12A - INTENT TO HOLD PH - BID ASSESSMENT

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2013 BID Intent to Levy June 17, 2013 Page 2 Business Improvement District (BID) Background On February 6, 1984, the City Council adopted Ordinance No. NS-1715 pursuant to State law, creating a Business Improvement District in Downtown Santa Ana. The BID was established as a means of providing the Downtown business community with a funding source for promoting the Downtown through events and advertising pieces, increasing the security presence, enhancing maintenance of the downtown shopping corridors and implementing street improvements to the area. The district is funded through a charge on the business license tax for those businesses within the BID boundary (Exhibit 1). Based upon a current analysis of business license tax accounts, there are now 783 active business license accounts within the BID boundary with 622 BID-eligible businesses (State law exempts certain businesses from local business license taxes, including banks and insurance companies; the Municipal Code further exempts non-profits such as schools and churches). Since 2007, the district has been in suspension and BID assessments have not been levied on downtown businesses. In 2008, the City Council approved the establishment of the Downtown Santa Ana Community Management District, which is commonly referred to as the PBID. The PBID resulted in a levy on property owners rather than businesses. On February 4, 2013, the City Council adopted Ordinance No. NS-2842 repealing Article XX of Chapter 13 of the Santa Ana Municipal Code disestablishing the PBID. Concurrent with the elimination of the PBID, the City Council approved a Settlement and Release Agreement with Downtown, Inc. (DTI), related to their contract to administer PBID revenues. As part of the agreement, the City agreed to the following: 1. To fund the Clean and Safe Program for the Downtown at $400,000 per year for three years. 2. That in the event the BID is reactivated, DTI would receive 50% of the BID revenues for programming (through January 31, 2016 if the BID charge is levied for the three year period). The City anticipated that the remaining 50% of the BID funds would be programmed by a new merchants group, the Santa Ana Business Council Inc. 3. That if the BID is not reactivated by August 1, 2013, City fees and charges for specified events would be charged against a $189,000 "credit bank" for an 18-month period or until the credit is exhausted. Business Improvement District (BID) Reactivation Activities to Date As directed by the City Council in January, staff has taken the following steps so that reactivation of the BID may be considered by the Downtown business community and the City Council: 1. Conducted a field investigation to confirm and update the list of businesses within the BID boundaries. Given that there are 622 businesses eligible to pay the BID charge, staff estimates that 2013 BID revenue would be $250,000 with the average annual assessment estimated to be $415. 12A-2