HomeMy WebLinkAbout12A - INTENT TO HOLD PH - BID ASSESSMENT
REQUEST FOR m
COUNCIL ACTION
aCITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY:
JUNE 17, 2013
TITLE: APPROVED
? As Recommended
DOWNTOWN SANTA ANA BUSINESS ? As Amended
IMPROVEMENT DISTRICT - INTENT TO El Ordinance on 1st Reading
? Ordinance on 2nd Reading
LEVY ASSESSMENT FOR 2013 ? Implementing Resolution
? Set Public Hearing For
CONTINUED TO
FILE NUMBER
CITY MANAGER
RECOMMENDED ACTION
1. Approve the 2013 Assessment Report and budget for the Downtown Santa Ana Business
Improvement District.
2. Adopt a resolution of intention to levy an annual assessment for 2013 and establish a time
and place for a public hearing to be held by the City Council on July 1, 2013 to hear and
consider all protests.
COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION
At its regular meeting on June 4, 2013, by a vote of 5:2 (nays from Bist, Sandoval), the
Community Redevelopment and Housing Commission: 1) found that the 2013 Downtown Santa
Ana Business Improvement District Assessment Report complies with the California Streets and
Highways Code §36533; 2) approved the 2013 Assessment Report; and 3) directed that the
Acting Executive Director of the Community Development Agency file the 2013 Downtown Santa
Ana Business Improvement District Assessment Report with the Clerk of the Council for City
Council approval or modification.
DISCUSSION
The City Council, at its meeting of January 22, 2013, directed staff to undertake activities to allow
consideration of reactivation of the Downtown Santa Ana Business Improvement District (BID).
Since that time, staff has proceeded with activities necessary for reactivation. At this time, City
Council action is required to initiate the next step in the process, which is to hold a public hearing
on the 2013 BID levy.
12A-1
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
2013 BID Intent to Levy
June 17, 2013
Page 3
2. Mailed a letter on March 25, 2013 to each business within the Downtown BID boundary
providing background on the BID and information concerning the upcoming process for
consideration of reactivation.
3. Posted "frequently asked questions" concerning the Downtown BID on the Community
Development Agency webpage.
4. Met with business groups to ensure full understanding of the reactivation process and
BID structure. Downtown Inc. and the Santa Ana Business Council hosted these
informational meetings on June 4 and June 5, 2013. Representatives from
approximately 21 businesses attended these informational meetings.
5. Worked with DTI and the Santa Ana Business Council on budget content and format.
As shown in the 2013 Santa Ana Downtown BID Assessment Report (Exhibit 2), both
organizations propose to focus on Downtown marketing efforts. This focus may be due
largely to the fact that the City is obligated to contribute $400,000 to the Downtown
Clean and Safe Programs for the next three years.
The Community Redevelopment and Housing Commission (CRHC) was designated as the BID
Advisory Board by the City Council in 2003. State law requires that there be an advisory board
and that the board review and approve specific items. These items, including a description of the
boundaries, the formula for the BID charge, and the budget for BID revenues, are contained as
part of Exhibit 2. The CRHC considered the Assessment Report at their June 4, 2013 meeting
and 1) found that it complied with State law; 2) approved the Report; and 3) directed that the
Report be filed with the Clerk of the Council for City Council approval or modification. The vote at
the CRHC was 5:2 with the two dissenting members concerned about reactivating the BID given
the past controversy with the PBID.
Remaining Actions Required for BID Reactivation
Pursuant to State law, the actions proposed for City Council action at this time are:
1. Approval of the 2013 Assessment Report and budget for the Downtown BID; and
2. Adoption of a resolution of intention to levy the 2013 BID assessment and establishing
July 1, 2013 as the date for the public hearing to consider protests and approve/deny
the BID levy (Exhibit 3).
If the City Council approves the recommended actions, staff will mail information to each
business within the BID boundary providing notification of the July 1 public hearing date and the
manner available to register protests, should a business owner elect to do so. At the public
hearing, the City Council will hear and consider any protests. If business owners representing a
majority of the total BID assessment protest, the BID levy will not occur and cannot be
considered again for at least 12 months. If no majority protest occurs, the City Council may
consider approval of the BID assessment for 2013. If the City Council approves the BID
assessment, staff will also seek authority to finalize administrative contracts with DTI and Santa
Ana Business Council to program the 2013 BID funds.
