SR-213-008
Santa Monica, California
F:\RESOURCE\SHARE\GWENSH\STAFREPT\PicoBID2.doc
Council Meeting: February 22, 2000
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation That the City Council Adopt a Resolution
Declaring its Intention to Establish a Parking and Business
Improvement Area in the Pico Boulevard Area beginning July 1,
2000, for the Purposes Set Forth in Ordinance No. 1845 (CCS), to
Provide for the Levy of an Assessment Therein, and to Set a Public
Hearing for March 28, 2000, for the Purpose of Hearing Testimony.
Introduction
This report recommends that the City Council adopt the attached resolution
declaring its intention to establish a Parking and Business Improvement Area
(BIA) in the Pico Boulevard area beginning July 1, 2000, for the various purposes
set forth in Ordinance No. 1845 (CCS), to provide for the levy of an assessment
therein, and to set a public hearing for March 28, 2000, for the purpose of
hearing testimony about the proposed district.
Background:
Ordinance No. 1845 (CCS), which represents an amendment of Ordinance 1606
(CCS) passed in 1991, gives the City the right to impose an assessment on
businesses within a Parking and Business Improvement Area, and defines
purposes for which the funds may be used. These uses include (a) “the
acquisition, construction or maintenance of parking facilities, benches, trash
receptacles, street lighting…and similar improvements for the benefit of the area,
(b) decoration of any public place in the area; (c) promotion of public events
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which are to take place on or in public places in the area, including the provision
of security for such public events; (d) furnishing of music in any public place in
the area, (e) the general promotion of commercial trade activities in the area; (f)
activities to manage traffic generated by employees and customers of
businesses within the area; and (g) security operations.
Parking and business improvement areas have been operating for a number of
years on Main Street, Montana Avenue, and in the Bayside District. This is the
first BID to be considered for the Pico area.
In order to identify problems and perceptions affecting them, Pico businesses
were surveyed in March, 1999. Results showed that 87% of responding Pico
businesses are independently owned, and 38% gross less than $250,000 per
year. A majority of responding businesses (62%) reported that, although their
income stayed about the same or decreased over the previous year, 70% faced
increases in their cost of wages paid to employees in the same period, 62% were
affected by rising costs of supplies and raw materials, and 51% were affected by
increased costs of complying with governmental regulations and permits, taxes,
licenses, and fees. 50% of those responding said they found technical positions
the most difficult to fulfill. A majority identified chief external problems as a
shortage of on-street parking (51%) and off-street parking (50%), and graffiti
(47%). They identified improvements needed in customer and employee
parking, and desired coordination of advertising and promotions, and a
newsletter, all of which are within the scope of uses allowed by Ordinance 1845
(CCS) for business improvement areas or districts (BIDs).
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Sales tax data shows that three largest business sectors on Pico are restaurants,
service stations, and auto repair shops. It also corroborates business
perceptions of slow sales in recent years. Although the services provided by
these businesses helped them to hold their ground during the recession, since
1995 gross sales on Pico have lagged behind the City-wide average. The most
recent figures show that 1998 gross sales on Pico Boulevard decreased 0.7%,
while the City average increased 4.7% for the same period.
Following a multi-year planning process, the Pico Streetscape Improvement
Project completed construction of significant public improvements designed to
bolster pedestrian activity and increase business viability along the Pico
Boulevard corridor in December, 1999. The crosswalk project, scheduled for
completion in April, 2000, will complete the $7.5 million effort. As part of the
streetscape construction, a business outreach coordinator was hired through the
Westside Small Business Development Center to work with the Pico businesses
on construction mitigation and assist them with business improvement
techniques and resources. Construction phasing was well-coordinated, and to
date, 11 businesses have taken advantage of $440,000 in SBA loans for
improving their businesses, and 51 applications are in process for an estimated
$3 million in additional business improvement loans.
Discussion
Visioning meetings with Pico businesses began mid-1999. Concurrently, studies
were being undertaken by the City’s Transportation Management Division in
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response to petitions for preferential parking districts which either had been
submitted or were circulating in the residential areas immediately adjacent to the
east end of Pico Boulevard due to the effects of customer and employee parking
in their neighborhoods. A number of businesses along Pico Boulevard realized
they needed to resolve these issues in concert with their residential neighbors,
coordinate business improvement activities, and promote Pico businesses in a
more focused manner if the businesses were to remain and prosper. In
September, thirty businesses and property owners formed the Pico Improvement
Association (PIA) to address these needs, beginning with parking problems on
the east end of Pico Boulevard.
