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MAR 2 3 1999
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Councd Meeting March 23, 1999 Santa Monica. California
TO Mayor and City Counal
FROM City 5taff
SUBJECT Recommendation That the City Councd Adopt a Resolution Declaring iis
Inte~tion to Modify and Amend the Mam Street Business Improvement Area
Assessment Distnct, Set a Public Heanng For Apnl 13. 1999, and Repeal
Resolution Num6er 9018 (CCS) Which Set an Earlier Public Hearing For This
Purpose
IntroductioIl
This report recommends that the City Council adopt the attached resolution deciaring its
intenUon to modrfy and amend the Ma~n Street Business Improvement Area, set a pubhc
hearing for first reading of the proposed ordinance on Apnl 13, 1999, and repeal
Resolution Number 9018(CCS), which set an earlier public heanng for this purpose on May
14. 1996
Backaround
At the request of the businesses on Mam Street a Business Improvement Area ("BIA") was
created in 1984 Under its terms, retad busmess owners are assessed each May 15th the
amount of one tenth of one percent of total taxable sales for the purposes of general
promotion of busmess activities in the area The boundaries of the Main Street BIA were
defined as follows 'Busmesses located on property bordering on either side of Main
Street from Pico Boulevard on the north to the south city limits on the south and on either
' ~M
MAR 2 3 199,g
side of Ocean Park Boulevard, Hdl Street, Ashland Avenue, Kinney Street, P~er Avenue.
and Manne Street between Nedson Way on the west and Second Street on the easY' The
ordinance was amended on December 11, 1984, by Resolution No 6954 (CCS) and again
on February 12, 1985 to mciude non-retail businesses, except those operating under a
home occupation permit Non-retad businesses were reqwred to pay a flat fee of $25 00
per year
On Apnl 9, 1996, in accordance with Ordinance Number 1606 (CCS) (as amended by
Ordinance Number 1845 (CCS)), the City Council adopted Resolution No 9018 (CCS}
declanng its mtention to adopt new fees for the Main Street Business Improvement Area,
and set a public hearing on its establishment for May 14, 1996
The public heanng did not occur on May 14, 1996 as scheduied, due to its inclusion with
other Main 5treet issues, and the Main Street BIA has remained unchanged since 1985
it generates approximately $46,000 00 per year, billed annuaily by the Business License
Office on or about April 15 m a cycle separate from the annual Business License renewal
cycle The funds recewed, less 5% retention by the City for collection expenses, are
administered by a contract with the Santa Monica Chamber of Commerce
Discussion
The Mam Street Merchants Assoaation, the subcommittee of the Chamber which oversees
expenditure of the funds collected under the Main Street BIA, has determined that the
~
amount of funds received and the methods of collection separate from the business license
cycle are inadequate to properly promote business ~n the area and provide supplementai
services necessary to attract customers and businesses to Main Street
Accordingly. on January 27, 1999, at a General Meeting of Main Street Merchants
AssoaaUon, the Board of Directors mtroduced a ballot asking Main Street busmesses to
mdicate whether they would be in favor of increasmg the BIA fee and billing cycle The
new BIA fee for retaders wouid increase to the equivalent of one time the busmess license
tax ($75 00 plus $1 25 per each $1,000 00 of total gross receipts in excess of $60,000 00
instead of 1/10 of 1% of total taxable sales which equals $1 00 per each $1,000 00) The
maximum BIA fee for retail businesses would be increased to $2,000 00 from $1,000 00
per year The maximum BIA flat fee for non-retail businesses would be increased from
$25 00 per year to $100 00 per year The boundaries of the Main Street BIA would remain
the same
Under the amended BIA, the Main Street BIA fee would be billed and collectible with the
Business License Tax paid by each bus~ness license holder. rather than a separate billing
at a different time of year
The Mam Street Merchants Association advised City Staff on March 10. 1999 that a
ma~ority of Main Street busmesses respondmg support the new rate and method of
collection On March 10, 1999, the Mam Street Merchants Assoaation requested that the
City proceed with amendmg the Mam Street Bus~ness Improvement Area based on the
formulas and method of collection outlined above
Staff evaluated the issue of whether a BIA with fees paid by busmess owners is sub~ect to
Prop 218, and determined that it was not The issue of whether Prop 218 applies to BIA's
is being Id~gated in San Diego The lower court has held that Business Improvement Areas
