Major overhaul mooted for Docklands Chamber of Commerce funding structure

Docklands could house the City of Melbourne’s first “Business Innovation District” (BID) following an independent review of its business precinct program (BPP), which funds the Docklands Chamber of Commerce (DCC).

The DCC is one of 10 “precinct” or trader associations supported under the council program, which has been the subject of a recent SGS Economics and Planning review that went before councillors for consideration at its March 25 meeting.

More than 1200 businesses across the municipality are currently members of precinct associations. These include the Yarra River Business Association (representing Southbank and South Wharf), Carlton Inc., Collins Street Precinct, City Precinct, Melbourne Chinatown Business Association, Kensington Business Association, Lonsdale St Greek Precinct, Melbourne City North Association and the North & West Melbourne Business Association.

While the SGS review put forward a series of recommendations to strengthen and build on the current precinct program, its most significant proposal looks set to be rolled out in Docklands in the form of the city’s first BID pilot.

According to Main Street Australia, a BID is a defined area within which businesses are required to pay an additional tax (or levy) to fund projects within the district’s boundaries.

Globally, they’re considered to be a useful economic development model, having been seen in other countries including Canada, the US, UK and Germany, as well as locally in municipalities such as Stonnington and Boroondara.

In its report, SGS stated that the council could focus on “testing the appetite for and feasibility of a pilot BID program” in Docklands by engaging stakeholders to assess willingness to participate in a “special rate scheme”.

Under the current precinct program, businesses are required to pay on average $50 each year to become a member of a trader association, which some groups reported as presenting a barrier.

Some associations said there was often a “reluctance” for some businesses to join based on a range of factors, including additional cost, a “what’s in it for them” mentality or “confused perceptions” about a precinct association’s role and authority.

A special rate scheme underpinning the proposed BID model for Docklands would instead see membership funded as a levy through a business’s rates, which is considered an effective way of getting more businesses to buy in to the work of their association and generate more revenue.

The legislative infrastructure is in place to enable the formation of BIDs in the City of Melbourne as it relates to the introduction of special rates schemes under the Local Government Act 2020.

For such a scheme to be established, clear alignment is required between the incidence of the special rate and the flow of benefits from the funded works and services, and “a majority of affected ratepayers agree to the introduction of the special rate”.

The City of Stonnington has previously levied a $1.8 million per annum special rate to fund marketing and programming to promote visitation and sales in the Chapel St activity centre.

However, the scheme was terminated following adverse audit reports, which pointed to lapses in financial accountability and opened the Stonnington council up to legal challenges from local businesses.

In its report, council management said Stonnington’s experience presented “an important lesson that governance structures for BID type schemes need to be robust and open to council and public scrutiny”.

Under a public-private partnership with the council, the SGS review said such a scheme could “support significantly scaled efforts in marketing, infrastructure improvement and capacity building”.

“This would require the development of a costed BID program and conceptualisation of a suitable governance structure which shares oversight between council and traders,” the report stated.

“A targeted rate in Docklands could be expected to generate between $500,000 and $1 million per year. Pending the resolution of these matters, the work of the BPP program, including council’s financial commitment, could be folded into a pilot Docklands BID as a supplement to resources raised via the targeted rate.”

With the council’s current four-year BPP (2021-25) to end on June 30, councillors unanimously endorsed a series of recommendations on March 25 for the program over the next two financial years.

Under the current program, associations were eligible for up to $120,000 in years three and four should they register more than 300 members.

In response to the review, council management proposed continuing the current program “with improvements”, including enhanced governance and accountability measures, increasing available funding to a maximum of $130,000 per annum and providing clearer program objectives.

The council said it would also consult with property and business owners on the appetite for a BID in Docklands, as well as the Collins Street Precinct Group, adding that it would also investigate additional BIDs in precincts across the city.

The council’s city economy and business portfolio lead Cr Kevin Louey, who has been involved with the BPP for nearly 20 years, thanked the many volunteers who worked across all the associations.

“I’ve seen it [the BPP] grow, I’ve seen the many volunteer hours that have gone into running all of these 10 geographic precincts that we have spread across our city – both in the city, as well as the fringes,” Cr Louey said.

“So, they all do a different type of activation but all of them put their heart and soul into activating their little part of town … I’ve got to thank them for all they do and the committees that strive to achieve the goals for their members as well.”

Lord Mayor Nick Reece said he was “a big fan” of the program.

“I think the teams of people behind precincts do incredible work for our city and make a real difference,” Cr Reece said.

“I think some of the outcomes we get from our precinct associations is truly remarkable and I feel like they make the council dollar go a long, long way in those business precincts so, thank you, to our business precinct presidents and teams.”

In its report tabled to councillors on March 25, City of Melbourne management cited several successful initiatives of its current program across the city that “drive visitation, enhance vibrancy, and boost our local economy”.

In Docklands, it referenced the DCC’s Docklands Dollars program from 2022-23, which saw the chamber partner with Lendlease, MAB, Mirvac and The District Docklands to launch a $100,000 rebate for residents to shop and support local traders.

“This highly successful initiative drove extra visitation and spend to Docklands at a time when the precinct most needed it. This included a $9 .30 return for every $1 spent and an average redemption of $134,” the report stated.

However, in its “outlook” for the DCC, the council described its current state as “improving, but requires council’s attention”, stating that Docklands remained a “priority area for council intervention”.

It comes off the back of the DCC’s recent Soul of Docklands initiative – a storytelling campaign co-funded together with Docklands’ four major developers – which struggled to achieve its desired outcomes.

However, it has more recently worked as part of the Docklands Stakeholder Group to deliver Docklands’ first farmers market series, which has been well received by the community despite multiple cancellations due to heat and clashing with the Run for the Kids event in April.

“At the DCC we are encouraged more than ever about the positive collaboration with the City of Melbourne teams. The review of the precinct program was thorough, providing comprehensive feedback that was well rounded from all parties,” DCC president Daniel Hibberd told Docklands News.

“We are eagerly awaiting the City of Melbourne to initiate conversations that enable us to understand more about the exciting opportunity of moving towards a BID system.”

“We are now keen to engage with all Docklands businesses to understand their point of view on how the DCC can support them with an expanded program such as this.” •