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SR-213-005 " ,CM:JHA:PG . C~ty Council Meet g: July 12, 1983 .. Santa Monlca, California ~_~ 2/3-oo~- JUL 1 2 1983 TO: Mayor and Clty Councll FROM: City Staff SUBJECT: Creatlon of Business Promotional Dlstricts on Lincoln Boulevard and Maln Street Introduction This report describes a proposal for the creation of business promotional dlstrlcts on L1ncoln Boulevard and Main Street, and recommends that the City Councll direct the C1.ty Attorney to prepare ord1.nances to establish beneficial assessment d1strlcts in these areas. Background 81Dce early 1982, the Chamber of Commerce has been 1n discussion w1th Clty staff regarding the establishment of certain bUSlness promotional d1str1.cts. The purpose of such dlstrlcts 1S to levy assessments on all businesses w1thln a certa1n area to create a source of funds for common promot1onal activlties such as hollday ;' decoratlons, lncreased lighting, decorat1.ve bus benches, common area street improvements and so forth. The part1cular areas WhlCh would be formed lnto districts under this proposal are: --Both sides of Lincoln Boulevard bounded by Wllshlre Boulevard on the north and by the southerly City limits on the south; and II-a 1 Jill 1 ') ..~. "'... '" < I~ . . .. --Both sldes of Main Street and its side streets bounded by Neilson Way on the west, Thlrd Street on the east, Pico Boulevard on the north and Marlne Street on the south. These districts would be "beneficial assessment dlstricts" which would apply to tenants residlng wlthln the areas so designated. Such assessments are collected by the City through the Business License Tax collection. As formulated, the Chamber of Commerce would be responsible for the admln1stration of these funds, with the declslons on expenditures made by District Committees. Com~osition of Committees Each Distrlct would have lts expenditures governed by a D1strict Committee, which would be composed as follows: --four members who are merchants paying into the fund, to be selected by the Lincoln Boulevard and the Main Street Committees respectively of the Chamber of Commerce: and --one member to be selected by the Llncoln Boulevard and the Maln Street Committees respectlvely of the Chamber of Commerce 1n consultatlon wlth the City Manager's Office to represent citizens from the neighborhoods lmmediately adJacent to the Dlstrlcts. ~'\J.(. In addition to these ~QVGa voting members, two ex officio members of each Dlstrict Committee would be deslgnated as follows: 2 ~ , . . --one representatlve from the City staff, to be selected by the City Manageri and --one representative from the Convention and Visitors Bureau, to be selected by the Bureau Board of Dlrectors. The purpose of the participatlon of the Convention and Vis1tors Bureau is to malnta1n clear channels of cornmunicatlon 1n the planning and implementatlon of promotional events throughout the City. It is also staff's belief that the Conventlon and Visitors Bureau can be of substantlal assistance to the Dlstrict Committee 1n planning thelr promotional activltles. Amount of Assessments An assessment of one-tenth of one percent of total taxable sales would be lmposed upon businesses within the Districts, with an annual maximum beneficial assessment of $1,000, For any business not holding a reta11 sales tax permit, the assessment would be at the rate of $300 per year. Both the $1,000 cell1ng and the flat rate of $300 for businesses not holding a retall sales tax permit would fluctuate yearly based upon the Los Angeles/Long Beach Metropolltlan Area Consumer Prlce Index (CPI). Slnce this assessment would be based upon taxable sales of a business, it would neither affect nor be affected by the proposed lncrease in the bUS1ness license tax. 3 . . Administration of Funds The Clty would retaln 5% of the funds raised as administrative cost of collectlon. The Chamber of Commerce would be the party responslble for the admin1stration of the funds, and would have certain duties to the Clty and to the District Committees 1n thlS capacity. After the deductlon of the Clty'S adminlstrative costs of 5%, the Chamber of Commerce would receive between 10% and 20% of the remaining funds for its adminlstrative services. The approprlate percent will be determined through further discussions wlth the Chamber of Commerce, the City Manager and the Director of Flnance, and will be brought back to Council for approval as part of the ordinance presented for adoption. Duties of the Chamber of Commerce under this arrangement would 1nclude prov1ding meet1ng space for the Committees, malntainlng financlal records, lmplementing the decisions of the Committee regarding expenditures and reporting to the Clty on a regular basis on the activlties and finances on behalf of the District. Clty Overslght In order to malntaln general POllCY oversight and to ensure coordinatlon throughout the City of various promotlonal efforts, the District Committees will be required to present an annual operating and expenditure plan City for c(1""~ to the Manager ~f'[l~ This plan would outline the upcomlng fiscal year's promotlonal events and thelr cost and method of implementation. 4 4 . . Termination of the Assessment D~str~cts The merchants who are lnterested ln these beneficial assessment dlstr~cts are concerned that the program develop into a truly useful tool for common promotlonal actlvlties. Thus while requestlng the creation of these districts, they also wlsh to reserve the right to terminate the assessment program ~f desired at a later date with SlX months wrltten notlce. The City would share thlS option of appropriate notice to cancel the program. Slnce these Distrlcts are belng created at the request of and for the benefit of these businesses, staff does not obJect to these merchants retaining the right of termination upon reasonable notice. Recommendation It is respectfully requested that the Clty Council dlrect the City Attorney: 1. Prepare ordinances to establish beneficial assessment districts for bUSlnesses on Lincoln Boulevard and Maln Streets; and 2. Prepare related agreements to be executed with the Chamber of Commerce and Dlstrict Commlttees for the administration of these assessment funds. Prepared by: Peg Gardels Assistant to the Clty Manager 5