are not sub~ect to Prop 218, but this decision has been appealed While the appeal
presents some nsk. staff's assessment is that this nsk is minimal
Budaet/Finanaal impact
The proposed business improvement area fees from Main Street merchants are pro~ected
to be approximately $91,500 00 per year annually The 5°/a retention by the City would be
approximatefy $4,575 00 which staff calculates would be suffic~ent to cover administrative
costs assoaated with pnntmg, postage, and bdling, as this would be done concurrently with
the Bus~ness License renewal There would be no other finanaallbudgetary impacts
Recommendation
City staff recommends that the City Councd adopt the attached resotution declanng its
mtention to modify and amend the Mam Street Busmess Improvement Area, set a public
heanng for first reading of the proposed ordinance on Apnl 13, 1999, and repeal
Resolution Number 9018(CCS), which set an eariier public heanng for this purpose
4
Prepared by Jeff Mathieu. Director. Resource Management Department
Gwen Pentecost. Sr Admin Analyst. Economic Development D~v
Attachment Resolution of Intention
Resolution Number 9018 (CCS)
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City Counal Meeting 03-23-99 Santa Monica, California
RESOLUTION NUMBER 9381 (CCS)
(CITY COUNCIL SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DECLARING ITS INTENTION TO MODIFY AND AMEND THE MAIN STREET
BUSINESS IMPROVEMENT AREA ASSESSMENT DISTRICT AND REPEAL
RESOLUTION NUMBER 9018 (CCS)
WHEREAS, on Apnl 10, 1984, the City Council adopted Ordmance No 1303 (CCS)
which established a Main Street Busmess Improvement Area and authorized the City
Council to levy an assessment on business located within the boundaries of such Main
Street Business Improvement Area, and
WHEREAS, the City Counal of the C~ty of Santa Monica proposes to modify and
amend the Business Improvement Area for the Main Street commeraal area as more
particularly described herein, and
WHEREAS, Ordinance Number 1606 (CCS) of the City of Santa Monica, adopted
November 26, 1991, as amended by Ordinance Number 1845 (CCS), adopted March 19,
1996, (hereinafter collectively "Ordinance No 1606") sets forth the procedures governmg
Business Improvement Areas within the City, and
WHEREAS, it has been determined by the City Councd that proceedmgs be
commenced in accordance with Ordinance No 1606 for the modification and amendment
of the Main Street Business improvement Area and the levymg of assessments pursuant
to Ordmance 1606 and
WHEREAS, on April 9, 1996 the City Council adopted Resolution Number 9018
deciarmg its intention to modify and amend the Main Street Busmess Improvement Area,
and
WHEREAS, no further proceedings were taken under Resolution Number 9018
(CCS) to modify and amend the Mam Street Business Improvement Area, and
WHEREAS, the City Council of the City of Santa Monica now proposes to take steps
necessary to modify and amend the Mam Street Business Improvement Area,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY RESOLVE AS FOLLOWS
SECTION 1 Resolution Number 9018 (CCS) is repealed in its entirety
SECTION 2 The City Counal hereby declares its intention to modify and
amend the Main Street Busmess Improvement Area ("Main Street BIA") which comprises
businesses located on property bordering on either side of Mam Street from Pico Boulevard
z
on the north to the south city limits on the south and on either side of Ocean Park
Boulevard, Hill Street, Ashland Avenue, Kinney Street, Pier Avenue, and Marine Street
behveen Nedson Way on the west and Second Street on the east
SECTION 3 The assessments levied within this proposed Main Street BIA
shall be used for any of the following purposes
1) Operation and maintenance of the capital improvements to be constructed
pursuant to ihe Main Street Streetscape Improvement Plan, and
supplemental operation and maintenance activities within the Main Street
BIA as required
2) General promotion and marketing of commercial trade activities within the
Main Street BIA, promotion of pubiic events and decoration of any public
place in the area
3) Any other purposes allowable under Ordinance 16o6
SECTION 4 This modification and amendment of the Main Street BIA shall
become effective upon adoption of an ordinance pursuant to Ordinance 1606 Ali
assessments due under this Main Street BIA shall be payabie concurrently and at the same
time as the general business license tax For failure to pay said assessments on the due
date thereof, penalties shali be exacted as set forth in Section 6 04 160 of the Santa
3
1
Monica Municipal Code
SECTION 5 That an assessment wdl be levied against all persons or entities
operating a business establishment within such proposed Main Street BIA For fees due
July 1, 1999 and thereafter, unless amended by the City Councd, the Main Street Busmess
