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HomeMy WebLinkAbout55FF - RESO - DT BID 2015REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: OCTOBER 21, 2014 TITLE: DOWNTOWN SANTA ANA BUSINESS IMPROVEMENT DISTRICT — INTENT TO LEVY ASSESSMENT FOR 2015 {STRATEGIC PLAN NO. 3, 4F} CITY MANAGEBQ CLERK OF COUNCIL USE ONLY: ❑ As Recommended ❑ As Amended ❑ Ordinance on 1'' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER RECOMMENDED ACTION 1. Approve the 2015 Assessment Report for the Downtown Santa Ana Business Improvement District (BID), which is administered by two organizations: the Santa Ana Business Council and Downtown Incorporated. 2. Adopt a resolution of intention to levy an annual business license tax assessment for the 2015 calendar year and establish a time and place for a public hearing to be held by the City Council on November 18, 2014 to hear and consider all protests. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION At its regular meeting on October 8, 2014, by a vote 4 -0 (Sandoval and Verino absent), the Community Redevelopment and Housing Commission: 1) found that the 2015 Downtown Santa Ana Business Assessment Report complies with the California Streets and Highways Code §36533; and 2) recommended that the Executive Director of the Community Development Agency file the 2015 Downtown Santa Ana Business Improvement District Assessment Report with the Clerk of the Council for City Council approval or modification. DISCUSSION The 2015 Assessment Report contains the basis and method of levying the assessment, estimated activities and budgets from the two business associations: the Santa Ana Business Council and Downtown Inc., and a map of the BID boundaries. The Assessment Report presented for consideration and recommended for approval has been reviewed by the City Attorney' s Office and determined to meet state law requirements. After approval of the report, the next course of action is to conduct a public hearing, which is scheduled for November 18, 2014. 55FF -1 Downtown Santa Ana Business Improvement District Intent to Levy Assessment for 2015 October 21, 2014 Page 2 Terms The City Council activated the current BID on July 1, 2013. To administer the activities of the BID, the City executed operating agreements with Downtown Inc. and the Santa Ana Business Council. These agreements contain provisions to ensure proper administration and distribution of funds; provisions are included for items such as the annual budget, financial record keeping, fund distribution, and board composition and meeting requirements. The terms of these Operating Agreements commenced on September 17, 2013 and terminate on September 17, 2016, unless terminated sooner due to any violations of the provisions in the agreements, or if the BID is not approved in any given year. The Agreements are renewed automatically in one year renewal terms, unless either party gives at least two months' notice of termination. Each organization receives roughly $100,000 (collected from the business license tax fee) per calendar year (January through December) and may carry over unspent funds into the next year. Downtown Inc. has (as of September 15, 2014) approximately $113,000 and estimates it will spend $53,000 between now and December and will thus carry over $60,000. The Santa Ana Business Council has (as of September 15, 2014) approximately $144,000 and estimates that it will spend $44,000 between now and December and will thus carry over $100,000. If the BID is successfully renewed, each organization will receive an additional allocation of roughly $100,000 each in January 2015. BID Background On February 6, 1984, the City Council adopted Ordinance No. NS -1715 pursuant to state law, creating a Business Improvement District (BID) in Downtown Santa Ana. The BID was established as a means of providing the Downtown business community with the funding to promote events and create promotional materials, increase the security presence, enhance maintenance of the downtown shopping corridors, and implement streetscape improvements to the area. The BID is funded through an additional charge on the business license tax for those businesses within the BID boundary (Exhibit 1). In 2008, the City Council approved the establishment of the Downtown Santa Ana Community Management District (commonly referred to as the PBID) and put the BID in suspension. 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 Downtown Community Management District. With the disestablishment of the PBID, several downtown merchants and property owners expressed an interest in reactivating the BID to receive funding to promote the safety, maintenance, and overall economic stability of the Downtown. The City Council activated the current BID on July 1, 2013 and approved the operating agreements for the two associations administering the BID on September 17, 2013. 