Autonomous efforts to improve local business environments have become an increasingly important impetus for economic development. Business improvement districts (BIDs), as one of such autonomous organisations, have clearly demonstrated benefits for promoting commercial areas over the last two decades. When BIDs spread over a city, however, not every commercial district succeeds in establishing BIDs despite some initial efforts. This research examines the types of challenges that these neighbourhoods experience in order to form BIDs. This study is based on census data analyses and in-depth interviews with city employees, BID consultants, executive directors of BIDs and community stakeholders in Los Angeles. The results show that the areas with unsuccessful attempts of BID formation in Los Angeles are relatively low-income immigrant neighbourhoods. Some of these neighbourhoods have struggled with disengaged property owners, spatial conflicts among diverse ethnic groups, immigrants’ skepticism towards government and the chronic presence of informal economic activities. These findings suggest that some disadvantaged neighbourhoods are not adequately informed or organised to form BIDs. Public officials and community workers can support these neighbourhoods by providing direct assistance for the development of collective vision and action among community stakeholders.