Improvement Area assessment will be a fee equivalent to the following
Business Assessment Annual
Classification Eee Amount Maximum
Retail 1 x Business License Tax' $ 2,000 00
Recreation and $100 00 Flat Fee $ 100 00
Entertainment
AgenUBroker $100 00 Flat Fee $ 100 00
Auto Dealer $100.00 Flat Fee $ 100 00
Contractor/Subcontractor $100 00 Flat Fee $ 100 0~
Co rpo ra te/Ad m m istrative
Headquarters $100.00 Flat Fee ~ 100 00
Professions $100 00 Flat Fee $ 100 00
Manufacturers $100 00 Flat Fee S 100 00
Services $100 00 Flat Fee $ 100 00
Whofesalers $100 00 Flat Fee $ ~00 00
Utilities $100 00 Flat Fee $ 100 00
*Business License Tax rates are set forth in Article 6 of the Santa Monica
Municipal Code
4
SECTION 6 The assessment shall not apply to any person operating a
business from his or her principal place of residence within the Main Street BIA and for
which a home occupation permit has been issued m accordance with the provisions of
Article IX of the Santa Monica Muniapal Code
SECTION 7 The improvements and actroities to be provided in the area will
be funded by the levy of assessments descnbed m Section 5 above The revenues from
such assessments shall be used exclusively within the Main Street BIA descnbed herein,
and shall not be used to provide improvements or activities outside such BIA
SECTION 8 A public hearing on the proposed Main Street BIA will be held
at 7 00 p m on Tuesday Apnl 13, 1999 , or as soon ihereafter as the matter may be heard,
m the temporary City Counal Chambers located at the Main Library Auditorium at 1343 6th
Street, Santa Monica, Califorrna At such public hearing, the City Council will hear public
testimony on the proposed Main Street BIA, mcluding any protests and ob~ections to the
BIA
SECTION 9 That notice of such public hearing shall be published and mailed
in accordance with Section 8 of City Ordinance 1606 (CCS) A copy of Ordinance 1606 is
on file in the office of the City Clerk
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SECTION 10 The City Clerk shall certify to the adoption of this
Resolut+on, and thenceforth and thereafter the same shall be in full force and effect
APPROVED AS TO FORM
I ,~/ `-'~-~`""- ~~
I; , `.
~ ITY ATTORNEY
Adopted and approved this 23rd of March, 1999
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P m O'Connor, Mayor
I, Mana M Stewart, City Clerk of the City of Santa Monica, do hereby certify that
the foregoing Resolution 9381 (CCS) was duly adopted at a meeting of the Santa
Monica City Councd held on the 23rd of March, 1999 by the following vote
Ayes Councdmembers Feinstein, Genser, Holbrook, McKeown,
O'Connor, Rosenstein
Noes Councilmembers None
Abstain Councdmembers None
Absent Councilmembers None
ATTEST
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Mana M Stewart, City Clerk
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City Councll Meetlnq: Apr~l 9, 1996 Santa Monica, Callfornia
RESOLUTION NUMBER `~G'(?~ (CCS)
(CITY COUNCZL SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SANTA MONICA DECLARZNG ITS INTENTION TO
ESTABLISH A MAIN STREET BUSINESS IMPROVEMENT AREA
w~HEREAS, the City Council of the City of Santa Monica
proposes to establish a new Business Improvement Area for the
Main Street commercial area as more particularly described
herein; and
WHEREAS, the Ci:y Council, on November 14, 1995, directed
staff to prepare a Resolution of Intention to establish a Main
Street Business Improvement Area, and
WHEREAS, in preparation for the proceedings relating to
such Resolution, staff caused to be prepared a financial
consultant's report (hereinafter "Report") to provide analysis of
the proposed Business Improvement Area; and
WHEREAS, Ordinance 1606 of the City of Santa Monica,
adopted November 26, 1991, as amended by Ordinance 1845, adopted
March 19, 1996,(hereinafter "Ordinance 1606") sets forth the
procedures by which new Business Iaprovement Areas may be farmed
wlthin the C1ty; and
WHEREAS, i~ has been dete`-mined by the C~ty Council that
proceedings be commenced for the formation of such Business
Improvement Area and the levying of assessaents pursuant to City
Ordinance 1606 (as amended by Ordinance 1845);
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY RESOLVE AS FOLIAWS:
SECmION 1. That thls C1ty Council hereby declares its
intention to establish a Business Improvement Area ("BIA") which
shall be comprised of all commercially zoned parcels within that
area bounded on the north by Pico Boulevard, the west by Neilson
way, the south by the southerly city limit, and the east by
Second Street and an imaginary line extending Second Street north
to Pico Boulevard, a map of which is included as Exhibit D to the
Report and inccrporated herein by reference.
