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Council Meeting April 28, 1998
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Santa MOnica, California · I '
TO Mayor and City Council
FROM City Staff
SUBJECT Recommendation to 1) Approve In Concept the Merger Between the
Bayslde District Corporation and the Central Business DiStrict, 2) Authorize
the CIty Manager to Negotiate and Execute a New Services Agreement
Between the City and Bayslde to Reflect the Merger, and 3) Terminate the
EXisting Contract Between the City and the Santa MOnica Chamber of
Commerce Regarding MOnies Collected From the CBD
INTRODUCTION
This Staff Report recommends that the City Council approve In concept the merger
between the Bayslde District Corporation (Bayslde) and the Central Busmess District
(CBD) 1t further recommends that the CIty Manager be authorized to negotiate and
execute a new Services Agreement between the City and Bayslde to reflect the new
roles and responsibilities antiCipated by the merger, and to termmate the eXisting
contract between the City and the Santa MOnica Chamber of Commerce with regard to
momes collected from the CBD as of the date of execution of the new Bayslde services
agreement
BACKGROUND
The CBD was formed November, 1966 under Ordinance No 725 (CCS), as a BUSiness
Improvement Area (BIA) Retail merchants within the CBO pay an additional bUSiness
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license tax (commonly known as the "CBD assessment") totaling 1/15 of 1 % of taxable
sales up to a maximum of $1,000, with such assessment collected by the City and
adminIstered by the Santa MOnica Chamber of Commerce under the terms of a service
contract sIgned In 1967 That service contract mandates that the Chamber shall expend
the mOnies, currently totaling approximately $167,000 to $170,000 per year, for the
"general promotion of retail trade activities" as recommended by a committee of
merchants who pay thIs assessment It compnses an area of responsibility covenng the
downtown from Ocean Avenue to Seventh Street, and from the Santa MOnica Freeway to
a line 200 feet northwesterly of the center line of Wilshire Boulevard
The Bayslde District Corporation has a different structure and scope of effort than the
CBD, but Its overall misSion IS similar, and ItS area of responsibility IS located WIthin the
CBD Bayslde IS a non-profit, public-benefit corporation, which was Incorporated as
Third Street Development Corporatton on May 31, 1984, for the purpose of revitalizing
the area formerly known as "The Third Street Mall" and nearby areas, now known as the
Bayslde District The Bayslde District extends from First Court to Fourth Court, and from
Wilshire to Broadway, encompassing the Third Street Promenade, and thus comprises a
Significant portion of the CBD BUSiness license holders Within the Bayslde Dlstnct pay
an Operations and Maintenance Fee through an assessment district established In 1986,
generating total receipts of approximately $525,000 per year Retail merchants Within
the Bayslde also pay the CBD assessment CBO funds received from the Bayslde
merchants form a Significant portion of the total CBO assessment momes received
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Bayslde's Board members are appointed by City Council Its operating budget IS funded
by the City The Operations and Maintenance Fee assessed upon business license
holders within the Bayslde Dlstnct to pay for supplemental operations and maintenance
currently generates approxImately $525,000 per year paid directly to the CIty
The merger of organizations with sImilar purposes but different structures and sources of
funding IS a model that has occurred throughout the country, as different business
Improvement organizations and assessment dlstncts discover that economies of scale
and shared resources can bring benefIt to a wIder area wIth greater effiCIency and
effectiveness The combined successor organization prOVides leadership, program
management, and Innovation to undertake a vanety of downtown Improvement programs
The Downtown San Diego PartnershIp, which resulted from the merger of their Central
City Association, a Business Improvement Dlstnct, with San Dlegans, Inc , a property
owner's orgaOlzatlon, IS one example Other mergers Include Sacramento Partnership,
Downtown Denver Partnership, Inc, the Association for Portland Progress, the
Downtown Stockton Alliance, Downtown Billings Partnership, and many others These
organizations administer a variety of funding sources and contractual responsibilities
within their areas of Junsdlctlon
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DISCUSSION