12A-3
2013 BID Intent to Levy
June 17, 2013
Page 4
It is important to note that the July 1 public hearing is to determine whether or not to levy the BID
assessment for calendar year 2013. The BID charge would be incorporated into the 2013
business license tax bill. The deadline for 2013 business license tax payment for the largest tax
group in the Downtown was extended by the City Council to September 30, 2013 to allow for the
consideration of the BID levy. Should the City Council approve the BID levy, the timing of
consideration for the 2014 BID assessment would occur in Fall 2013 to allow the levy to be
incorporated into the business license bills and proceed on normal billing cycles.
FISCAL IMPACT
If the recommended action item is approved, there is no direct fiscal impact on the City. The City
serves as a pass through for BID revenue in accordance with the Assessment Report and any
approved operating agreements. If the recommended action is not approved and the BID is not
reactivated by August 1, DTI can enforce the Settlement and Release Agreement and require
that the City establish the $189,000 "credit bank" for Downtown Inc. in accordance with the
Settlement Agreement.
Sandra D` ottlieb %
Acting Executive Director
Community Development Agency
SDG/LAO/MM/kg
Exhibit: 1. Downtown BID Boundary Map
2. Assessment Report
3. Resolution
12A-4
EXHIBIT 1
I i L
f ^ FLOWER ST.
V , _ Z ~l
T D ?
O z
n
h Z
r^"l)
c g
W O
v
F 91 -1
El
ILA
ILA ROSS ST.
m
u
3 n
2 g z
-0 BIRCH S . m
~ v
z
O
BIRCH ST.
rD m
z
T s
0 O
T
L--FL-
BROAD WAY
f"F
m ~
n
O
F-lw
SYCAMORE ST. SYCAMORE ST.
n'
MAIN ST.
BUSH ST.
CYPRESS
W_
W
O
SPURGEON ST.
b D m_
2 [1
~D D =
ORANGE ? 2
D
FRENCH ST.
w
v
MORTIMER Sr.
A 0% Al ~ nn 2
12A-6
EXHIBIT 2
DOWNTOWN SANTA ANA BUSINESS IMPROVEMENT DISTRICT
2013 ASSESSMENT REPORT
Background
On February 6, 1984, the City Council adopted Ordinance No. NS-1715 pursuant to
Section 36500, et seq., of the 1979 State of California Streets and Highways Code,
creating a Business Improvement District (BID) in Downtown Santa Ana. On October 6,
2003, the City Council appointed the Community Redevelopment and Housing
Commission (CRHC) as the Downtown Santa Ana Business Improvement District
Advisory Board. As the BID Advisory Board, the CRHC is responsible for making
recommendations to the City Council on the expenditure of revenues derived from the
levy of assessments, on the classification of businesses, as applicable, and on the
method and basis of levying the assessments (including the annual budget).
The BID was established as a means of providing the Downtown business community
with the funding to promote the Downtown through events and advertising pieces;
funding to increase security and enhance the overall aesthetics of the area; and also to
maintain the downtown shopping corridors.
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 (see
Attachment A).
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 volumes of the business (see
Attachment B).
2013 Budget Plan
Based on the feedback from the two Associations, the 2013 BID Budget focuses
primarily on the continuation of promotions and marketing of the BID. Some of the
promotion and marketing will be focused on Downtown events and advertising pieces;
which are all designed to enhance the overall aesthetics of the area and also to
maintain the downtown shopping corridors. Detailed breakdowns of the two groups'
budgets are attached (Attachment C). The estimated assessments from the BID would
Page 1 of 6
12A-7
be $250,000 to be split evenly by Downtown Inc. and the Santa Ana Business Council
Inc. the two business groups that have spearheaded this reactivation process. All
revenues collected since the 2007 BID assessment have been expended and there are
no surplus funds or deficits in this fiscal year.
