and they are being brought in early, with a sweetheart deal so they don't become the backbone of a movement to dump the BIA again. Their inclusion last time is what started the movement to dissolve the last BIA.

The proposed levy is .80¢ per 1000$ of assessed value, and .40¢ per 1000$ of assessed value for hotels. That adds up to a 2005 budget of 784,827$. Damn close to the figure that got them dropped the first time. They have boosted the levy by half again, which combined with the increases in assessed values in the last five years almost doubles the budget. What I find particularly interesting is that the budget on August 20th was 350,000, the budget on September 8-10th was 465,126 for the 'core area', and the budget by September 30th was over three quarters of a million dollars. At that rate it should be about three million by the end of the year...

Looking through both the information from the Open House of September 8-10th, and the information presented to council, I see a lot of activities outside the core competency of a BIA, which is marketing. As a point of fact it looks like it is basically a way of getting the 2020 vision some government funding.

What it makes me wonder is who benefits? Anytime I see a group of businessmen asking government to get involved in something, I think two things; first is "Are they insane? Governments never help business!", and the second is "What are they getting out of this?" Anybody who has a good theory, please let me know in the comments section below. Cheers!