Ba_vside / CBD Merger
DUring calendar 1997, the Santa MOnica Chamber of Commerce, Its Central Business
District Committee, and the Bayslde District Corporation engaged In diScussions
regarding the potential merger of the Bayslde and the CBD They determined that these
two groups of Similar purpose could and should be merged under a single, staffed entity
It was anticipated that this actton would expand the benefits of the revitalization,
promotion, and management expertise of Bayslde's Board and Staff to the larger
downtown area
The merger diScussions eventually led to approval In concept by all parties The
Chamber of Commerce Board of Directors voted to support the merger plan on August
26, 1997, following diScussion with the members of ItS Central Business District
Committee On October 23, 1997, the Bayslde Board of Directors voted to support the
concept of the merger proposal Bayslde staff was directed to work wIth City staff to
develop an outline of a proposed Service Agreement which would Incorporate the merger
and c1anfy Bayslde's roles and responsibilities wlth,n the new, expanded dlstnct On
January 22, 199B, staff proposed an outline of a draft Service Agreement and the
Bayslde Board reaffirmed ItS support for the proposed merger according to the terms of
the draft Service Agreement
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New Bays/de SeNices Agreement
It IS proposed that Bayslde contmue as the survlvmg entity, and administer the CBD funds
for the CBD Business Improvement Area The assessment levies for both the CBD and
Bayslde would remain unchanged The Service Agreement between the City and Bayslde
would be amended to Include the larger CBD boundaries and define the specifiC roles the
organization would play In each These roles would be structured along a BUSiness
Improvement District model In which Bayslde administers the funds It receives, serves as
an advocate for merchants and property owners, and as an adVISOry body to the City
Attachment "A" IS an outline of a proposed ServIceS Agreement between the CIty & Bays/de
The City's Resource Management Department would perform rent collection and other
property management functions for City-owned property Within the Bayslde District City
Departments such as Planmng and Community Development would keep Bayslde Informed
of applications for pnvate development occurring Within the District, however, Bayslde Will
have no formal review authOrity over such applications Because of the extensive onslte
coordinatIon reqUired, filmmg and events management would be faCilitated by Bayslde and
certain filming and speCial event fees would be retained by Bayslde In addition to Its annual
budget appropriation by the City CounCil
Bays/de Board Appomtments
Bayslde currently has three vacancies on Its Board DUring the merger discussions With
the CBD, partiCipants recommended that Bayslde manage the CBD funds With the adVice
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of a committee of CBD assessees CBD leaders also felt that the Bayslde Board should
Include representation by CBD assessees whose businesses were located outside the
boundaries of the Bayslde District Staff recommends that the City CounCil consider the
appointment of CBD assessees from outside the Bayslde District to the current vacancies
on the Bayslde Board The ratio of Board members (3 of 11) approximates the ratio of
funds raised by the CBD assessment compared to the Bayslde merchant assessment
(approximately $167,000 and approximately $525,000 respectlvely)
BUDGET/FINANCIAL IMPACT
There WIll be no additional budgetary Impact resulting from the recommended actions
The current budget appropriatIon for the Bayslde Dlstnct Corporation, together with the
Service Agreement's contractual authority to administer the CBD assessment funds, Will
be suffiCient to Implement the staff recommendations
RECOMMENDATIONS
Staff recommends that the City CounCil approve In concept the merger between the
Bayslde Dlstnct Corporation (Bayslde) and the Central Business District (CBD) Staff
also recommends that the City Manager be authOrized to negotiate and execute a new
Services Agreement between the City and Bayslde to reflect the roles and
responsibilitIes anticipated by the merger, With such Agreement to be substantially
Similar to Attachment A to this report, and to terminate the contract presently In place
between the City and the Santa Momca Chamber of Commerce With regard to momes
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collected from the CBD, as of the commencement date of the new Bayslde Services
Agreement.