The PIA recognized that similar needs existed along Pico Boulevard, and wished
to hire staff to accomplish these goals beginning with Fiscal Year 2000-2001. To
date, they have utilized City staff and the Business Outreach Coordinator
provided through the Westside Small Business Development Center grant in
order to handle the many details required to address these issues. In working on
parking agreements on the east end of Pico, the PIA also recognized that the
formal organization of a BID administered through the Santa Monica Chamber of
Commerce was critical to establish and stabilize certain parking mitigations.
Accordingly, after several meetings to develop BID parameters, budgets and
formulas, on January 12, 2000, the PIA voted unanimously to initiate a Business
Improvement District beginning with the Fiscal Year 2000/2001 billing of business
license tax, and proposed a formula for the annual assessment as follows: For
retail, hotels and motels, a sliding scale equivalent to the business license fee up
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to an annual maximum of $1,000; and for non-retail, a fixed fee of $100 per year.
For auto-related retail, service stations, and repair shops, the annual fee would
be the equivalent of the business license fee, but with a maximum of $500 per
year. The minimum for all business license holders would be $100 per year.
This formula will generate approximately $80,000 per year, billed annually by the
Business License Office in conjunction with its business license renewal cycle.
The proposed sliding scale formula is similar to the formulas of the Main Street
and Bayside BIDs, although those BIDs have different maximum payments, or
caps. The Montana BID formula is currently a flat fee; however, the Montana
Merchants’ Association is also considering a change to a sliding scale based on
business license fees.
The Pico BID proposed would consist of all business license holders doing
business in properties with a property line bordering Pico Boulevard from the
beach to the City limits at Centinela. For the purposes of this BID, commercial
property rentals are included due to the emphasis on parking, but other
residential/apartment rentals and individual taxi licenses are excluded.
The Pico Improvement Association held five public meetings in December, 1999
and January, 2000, including two specifically inviting Pico businesses to discuss
formation of business improvement district, formulas for assessment, and uses
for these funds. In addition, On January 12, 2000, the PIA mailed petitions to
every business license holder on Pico Boulevard, asking for their support of a
new BID. On February 3, 2000, the PIA advised City Staff that approximately
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thirty Pico businesses and property owners responding to date had signed the
petition supporting the formation of the Business Improvement District, and
requested that the City proceed with the public hearing for establishment of the
Pico Business Improvement District. Since that date, the PIA Board of Directors
has been following up with business owners either in person or by mail,
telephone, or email. To date, neither City staff nor the PIA members soliciting
petitions have heard opposition to the formation of the BID.
The BID funds received, less 5% retention by the City for collection expenses,
will be administered by a contract with the Santa Monica Chamber of Commerce
as it does currently for the Main Street and Montana BIDs. Anticipated uses of
these funds include provision of a staff person to solve parking problems,
improve neighbor relations, and solve other major issues facing Pico businesses.
A website, newsletter, and targeted promotions are also expected to be chosen
by the budget committee once the BID is formed.
Budget/Financial Impact
The proposed business improvement district fees from Pico merchants and
property owners are projected to be approximately $80,000 per year. This will be
included in the FY 2000/01 budget. The 5% retention by the City would be
approximately $4,000. Staff calculates this amount would be sufficient to cover
administrative costs associated with printing, postage, and billing, as it would be
done concurrently with the Business License renewal. There would be no other
financial/budgetary impacts.
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Recommendation
City staff recommends that the City Council adopt the attached resolution
declaring its intention to establish a Parking and Business Improvement Area
(BID), in the Pico Boulevard area beginning July 1, 2000, for the various
purposes set forth in Ordinance No. 1845 (CCS), to provide for the levy of an
assessment therein, and to set a public hearing on March 28, 2000, for the
purpose of hearing testimony about the proposed district.
Prepared by: Jeff Mathieu, Director, Resource Management Department
Mark Richter, Economic Development Division Manager
Gwen Pentecost, Sr. Admin. Analyst, Economic Development
Attachment: Resolution of Intention
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