These two representative business associations are proposing to host a variety of major
community events and promotions, including, but not limited to the following:
• Sound Downtown/Restaurant Week ($10,000)
• OC Pride ($5,000)
• Day of the Dead ($5,000)
• Patchwork ($10,000)
• Downtown Santa Ana Film Festival ($5,000)
• OC Fashion Week ($5,000)
• Artwalk / Sidewalk sale (Spurgeon & 4th Street) ($2,000)
• Valentine's Day ($1,000)
• Spring Festival & St. Patrick's Day ($2,000)
• Quinceanera Expo ($3,000)
• Mother's Day ($8,000)
• Father's Day ($1,000)
• 4th of July ($3,000)
• Art Fair ($2,000)
• 16th & Film Festival ($5,000)
• Lucha Libre & Halloween ($6,000)
• Noche de Altares ($3,000)
• Christmas ($4,000)
Other programming for the associations will include funding for the Downtown
Restaurant Association, Holiday promotions, website development and maintenance,
and an artist retention program.
Page 2 of 6
12A-8
ATTACHMENT A
l ~ L
FLOWER 5T.
n a
V Y
a
z ?
o D
a
~ N W ~ O
D El
DADTnU CT
ILA
LA ROSS ST.
?r ? n
n
m m
BIRCH S . L
70 O o
z
C BIRCH ST.
C
BROAD WAY
N
m 1
m
I"1
F-10
SYCAMORE ST. SYCAMORE ST.
n'
MAIN S T.
BUSH ST.
CYPRESS
co
O D El
SPURGEON ST.
CL D m
b
1
eD D =
ORANGE
D =
D
FRENCH ST.
W
0
ftMORTIMJER ST.
12A-9
ATTACHMENT B
2013 ANNUAL ASSESSMENT FORMULA
The following businesses located within the boundaries of the Business Improvement
District (BID), classified under City Ordinance NS 1690 as Amusement Services,
Pawnbrokers, Service Station and Classification A, including, but not limited to Retail
Sale of Goods, Hotel 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 one-quarter times 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 Business Improvement
District and a public hearing held by the City of Santa Ana.
Page 4 of 6
12A-10
ATTACHMENT C
DOWNTOWN BUSINESS IMPROVEMENT DISTRICT
PROPOSED BUDGETS SUMMARY
2013
OPERATING FUND
REVENUE
BID Assessments - current .........................................................$250,000
Prior Year Carry Forward ............................................................$0
Total Revenue $250,000
EXPENDITURES
Downtown Inc.
ADMINISTRATION
Overhead (Supplies, insurance, misc) ..................................$6,000*
MARKETING
Special Events
Sound Downtown/Restaurant Week $10,000
OC Pride $5,000
Day of the Dead $5,000
Patchwork (2x) $10,000
Downtown Santa Ana Film Festival $5,000
OC Fashion Week $5,000
Other $12,000
Total $52,000
Advertising (Print/Online) .................................................$57,000
OTHER PROGRAMMING
Restaurant Association ....................................................$5,000
Artist Retention Program ...................................................$5,000
Page 5 of 6
12A-11
Total $125,000
'Office Rent is being subsidized by a DTI Board member.
Santa Ana Business Council Inc.
ADMINISTRATION
Overhead (Office rental, supplies, insurance, misc) ................$12,500
MARKETING
Special Events ...............................................................$40,000
Artwalk / Sidewalk sale (Spurgeon & 4th Street) $2,000
Valentine's Day $1,000
Spring Festival & St. Patrick's Day $2,000
Quinceanera Expo $3,000
Mother's Day $8,000
Father's Day $1,000
4th of July $3,000
Art Fair $2,000
16th & Film Festival $5,000
Lucha Libre & Halloween $6,000
Noche de Altares $3,000
Christmas $4,000
Advertising (Print/Online) $50,625
Newsletters $8,750
Website & Social Media ....................................................$8,750
OTHER PROGRAMMING
Holiday Promotions .........................................................$4,375
Total $125,000
Total Expenditures $250,000
Page 6 of 6
12A-12
EXHIBIT 3
(jxs 6-06-13)
RESOLUTION NO. 2013-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA DECLARING ITS INTENTION TO LEVY AN
ASSESSMENT FOR THE DOWNTOWN SANTA ANA
BUSINESS IMPROVEMENT AREA FOR THE YEAR 2013
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby, finds, determines and
declares as follows:
A. By Ordinance No. NS-1715, adopted February 6, 1984, the City Council of the
City of Santa Ana established the Downtown Santa Ana Business Improvement Area
pursuant to sections 36500 et seq. of the California Streets and Highways Code; and
B. As provided in Ordinance No. NS-1715, the City Council is authorized to levy an
assessment in the following amounts for the improvements and activities of the Downtown
Santa Ana Business Improvement Area:
(i) For amusement services, pawnbrokers, service stations, retail sales of
goods, hotels, motels, theaters, food establishments: an assessment in an
amount equal to one and one-half (1.5) the annual business license fee.
