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6 Reasons 'Community' Matters in Business -- Your Business You've heard of BIDs, or business improvement districts. Now, get acquainted with CBDs, or community benefit districts.

By Marco Li Mandri Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Meinzahn | Getty Images

During my first entrepreneurial venture with my partners -- opening an Italian-food manufacturing plant in San Diego in the late 1980s -- I experienced first-hand the importance of opening a business in an older, but emerging community.

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When that manufacturing business faltered and closed in 1993, I again turned toward the notion of community: I leaned on my experience as the president of a business improvement district (BID) to form New City America, dedicated to creating, reinventing and fixing business districts throughout the nation based on the principles of place, financing and district management.

Since that time, my team has formed 78 community benefit districts (CBDs), which evolved out of the older business improvement district concept, though both are centered around creating sustainable financing to help businesses through assessments levied on property owners (who ultimately benefit). Our organization has also helped write local and state legislation to facilitate this growth.

So, why should a business owner, entrepreneur or property owner move into an area with a CBD when the latter requires a higher level of operating costs relative to a district without one? Here are six ways these districts can benefit your business:

1. Brand identity

Whether your business category is retail, restaurant, office, co-working, professional or something else, consumers identify with branded areas. In fact, a district's identity is key to creating demand for walking traffic and a dynamic critical mass that draws people. The Little Italy Association of San Diego, which New City America established and has managed for over 20 years in San Diego's Little Italy district, is one of the best examples of a comprehensive approach involving branding all assets in the district.

2. The creation of order

"Order" comes in many forms: clean sidewalks, trimmed trees, good landscaping, management of homeless encampments, elimination of odors, security and more. As municipal services nationwide are cut back due to the chronic financial crisis in our cities, CBDs fund the services that many cities have never provided yet are in need of more than ever.

Related: 5 Ways Small Businesses Can Endear Themselves to the Community

CBDs provide services from curb to property line, not just curb to curb -- thus ensuring that a district's public rights of way are clean and making small business fronts attractive for customers. One of the best examples of a turnaround district is the Downtown Glendale Association in Glendale, California. Its level of growth and strong attraction for businesses, as well as new residential development, over the past five years, makes it one of the true success stories in Los Angeles County.

3. New public spaces and place-making

Consumers are increasingly drawn to great, well-managed public spaces. The management of the "place" accentuates an area's history, the leaders who created it, plans for the future and mitigation of the impact of new developments.

The most valuable real estate in the country today, in fact, is found around beautiful well-managed public spaces. One of the best examples of this correlation between public spaces and higher-valued business districts is Bryant Park in New York City -- operated by the Bryant Park Corporation.

Post Office Square in Boston is another example; also worth citing is the array of piazzas in San Diego's Little Italy -- like Piazza Basilone. Placing well-managed and thoughtfully designed public seating areas throughout a district is key to encouraging the community to spend more time there.

New City America has made place-making and public-space management a core feature of its business model. We have led and activated at least 10 public space developments around the nation, including ones in Liberty Station, San Diego; Downtown San Leandro; and (the aforementioned) Downtown Glendale.

Placing well managed and thoughtfully designed public seating areas throughout the district is key to encouraging the community to spend more time in the area. The leaders in this field and the first international experts who understood the impact of implementing public spaces in a business district is Project for Public Spaces, which has been responsible for activating the core of San Diego's Balboa Park and New York's Bryant Park.

4. Stronger community

Dynamic district management corporations attract quality businesses, employers and employees. These groups seek an environment that is thriving -- and which in turn often increases opportunities for collaboration and growth. Businesses get support from the non-profit organization that's managing the CBD, so it's crucial that the management corporation have an entrepreneurial mindset as it implements new projects.

5. Effective community voice

District management corporations become the first line of defense for problems in the district, as well as advocates for local businesses and property owners. In other words, they take care of issues for the community.

That may mean countering decisions by local elected leaders that disregard the short- and long-term needs of the community. An effective CBD can assume responsibility for resolving issues in a timely matter, making things painless for local businesses.

Related: Forget Silicon Valley: Build Your Business in the 'Burbs

6. Increased customer traffic

CBDs focus on marketing the district as a destination for shopping, dining, living, social activities and more -- highlighting what defines "community" and increasing the value of the area. This generates awareness about the community, ultimately increasing foot traffic to the district and allowing entrepreneurs to capitalize on that fact, so they can increase their sales and establish rapport with new customers, as well as maintain relationships with older ones.

One of the best districts that manages high levels of pedestrian traffic is the Times Square Alliance. By vacating Broadway in New York City, the Alliance made Times Square a successful model for integrating vehicular traffic and pedestrian traffic.

In sum, CBDs are the solution to our increasingly dense and dynamic city districts. They provide management for the financing mechanism that allows a community to provide the special services it needs -- ultimately creating the thriving business district that can help local businesses -- your business -- be successful.

Marco Li Mandri

President and Founder, New City America Inc.

Marco Li Mandri is the president and founder of New City America Inc., a company dedicated to business district revitalization throughout the country. Li Mandri has over 30 years of entrepreneurial experience and 20 years of experience creating the perfect formula to grow neighborhood business improvement districts -- and community benefit districts (CBD). To date, Li Mandri has successfully formed nearly 80 CBDs and tourism improvement districts in over 15 different states in the United States. Li Mandri has assisted in writing local legislation in different states to accommodate special needs of property-based maintenance districts and wrote the local enabling ordinances in California allowing greater flexibility in establishing property assessment districts.

 

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