It would also give businesses a stronger voice in disputes with the council, with footpaths and high commercial rates a few of the long-time bugbears.
The group wanted to make the centre of Kaitaia "more secure, tidier and nicer looking" and to put the town "on the map in a positive way". One of the projects in its sights was creating an attractive park in Melba St, which already had a lawn and trees but was blighted by old, unsightly public toilets.
Another idea was walkway from Te Ahu to Melba St lined with sculptures or photo murals.
The business association was proud to have set up the first BID in Northland, and the country's first in a rural centre.
Speaking at last week's council meeting, Mr Phillips said properties inside the BID - which covered the old Kaitaia borough commercial and industrial zones - would be charged an average of $200 each. The timber mill would pay significantly more and small shops about $100.
It would be up to property owners whether to absorb the new fee or pass it on to their tenants.
The BID had to win approval of the majority of property owners when they voted in a ballot earlier this year.
Close to half the groups' 2012-13 budget of $23,000 would be spent on maintaining the town's CCTV system, which was starting to wear out, and investigating ways of improving the town's appearance.
Councillor Monty Knight, himself a Kaitaia business owner, warned of a possible backlash from businesses already struggling to pay their rates.
Because the "fairer" rates system proposed in the Long-Term Plan had not gone ahead, commercial property owners were still paying a three times differential on their rates - and now they would see a new charge on top of that.
"We're going to have to brace for a reaction," Mr Knight said.
What is a BID?
The goal of a Business Improvement District is to boost business by developing, improving and promoting town centres.
Unlike a business association, which can only levy its members, all property owners in the BID's designated area pay an annual fee via the council rates bill.
Supporters say a BID spreads costs more fairly, gives businesses more clout than a voluntary association, and can raise a lot more money.
Kaitaia's BID has about 270 members; the business association had just 30.
An attempt to set up a BID in Kerikeri, which was intended to be the model for the rest of the Far North, failed last year when a ballot didn't get the required 50 per cent support.
The Kaikohe Business Association is actively pursuing a BID and the idea has been mooted in Dargaville.
BIDs originated in Canada in the 1970s and are now common in Europe, North America and NZ's big cities, although Kaitaia's is the first in a rural centre. They are private organisations but councils provide the legal basis and collect membership fees.