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Home My WebLink About12A - DT BID 2017REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: NOVEMBER 15, 2016 TITLE: DOWNTOWN SANTA ANA BUSINESS IMPROVEMENT DISTRICT — INTENT TO LEVY ASSESSMENT FOR 2017 {STRATEGIC PLAN NO. 3, 4F} CITY MANgkR RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: :-•c• 70 ❑ As Recommended L7 As Amended ❑ Ordinance on 1a' Reading ❑ Ordinance on 2n' Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER 1. Approve the 2017 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 2017 calendar year and establish a time and place for a public hearing to be held by the City Council on December 20, 2016 to hear and consider all protests. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION At its meeting on October 26, 2016, by a vote 4:0 (Aguinaga and Leon abstained) the Community Redevelopment and Housing Commission approved the following: 1. Recommend that City Council approve the 2017 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. Recommend that City Council direct the Deputy City Manager to file the 2017 Business Improvement District Assessment Report with the Clerk of the Council for City Council approval or modification. DISCUSSION The 2017 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 (Exhibit 1). The Assessment Report presented for consideration and recommended for approval has been reviewed by the 12A-1 Downtown Santa Ana Business Improvement District Intent to Levy Assessment for 2017 November 15, 2016 Page 2 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 scheduled for December 20, 2016. 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 Agreements are renewed automatically in one year renewal terms, unless either party gives at least two months' notice of termination, or if the BID is not approved in any given year. Each organization receives approximately $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. will not carry over funds from 2016 into 2017. The Santa Ana Business Council will carry over a reserve of approximately $50,000 into 2017. If the BID is successfully renewed, each organization will receive an additional allocation of approximately $100,000 in 2017 (Exhibit 2). 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. 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. STRATEGIC PLAN ALIGNMENT Approval of this item allows the City to meet Goal #3 Economic Development, Objective 4 (Continue to pursue objectives that shape downtown Santa Ana into a thriving, culturally diverse, shopping, dining, and entertainment destination), Strategy F (Partner with downtown business 12A-2 Downtown Santa Ana Business Improvement District Intent to Levy Assessment for 2017 November 15, 2016 Page 3 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. Robert C. Cortez Deputy City Manager — City Manager's Office Exhibits: 1. 2017 Assessment Report 2. Resolution 12A-3 12A-4 DOWNTOWN SANTA ANA BUSINESS IMPROVEMENT DISTRICT 2017 ASSESSMENT REPORT Backaround On February 6, 1984, the City Council adopted Ordinance No. NS -1715 pursuant to Section 36500, at 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). 2017 Budaet Plan Based on the feedback from the two Associations, Downtown Inc. and the Santa Ana Business Council, the 2017 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 2017 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. Any remaining funds from the previous year will be incorporated into a reserve fund for the groups' 2017 budgets. Downtown, Inc. will not carry over funds into 2017. The Santa Ana Business Council will carry over approximately $50,000 into 2017. This reserve funding may be used for additional events and promotions throughout the year. EXHIBIT 1 12A-5 In 2017, the two representative business associations are proposing to host and/or sponsor a variety of community events and promotions, including: Art Walk (12x) Patchwork Savor Santa Ana Weekly live music on Calle Cuatro Weekend matinees Sidewalk Sales Flashmob Contests Other programming for the associations will include ongoing social media marketing, funding for the Downtown Restaurant Association, holiday promotions, website development and maintenance, and ongoing support for small businesses. 12A-6 iv w LA LA 3 Y rD 3 ID r+ r ATTACHMENT A BUSINESS IMPROVEMENT DISTRICT BOUNDARY FLOWER ST. a 3 r a y z -> -, BIRCH ST. Fl—] y❑ ❑ �� SYCAMORE 5T. SYCAMORE 5T. F I -El MAIN Sl'. F-1 [-� 1:1 BUSH ST. F-1 El El [:]El El SPURGEON I -ago FRENCH 5T, 0 12A-7 ATTACHMENT B 2017 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. 12A-8 ATTACHMENT C DOWNTOWN BUSINESS IMPROVEMENT DISTRICT PROPOSED BUDGETS SUMMARY 2017 OPERATING FUND REVENUE 2017 BID Assessments — Projected $200,000 Prior Year Carry Forward (Estimated) $50,000 Total Revenue $250,000 EXPENDITURES Downtown Inc. (DTD PERSONNEL Lead Consultant $36,000 Administration $9,000 Event Planning $4,000 Social Media $4,000 Professional Services $5,000 Personnel Total $58,000 COORDINATION & CAPACITY DEVELOPMENT Trainings/Education $1,000 Memberships/Affiliations $1,500 Meetings/Communication $2,500 Coordination & Capacity Development Total $5,000 4/_1NrNAII0116 Advertising/Promos $10,000 Programming $8,000 Stakeholder Partnerships $8,000 Artists/Performers $4,000 Marketing Total $30,000 OFFICE/BUSINESS EXPENSES Web/Tech $1,500 Office supplies/Expenses $1,500 Insurance/Permits/Fees $4,000 Office/Business Expenses Total $7,000 DTI — TOTAL EXPENDITURES (2017) 1100,000 12A-9 Santa Ana Business Council (SABC) ADMINISTRATION General Labor Office Supplies Administration Total PROFESSIONAL SERVICES Insurance PR/Consulting Accounting Seminars/Training Professional Services Total MARKETING Communications//Web/Social Media Flyers/Advertising/Printing Web hosting/Social Media Fees Sponsorships Economic/Education Development Marketing Total BID PROMOTIONS/LIVE ACTIVATION Music/Entertainment (weekly) Contract Services (weekly) Contests Collaborative Events/Sponsorships BID Promotions/Live Activations Total SABC — TOTAL EXPENDITURES (2017) TOTAL BID EXPENDITURES (2017) $2,000 $2,000 $3,000 $26,000 $3,000 $1,000 $18,100 $10,500 $400 $3,000 $7,000 $52,000 $13,000 $3,000 $6,000 12A-10 $4,000 $33,000 $39,000 $74,000 $150,000 $250A0 ROH — 11/15/16 RESOLUTION NO. 2016- 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 DISTRICT FOR THE YEAR 2017 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 District pursuant to Ordinance No. NS -1715 are as follows: (a) Decoration of any public place, (b) Promotion of public events. Resolution No. 2016 -XXX Page 1 of 3 EXHIBIT 2 12A-11 (c) Furnishing of music in any public place. (d) The general promotion of business activities. Section 3. The Downtown Santa Ana Business Improvement District 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 2017, the boundaries of the area, and the proposed assessments to be levied upon the businesses within the area for the year 2017. 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 December 20, 2016, 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 2017 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. Resolution No, 2016 -XXX Page 2 of 3 12A-12 ADOPTED this day of 2016. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia f�,,.Carvajho, City Attorney IS Assi�bnt Cigy 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. 2016 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of the Coun City of Santa Ana 12A-13 Resolution No, 2016 -XXX Page 3 of 3 12A-14 ATTACHMENT A BUSINESS IMPROVEMENT DISTRICT BOUNDARY FLOWER ST. /Ln > ❑ �." y a IIII— JIII " z4Ln o rD (i ROSS ST. F 3 n +� L BIRChI sr. O BIRCH ST. E ro IIII�"'�I�II � rD L�li? BROAD WAY ® F—I � El V1 SYCAMORE 5T. YCA ACRES [::;L ❑"❑ MAIN ST. BUSH 5T. CYPf�EYS ❑ ❑ El El W d O 4PURGEONS5T. n _ on OPANtiF. 2 FRENCH ST. w� 0 h MORTIMEfl ST 12A-15 12A-16