Placemaking and Revitalization through Business and Tourism Improvement Districts in Albania

Abstract

As a form of a public-private partnership with local authorities, the business improvement district (BID) is created when most businesses or business property owners agree through balloting to manage a delimited commercial area with prior authorization by the local authority. The district is managed through a non-profit organization that provides additional public services such as security, maintenance, infrastructure improvement, and marketing, to improve decaying commercial and residential areas. BIDs have been praised as engines for urban development, filling the need gap between the public and private sector by providing entrepreneurial local public management and augmented public services for socioeconomic revitalization. The business improvement districts (BIDs) and similar forms of a public-private partnership, as a new mechanism for urban renewal and economic development, have emerged in North America five decades ago and quickly adopted in many cities worldwide. Since 2011, the model has been applied in 8 districts in Albania, contributing to improved business life, infrastructure improvements, and enhanced general public services. This time is considered long enough to offer insights regarding their evolution and transformative effects. This study aims at exploring the adaptation of the business improvement district (BID) model in urban areas in Albania and, at the same time, point out its characteristics, operational and functional activities, accountability, and contribution to business development and area revitalization. The methodology used in this study adopts a qualitative method, including a case study approach to data gathering Primary data sources include semi-structured interviews with BID association members, administrators, and consultants in Albania, businesses, local government officials, and lawyers. This study will contribute to a more robust contextual understanding of the establishment and effectiveness of BIDs in developing economies The findings presented demonstrate BID’s transformative role for area regeneration, economic and social development. Furthermore, this study provides additional insights regarding the effects of development organizations’ involvement in this public-private partnership model for area regeneration. The results have important implications for Albania’s public and development policies and provide practical lessons for practitioners in these fields. Furthermore, it contributes to the international literature on BIDs, including evidence of this model applied in a developing economy. Corresponding author: Ermira Repaj Email address for the corresponding author: e.repaj@aadf.org The first submission received: 14th December 2020 Revised submission received: 14th April 2021 Accepted: 26th April 2021 International Journal of Business and Economic Development, Vol. 9 Number 1 May 2021 www.ijbed.org A Journal of the Centre for Business & Economic Research (CBER) 80 Introduction The BID (Business Improvement District) and TID (Tourism Improvement District) are relatively new international models of public management, locally embedded through securing private capital to accommodate local specific demand related to area renewal (Peyroux et al., 2012). Historical records show that the first model of a Business Development Zone was implemented in Toronto in 1970 to fund a commercial district’s renewal. In the following decades, the model has expanded to several cities in Canada and other countries such as the United States (Mitchell, 1999), South Africa (Didier et al., 2012), Germany (Michel and Stein, 2014), the United Kingdom (Cook, 2009) and lately Denmark (Richner and Olesen, 2018) and Sweden (Valli and Hammami, 2020) as a new mechanism of urban revitalization and social-economic development (Billings and Leland, 2009; Gopal-Agge and Hoyt, 2007; Hoyt, 2003). The model is almost the same across the world; a flexible form of governance that allows its participants to autonomously operate and craft solutions to improve their lives in a single area. Thus, creating a more attractive destination offer for tourism, leisure, shopping, living, doing business. Being entirely local, the model helps prioritize initiatives and solutions that directly affect the community. The collective contribution of the businesses in the BID/TID area allows for better services in the area such as sanitation, security, and marketing. The BID model’s long-term impact is creating sustainable mechanisms that improve the commercial value of the area by enhancing its assets and marketing it to the general local public and visitors. Sustainable impact of the model is ensured by actively involving the local community, businesses, and the Municipality as actors of development. BIDs have been operating in Albania since 2011, as an initiative of the AlbanianAmerican Development Foundation. Their immediate impact is reflected in the daily turnover of businesses, higher employment rates, increased number of visitors, increased property value and new business investments. This paper focuses on the application of this international model in the Albanian context and its transformative role for area renewal, economic and social development. The article is divided into five sections. First, the BID model definition and origin will be discussed through a literature review. Second, it analyses the implementation of the BID model across Albania. Third, it examines in further details the characteristics of the Albanian model. Finally, it discusses some relevant BID projects’ outcomes and impact indicators prior to summarizing this article’s conclusions, limitations, and directions for further research. Introduction to BID concept – A literature review There is no universal definition for a business improvement district (Becker et al., 2011) because the very nature of a BID is to be adaptive and flexible to serve each district as needed by stakeholders (Hoyt, 2003). The model definition varies depending on the region or country’s regulation and other conditions. Business Improvement District (BID) in the USA, Business Improvement Areas in Canada (BIA), Urban Improvement District (UID), Neighborhood/Housing Improvement District (NID and HID) or Innovation areas in Germany, same concept with local variations that despite different nominations are still recognizable and consistent (Eick, 2012; Stalevska and Kusevski, 2018). Business Improvement District (BID) is the most used terminology to denominate the model and its characteristics. Regardless of its variations in terminology, there is some agreement in the literature on the model’s general characteristics. The district can be a public-private partnership in a geographically defined commercial area, authorized by local and state governments with a mandatory fee structure, collected by local authorities, often called BID levy. BIDs are established through a ballot of those who will be expected to pay the levy, business occupiers, or property owners. The district performs traditional BID services such as capital improvements, additional cleaning, area security, and marketing (Becker et al., 2011; Hoyt, International Journal of Business and Economic Development, Vol. 9 Number 1 May 2021 www.ijbed.org A Journal of the Centre for Business & Economic Research (CBER) 81 2003) that do not intent to substitute public services but are complementary or supplementary. Their emergency is generally connected to revitalizing decaying urban areas, increasing area footfall, improving the general conditions of the businesses operating in the area, and increasing their respective turnovers. This neoliberal urban governance approach has been seen as a new trend in decentralization policy efforts and a shift in urban entrepreneurialism involving more urban governance actors (Grossman, 2008; Peyroux et al., 2012; Stalewska and Kusevski, 2018; Ward, 2006). These partnerships allow the public sector to enjoy more entrepreneurial traits while allowing the private sector to utilize the public authority to achieve socioeconomic revitalization (Grossman, 2008), creating a synergy between each sector’s elements. There is a lot of evidence showing that the model has played an essential role in area revitalization. The impact is created by providing services and responding to local challenges more effectively by empowering and strategically advancing business and retail (Gopal-Agge and Hoyt 2007; Levy, 2001), destination promotion, and marketing. The ability of BIDs to attract funding for community development projects and services while bypassing many of the bureaucratic regulations placed on the public sector (Ziebarth, 2020) created an attractive development instrument that contributed to economic development and job creation. BID impact has also been related to increased property values (Morçöl et al., 2010) and higher financial returns for property owners. The introduction and spread of the model are subject to conditions and factors such as the area socioeconomic context, population size, entrepreneurial and commercial traditions (Costela‐Sánchez, 2018; Eick, 2012). Other factors that influence the introduction of the model are the political context, supporting legal framework, availability of governmental funding, and the commitment of different actors such as the public, the private, or third sector that support the process. (Costela‐Sánchez, 2018; Gopal-Agge and Hoyt 2007; The Means, 2013). Despite its recognized impact in the local context where it has been applied, critics express concerns about potential spill-over effects. The model has raised a few questions and critics regarding its impact on issues such as democracy and proper representation in the managing boards, limited accountability, inequality in the delivery of public services, or over-regulation on public spaces (Gopal-Agge and Hoyt 2007; Lewis 2010; Mitchell, 2008; Stalewska and Kusevski, 2018). Other critics are also