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HomeMy WebLinkAbout19F - DOWNTOWN SA BUSINESS IMPROVE DISTRICT ANNUAL RPTREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MAY 4, 2009 TITLE: DOWNTOWN SANTA ANA BUSINESS IMPROVEMENT DISTRICT 2009 ANNUAL REPORT AND AGREEMENT WITH DOWNTOWN INC. CITY MANAGER RECOMMENDED ACTION 1. Approve the 2009 annual report. CLERK OF COUNCIL USE ONLY: APPROVED ^ As Recommended ^ As Amended ^ Ordinance on 15f Reading ^ Ordinance on 2"d Reading ^ Implementing Resolution ^ Set Public Hearing For CONTINUED TO FILE NUMBER 2. Direct the City Attorney to prepare and authorize the City Manager and Clerk of the Council to execute an amended agreement with Downtown Inc., a non-profit corporation, in the amount of $205,000, subject to non-substantive changes approved by the City Manager and City Attorney. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION At its Regular Meeting of April 21, 2009, by a vote of 5:0, the Community Redevelopment and Housing Commission recommended that City Council (1) approve the 2009 annual report and (2) authorize the City Manager and Clerk of the Council to execute an agreement with Downtown Inc., a non- profit corporation, in the amount of $205,000, subject to non-substantive changes approved by the City Manager and City Attorney. DISCUSSION On February 6, 1984, the City Council adopted Ordinance No. NS-1715 pursuant to Section 36500 et seq. of the California Streets and Highways Code, creating a Business Improvement District (BID) in Downtown Santa Ana. The BID allows the businesses to assess themselves in order to raise funds for the promotion and improvement of the Downtown area. The enabling statute calls for an advisory board to make recommendations to the City Council on the expenditure of revenue derived from assessments, the classification of businesses, and the method and basis of levying assessments. The advisory board also has a report prepared which it files with the Clerk. The report includes the name and boundaries of the BID, the activities and their cost proposed for the coming year, the method and basis of levying and collecting the assessments, and basic 19F-1 BID 2009 Annual Report and Agreement with Downtown, Inc. May 4, 2009 Page 2 financial information covering such things as prior year surplus or deficits and non-assessment revenue. The critical factor behind the success of BIDS is that district stakeholders control and manage their own programs and budget. In nearly every BID in California, district stakeholders - those businesses actually paying into the district - are designated as the advisory board. Until October 2003, the Downtown Santa Ana Business Association (DSABA) fulfilled that role. When DSABA wound down its affairs as an active stakeholder group representing the greater Downtown in general, and the BID in particular, the Council appointed the Community Redevelopment and Housing Commission as advisory board to fill the void. In April, a Business Improvement District service agreement for $25,000 was executed with Downtown Inc. to facilitate the immediate need for enhanced security and a Mother's Day promotion. A total balance of $205,000 of carry forward 2007/2008 BID funds remains available to be programmed for marketing, promotion and other activities of benefit to the Downtown Santa Ana Business Improvement District. In order to expend the remaining carry forward funds, an annual report must be approved by the City Council. It is proposed that the remaining funds be allocated to Downtown, Inc. for implementation in accordance with the budget (Exhibit 1). Downtown, Inc. is the newly formed non- profit corporation that will oversee administration of the Community Management District which is the funding mechanism enacted in recent months to replace the BID for Downtown activities and improvements. The board of Downtown, Inc., in consultation with other stakeholders in the Downtown, has identified four primary categories for funding: 1) Clean and Safe; 2) Holiday Decorations; 3) Bicycle Racks; and 4) Promotions and Marketing. The Clean and Safe funds will be used to enhance security in the area during late weekend evening hours. This will be accomplished with a private security company under contract with Downtown, Inc. The holiday decoration storage, installation and removal and bike rack installations on Second Street Promenade are outstanding obligations to be assumed under the proposed contract. The balance of the funds will be used for marketing and event promotions. 19F-2 BID 2009 Annual Report and Agreement with Downtown, Inc. May 4, 2009 Page 3 FISCAL IMPACT Funds are available in the Downtown Business Improvement District Trust & Agency Reserve account (no. 093-01-3611). APPROVED AS TO FUNDS AND ACCOUNTS: C Cynthia J. elson Deputy City Manager for Development Services Community Development Agency Francisco Gutierrez Executive Director Finance & Management Services Agency CJN/NTE/TE/mlr 19F-3 _ _ „x _ .~~,.;_ ..... ,. .. DOWNTOWN SANTA ANA. BUSINESS IMPROVEMENT DISTRICT 2009 ANNUAL REPORT Background The Downtown Santa Ana Business Improvement District (BID) was established in February 1984 by the City Council as a means of providing the Downtown business community with funding for promoting the area, increasing security, enhancing maintenance, and implementing physical improvements. The Community Redevelopment and Housing Commission (CRHC) is the BID Advisory Board. Improvement Area Boundaries The geographic boundaries of the district remain unchanged from the original 1984 area, and they include over 700 retail, service, and professional members (Exhibit A). Method and Basis of Levying Assessments • Assessment Formula The formula for the BID tax levy also remains unchanged from the original 1984 ordinance and is based on the category and/or sales volume of the business as follows: The following businesses located within the boundaries of the BID, classified under City Ordinance NO 1690 as Amusement Services, Pawnbrokers, Service Station and Classification A including, but not limited to, Retail Sale of Goods, Hotels and Motels, Theaters and Food Establishments, shall pay an amount equal to one and one-half times their annual business license fee. Businesses classified as Commercial Rental Property, Rental Property, Residential and Rooming House shall pay an amount equal to their annual business license fee. All other businesses, including Professions, Trades, and Services within the boundaries of the proposed Business District, shall pay an amount equal to their annual business license fee. Once the assessment formula is established, it cannot be changed without written notice to all businesses within the boundaries of the proposed BID and a public hearing held by the City. • 2009 Assessment Levy Due to the carryover of unprogrammed funds from 2007 and 2008, there will be no assessment levied or collected in 2009. 19F-4 EXHIBIT 1 Summary of Activities and Improvements All programs and activities for the year 2009 can be classified in the following broad categories: • "Clean and Safe" o Supplemental security for weekend nights o Supplemental maintenance Events and Promotions o Holiday celebrations o Merchant promotions o Social celebrations o Seasonal events o Arts and music Publicity, Advertising, Marketing, and Outreach o Newsletters o Website o Visitor guides/maps o General advertising Physical Amenities o Street and skyline banners o Holiday decorations o Bicycle Racks • Economic Development o Business assistance 2009 Budget Plan Downtown Inc. is a new nonprofit corporation composed of downtown stakeholders dedicated to downtown economic revitalization. They led the successful effort to form a Community Management District (CMD), and this group has requested designation as the recipient/management organization of the CMD funds. Downtown Inc., as the sole community based organization for downtown, will be the contract agency for the BID funds. With the onset of the CMD, the BID will be allowed to dissolve. It is anticipated that this will be the final year of programming utilizing BID funds. Downtown Inc., even though it is developing new activities and a new approach to revitalization for 2010 and beyond, intends to use these funds for programs and activities similar to those implemented over the past few years. Working together, Downtown staff and stakeholders developed the 2009 Budget. 19F-5 2009 Budget Summary REVENUE Prior year operating surplus $205,000 TOTAL REVENUE $205,000 EXPENDITURES Overall Downtown "Clean and Safe" programming Prior Holiday Obligations (Decorations) Prior Obligation/FFE (Bicycle Racks) Promotions and Marketing TOTAL EXPENDITURES $ 90,000 13,000 5,000 97.000 $205,000 19F-6