SEC:ION 2. That the assessments levied within such
proposed BIA shall be used for any of the followinq purposes:
1) Operation and maintenance of the capital improvements
i
to be constructed pursuant to the Main St:eet
Streetscape Improvement Plan, and supplemental
operation and maintenance activities within the Main
Street BIA as requlred.
2) General promotion and aarket~nq of coaaercial t:ade
activities within the BIA, promotion oP oublic events
and decoration of any public place in the area.
3) Any other purposes allowable under Ordinance 1606.
SECTION 3. That this BIA shall become effective on
January 1, 1997. All assessments due under such BIA shall be
payable concurrently and at the same time as the general buslness
license tax. For failure to pay said assessments on the due date
thereof, genalties shall be exacted as set forth in Section
6.04.160 oP the Santa Monica Municipal Code.
SECTION 4. That an assessment will be levied against all
person or entities operating a business establishment within such
proposed Main Street BIA. For fees due July 1, 1997, the Main
Street BI~ assessment will be a fee equivalent to the following
(all fees calculated on calendar 1996 gross receipts):
Business
Cl
ifi
ti Assessment
A
t
F Annual
t~ri
~ Annual
y
ass
ca
Retail ee
moun
on
o.l~ of Gross Receipts m~
n
$25.00 ~
~ym
$1,000.00
All Others $25 flat fee $25.00 $25.00
t
,
For fees due July 1, 1998, and thereafter unless amended by City
Council, the Main Street BIA assessaent wi~l be a fee equivalent
to the following (all fees calculated on gross recei~ts for the
preceding calendar year):
Business Assessment Annual Annual
Classification Fee ?~mount Minimum Mav,.~„m
Retail 0.2~ of Gross Receipts* $200.00 $3,000.00
All Others 0.1$ of Gross Receipts* $200.00 51,000.00
*Gross Receipts is defined in Santa Monica Municipal Code,
Article 6, Sectlon 6.Q4,~10 (d).
SECTION 5. That the improvements and activities to be
provided in the area will be funded by the levy of assessments
described in Section 4 above. The revenues from such assessments
shall be used exclusively within the BIA described herein, and
shall not be used to provide improvements or activities outside
such BIA.
SECTION 6. That the City Council hereby finds and
deelares that the businesses and the property within the proposed
BIA will be benefitted by the improvements and activities funded
by the assessments proposed to be levled.
SECTION 7. That a public hearing on the e5tablishment of
the proposed Main Street BIA will be held on Tuesday, May 14,
1996 at 6:30 p.m. in the City Councll Chambers, 1685 Main Street,
Santa ?Sonica, California. At such public hearing, the City
Council will hear public testimony on the proposed BIA, including
any protests and objections to the establishment of such BIA.
SECTION 8. That notice of such public hearing shall be
published and mailed in accordance wlth Section 8 of City
Ordlnance 1606. A copy of Ordinance 1606 is on file in the
office of the City Clerk of Santa Monica.
SECTION 9. The City Clerk shall certify to the adoption
o£ this Resolution, and thenceforth and thereafter the same shall
be in full force and effect.
APPROVED AS TO FORM:
J ^~ I - ~'~-~4/~ '"~°"~{ ~
MARSHA JONES MOUTRIE
City Attorney