55FF -2 Downtown Santa Ana Business Improvement District Intent to Levy Assessment for 2015 October 21, 2014 Page 3 shopping, dining, and entertainment destination), Strategy F (Partner with downtown business and merchant associations to program events that showcase restaurants, shopping and entertainment venues). FISCAL IMPACT There is no direct fiscal impact associated with this action. The City collects the BID revenue from businesses within the BID boundary and distributes funding to each organization, in accordance with approved operating agreements. KellyV�Rn—s Executive Director Community Development Agency 212 Exhibit: 1. Assessment Report 2. Resolution 55FF -3 55FF -4 Exhibit 1 DOWNTOWN SANTA ANA BUSINESS IMPROVEMENT DISTRICT 2015 ASSESSMENT REPORT Backaround 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 600 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). 2015 Budaet Plan Based on the feedback from the two Associations, Downtown Inc. and the Santa Ana Business Council Inc., the 2015 BID Budget focuses 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 assessments from the 2015 BID are estimated at $200,000 to be split evenly by Downtown Inc, and the Santa Ana Business Council —the two business groups that have spearheaded this BID process. Both associations will have carryover funding from the previous year, which is estimated to be approximately $60,000 for Downtown, Inc, and approximately $100,000 for the Santa 55FF -5 Ana Business Council. This carryover has been incorporated into a reserve fund for their 2015 budgets. This reserve funding may be used for additional events and promotions throughout the 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: Downtown Inc. Sound Downtown /Restaurant Week Art Walk (12x) OC Pride Patchwork (2x) Savor Santa Ana Business Council Valentine's Day Plaza Primavera 5 de Mayo Dia de las Madres Parade /Fiestas OC Film Fiesta Dia de los Muertos Danzantes del Sol Plaza Navidena Art Walk Other programming for the associations will include ongoing social media marketing, funding for the Downtown Restaurant Association, holiday promotions, website development and maintenance, and purchase of streetscape amenities such as benches along the Wellness Corridor. 55FF -6 �V I a, �o rn LA 3 O 3 rD r 0 a F-111 i f_ C e 3: I J, 14 L; r_ 1 BUSINESS IMPROVEMENT DISTRICT BOUNDARY FLOWER ST. ti � ❑ ❑ it a a D 2 Z D 4 � m � ❑ G n N � O a BIRCH ST. i L;4 BROAD WAY ❑p ..T.❑. ya C �� SYCAMORE ST. SYCAMORE ST. ❑ -0 ❑ MAIN ST. 7 ❑ ❑ 1-1 F-1 El ❑ BUSH ST. F-1 El El ❑ F-1 55FF -7 1 101 D � D D a a FRENCH ST. d� ATTACHMENT B 2015 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. 55FF -8 ATTACHMENT C DOWNTOWN BUSINESS IMPROVEMENT DISTRICT PROPOSED BUDGETS SUMMARY 2015 OPERATING FUND REVENUE 2015 BID Assessments — Projected $200,000 Prior Year Carry Forward $160,000 Total Revenue $360,000 Downtown Inc. ADMINISTRATION Overhead (Office Supplies, Insurance, Professional Services) ri i1AZI 4 l►lr Sound Downtown $10,000 Artwalks (12x) $15,000 OC Pride $5,000 Patchwork (2x) $10,000 Savor $10,000 Events Total Advertising (Print/Online) OTHER PROGRAMMING Restaurant Association $5,000 Artist Retention Program $5,000 Misc. $5,000 Other Total 2014 CARRYOVER TOTAL 55FF -9 $10,000 $50,000 $25,000 $15,000 $60,000 $160,000 Santa Ana Business Council ADMINISTRATION Overhead (Office Supplies, Insurance, Professional Services) MARKETING Serenade on the Streets Special Event Sponsorship Valentine's Day Plaza Primavera 5 de Mayo Die de /as Madres Parade /Fiestas OC Film Fiesta Dia de los Muertos Danzantes del Sol Plaza Navidena Art Walk Event Sponsorship Total Web, Social Media, Advertising, & Promotional Materials OTHER PROGRAMMING Streetscape Improvements 2014 CARRYOVER 2016 RESERVE (Projected) TOTAL 55FF -10 $10,000 $60,000 $10,000 $60,000 $10,000 $100,000 $50,000 $200,000 (jxs 10- 14 -14). RESOLUTION NO. 2014- 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 2015 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: (a) 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. (b) For commercial and residential rental property: an assessment in an amount equal to one - fourth (0.25) the annual business license fee. (c) 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. 2014 -XXX Page 1 of 4 55FF -11 (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 2015, the boundaries of the area, and the proposed assessments to be levied upon the businesses within the area for the year 2015. 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 November 18, 2014 at 5:45 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 2015 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 2014. Resolution No. 2013 -XXX Page 2 of 4 Miguel A. Pulido Mayor 55FF -12 (jxs 10- 14 -14) 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. 2014 -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 November, 2014. Resolution No. 2014 -XXX Page 3 of 4 55FF -13 C11 L�Iy/ l70 3 3 p� (V O . ATTACHMENT A BUSINESS IMPROVEMENT DISTRICT BOUNDARY It FLOWER ST. z �! y ❑ ❑ Y O BIRCH ST. ❑S s F-10F y F-1 SYCAMORE ST. F-1 y ❑ ❑ MAIN ST. El D 7 F1 8U5H ST. ❑ F-1 F-1 ❑ SPURGEON F F-1 El Resolution No. 2013 -XXX Page 4 of 4 55FF -14 �r 0 i5 ST. n 0 ❑ �❑ SYCAMORE❑ ST. ❑ ❑ ❑ F-1 ❑ [:1 ❑ ST. bra tx