(ii) For commercial and residential rental property: an assessment in an
amount equal to one-fourth (0.25) the annual business license fee.
(iii) For all other businesses: an assessment in an amount equal to the
annual business fee.
Section 2. The improvements and activities for which the assessment revenues
may be used in the Downtown Santa Ana Business Improvement Area pursuant to
Ordinance No. NS-1715 are as follows:
(A) Decoration of any public place.
(B) Promotion of public events.
(C) Furnishing of music in any public place.
Resolution No. 2013-XXX
Page 1 of 3
12A-13
(D) The general promotion of business activities.
Section 3. The Downtown Santa Ana Business Improvement Area is located as
shown on Attachment A, attached hereto and incorporated herein.
Section 4. An assessment report is on file with the Clerk of the Council to which
reference may be made for a full and detailed description of the improvements and
activities to be provided for the year 2013, the boundaries of the area, and the proposed
assessments to be levied upon the businesses within the area for the year 2013.
Section 5. A public hearing shall be held by the City Council at the City Council
Chambers, 22 Civic Center Plaza, Santa Ana, California at its regular meeting of July 1,
2013 at 6:00 p.m. or as soon thereafter as the matter may be heard, for the purpose of
determining whether to impose the above said assessment for the year 2013 for the
improvements and activities described in the report.
Section 6. At the public hearing, written and oral protests may be made in
accordance with sections 36524 and 36525 of the California Streets and Highways Code.
A protest may be made orally or in writing by any interested person. Any protest
pertaining to the regularity or sufficiency of the proceedings shall be in writing and shall
clearly set forth the irregularity or defect to which the objection is made. Every written
protest shall be filed with the Clerk of the Council at or before the time fixed for the public
hearing. Each written protest shall contain a description of the business in which the
person subscribing the protest is interested sufficient to identify the business and, if a
person subscribing is not shown on the official records of the city as the owner of the
business, the protest shall contain or be accompanied by written evidence that the person
subscribing is the owner of the business. A written protest which does not comply with this
section shall not be counted in determining a majority protest.
Section 7. This Resolution shall take effect immediately upon its adoption by the
City Council, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution.
ADOPTED this day of , 2013.
Miguel A. Pulido
Mayor
12A-14
Oxs 6-06-13)
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By:
Jose Sandoval
Chief Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2013-XXX to be the original resolution adopted by the City Council of the
City of Santa Ana on
Date:
Clerk of the Council
City of Santa Ana
ADOPTED this day of June, 2013.
Resolution No. 2013-XXX
Page 3 of 3
12A-15
ATTACHMENT A
TO RESOLUTION
FLOWER ST.
V) N
T = Z
D
D ? ?
f-+ Z 4. a
N ? W y
74 74
o O
D ?
~ i ?
(D
V1 ROSS ST.
i ~ ? n
T n
3
BIRCH S T.
N
71
0
Q
A
C BIRCH ST.
rD 0
gn
T
(3 O t n
BROAD WAY
v -r
ILA m
SYCAMORE ST. SYCAMORE ST.
f-f
MAIN ST.
BUSH ST.
CYPRESS
W
O
SPURGEON ST.
Q. D m
d
z L)
D =j
ORANGE
D =
D
FRENCH ST.
m
MORTIMER ST.
E-'
12A-16