Prepared by
Jeff Mathieu, Director of Resource Management
Howard Robmson, Economic Development Manager
Gwen Pentecost, Sr Admin Analyst, Economic Development
Attachment "A"
Outline of Services Agreement between City of Santa
MOnica and Bayslde DIstrict CorporatIon
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Attachment "A"
Outline of ProDosed Service Aareement
between
City of Santa Monica and
Bayside District Corporation
1..c Bayside Roles and Responsibilities
The Bayslde District Corporation ("BDC") shall be responsible for promoting the
continued economIc revitalizatIon of the Downtown and shall be responsIble for
programs, projects, and servIces that benefit Santa Monica reSidents, Downtown
merchants, property owners, customers and VISitors Without limiting the generality of the
foregoing, and to the extent these duties are funded by the vanous business
Improvement areas, contracts, and other sources of funding received, the BDC shall be
responsible for
a Organizing, adVISing, and/or conducting marketing and advertiSing campaigns for the
benefit of the Downtown,
b Organizing, adVISing, and/or conducting promotions and special events that attract
and benefit local reSIdents, customers, and vIsitors to the Downtown,
C AdVISing the City regarding long-term planning and zOning Issues, retail miX,
streetscape and capital Improvement projects, public parking projects, sl9nage, speCific
discretionary planning and zomng cases, and developmental strategIes In order to
enhance the economic Vitality of the Downtown to benefit local reSIdents and continue as
a community resource,
d ASSisting In the Identification, locatIon and development of new bUSinesses In the
Downtown that Will enhance ItS economic Vitality
e AdVISing the City on operational Issues Involved In management of the Downtown,
including, but not limited to, leaSing and management of City-owned Property,
maintenance and security concerns, parking operations, vending cart operations, outdoor
dining, and the City'S Farmers' Market program
f OrganIzing and faCIlitating filming and special events In the Downtown,
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g AdvIsing merchants, property owners, and others having a business Interest In the
Downtown on matters of Interest,
h Serving as a liaison with the City on behalf of merchants, property owners, tenants
leasing City-owned real estate, and the general public on Issues affecting the continued
vitality of the Downtown, and
I Serving as Ilaison with other local governments and profeSSional organizations seeking
information on the development or current operations of the Downtown
J Upon request of merchants, property owners, or reSidents Within the Downtown,
advIsing the City on vanous means of proViding funding and Implementation of additional
measures of service In the Downtown that are not covered by the assessment dlstncts
and bUSiness Improvement areas In place as of the date of thiS Agreement,
k Submlttmg an annual Work Plan to the CIty Manager for revIew and approval The
expected level of service to be prOVided Bayslde, the Downtown, and any speCial
bUSiness Improvement or assessment area contemplated Will be defined In the annual
Work Plan
I Administering or prOViding enhanced services and other activities for the Downtown as
determined by the BDC staff and Board of Directors consistent With the Work Plan
2. City's Roles and ResDonsibilities:
The City shall support the BDC In Its stated role and responsibilities and, In addition to ItS
normal responSibilities as a mUniCipal government, shall be responSible for
a Maintenance of public areas, capital Improvements In public areas, and other
governmental services
b The funding of approved projects and programs for the Downtown, In such amounts as
the City In It sole discretion determines necessary and appropnate
c Management of capItal projects
d The review of governmental permit applications and approval of appropnate
applications
e In ItS role as property manager, admlnlstenng the leases and licenses for the City'S
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Leasehold and Licensed Space Within the Downtown
f Seeking advice from the BDC on those Items Identified In Section "A" above so the City
may avail Itself of the knowledge and expertise of BDC In tts advIsory role on behalf of
the Downtown
g Written notification to BDC when applications are sought for various activIties within
the Downtown, and primarily the Bayslde District, including, but not limited to fIlming and
special events, projects requIring Planning Commission reView, slgmficant Architectural
ReVIew Board applicatIons, and certain construction-related permits With an Impact on
the Downtown, such as construction permits for exterior work, public works permits, and
street use permits
h Payment to the BDC of all funds received pursuant to Ordinance No 725 (CCS)
establishing the Central BUSiness Dlstnct BUSiness Improvement Area, save and except
the sum of Five Percent (5%) thereof, which shall be retained by the City to cover costs
of collection
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