NSW wants small businesses to take charge of reviving high streets. It comes at a cost

Small businesses will be empowered to revitalise lacklustre high streets and town centres under divisive new laws aimed at leveraging greater private investment to transform public spaces.

The state government this month passed legislation aimed at making it faster and easier for more small businesses to band together to set up so-called community improvement districts across NSW.

The model has also been utilised to revive the YCK night-time precinct in Sydney’s CBD. Credit: YCK

The precincts, which the former Coalition state government referred to as business improvement districts, arise from an agreement by businesses to pay extra fees to fund events, activities and services in the area in which they operate to improve their trading environment and public spaces.

These improvements typically go beyond what local government provides and can include street art, public amenities, branding to market their commercial district, and security and safety measures.

Transport, Music and Night-Time Economy Minister John Graham said, although it was already possible to set up the precincts in NSW, the process was “complex, cumbersome and slow”.

“This puts local businesses in the box seat to drive the change they want to see in their community,” Graham said.

“It will enable them to co-ordinate and raise money to make the enhancements their main streets and town centres need.”

Graham said districts that had been transformed include YCK (York-Kent-Clarence streets) night-time precinct in Sydney’s city centre, St Marys town centre near Penrith, and formed the Inner West Ale Trail, a joint project of 17 independent breweries across six suburbs from Marrickville to Rozelle.

Graham said the reforms enabled businesses to raise the levies without having to strike special rates under local government laws.

Under the scheme, individual businesses in a designated area vote in a ballot to establish one of the districts. If two-thirds of businesses are supportive, the district is set up and a levy introduced.

The Inner West Ale Trail brings together more than a dozen breweries from Marrickville to Rozelle. Credit: NSW government

The government said the levies were expected to cost about $400 to $700 per business.

Graham said the changes were accompanied by $2 million to fund the second stage of a pilot program to help businesses establish and run districts on Carlton Parade in Carlton, Guildford Road in Guildford, Miller Street in Gilgandra and Clarinda Street in Parkes.

The then-Perrottet government in 2022 started a pilot program and proposed policies to make it easier to set the districts up, describing it as “strata for the street”.

Business improvement districts have operated across the world for more than 50 years, and they include the Time Square Alliance in New York City, which comprises 2500 businesses. The schemes have been credited with reviving downtrodden areas in London and Auckland.

They have also sparked a growing backlash in the US and Britain, where critics have raised concerns about the costs to businesses, and private landowners and businesses managing public spaces.

Local Government NSW had raised concerns the precincts would undermine councils. LGNSW president Phyllis Miller told members in March consultation with councils would be pivotal, and noted the precincts could only be established if the relevant council, or councils, were supportive.

“Councils have veto power over any community improvement district in their local government area. This can help ensure that a CID’s activities align with a council’s strategic intent for that area.”

Miller also said the fees would be collected and administered by the state government, not councils, and the levy was not tied to the rating system, which meant they would not affect council income.

“Finally, any CID would only operate for a limited period, for example, five years, before requiring re-approval,” Miller said.

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