SR-213-008 (4)
F:\RESOURCE\SHARE\GWENSH\STAFREPT\PicoBID1StRd3.WPD
Council Meeting: March 28, 2000 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation: 1) That the City Council Hold a Public Hearing and
Introduce for First Reading an Ordinance to Establish the Pico Boulevard
Business Improvement District and to Provide for the Levy of an Assessment
Therein; and 2) That the City Manager be Authorized to Negotiate and
Execute a Contract with the Santa Monica Chamber of Commerce to
Administer the Funds Collected Through This Assessment.
Introduction
This report recommends that the City Council hold a public hearing and introduce for first
reading the attached ordinance to establish the Pico Boulevard Business Improvement
District and to provide for the levy of an assessment therein. It also recommends that the
City Manager be authorized to negotiate and execute a contract with the Santa Monica
Chamber of Commerce to administer the funds collected through this assessment.
Background and Discussion
According to a survey taken in 1999 during the Pico Streetscape Improvement Project, the
Pico merchants and businesspeople have been struggling in recent years with stagnant
growth and rising costs of doing business. Parking, one of the problems cited in the
survey, became a critical issue during late 1999 with the pending formation of preferential
parking zones proposed for neighborhoods immediately adjacent to the commercial area
on the east end of Pico Boulevard. Similar situations already exist in other places along
Pico Boulevard. Hence, after several months of discussion and organizing efforts among
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the merchants and businesses of Pico Boulevard, on January 12, 2000, businesses of the
newly-formed Pico Improvement Association voted to request that the City proceed with
the establishment of a Pico Business Improvement District to allow Pico businesses to
raise revenues for improving parking, other business related issues and the general
promotion of business on Pico Boulevard. The proposed a formula for the annual
assessment was as follows: For retail, hotels and motels, a sliding scale equivalent to the
business license fee up 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.
On February 22, 2000, the City Council approved Resolution No. 9488, which declared its
intention to establish the Pico Boulevard Business Improvement District (BID), and set a
public hearing for first reading of the proposed ordinance on March 28, 2000.
Similar parking and business improvement areas have been operating for a number of
years on Main Street, Montana Avenue, and in the Bayside District. The Santa Monica
Chamber of Commerce administers the funds received for the Main Street and Montana
business improvement areas, and provides administrative support, bookkeeping, liability
insurance, payroll reporting service, and other functions necessary to administer these
districts, and has assisted in the formation of the Pico BID.
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Ordinance 1606 (CCS), which authorizes the City to impose assessments on businesses
within a parking and business improvement area and establishes the requirements and
procedures for establishing or amending such BIDs, requires that notices be mailed and
published regarding the resolution of intent and a public hearing be held. Staff has
prepared and mailed notices regarding this public hearing to affected Business License
Holders within the area of the proposed Pico Boulevard BID and published the Resolution
of Intent No. 9488 (CCS) more than ten days in advance as required by Ordinance No.
1606 (CCS). No formal protests to the proposed BID have been received by the City Clerk
as of March 17, 2000, and only one has been received by the Santa Monica Chamber of
Commerce.
Questions have been raised regarding how to best assist those businesses which are new
or grossing less than $20,000 income. Staff has considered this issue and researched the
impact of changing the fees for these small and low revenue-producing business license
holders, and recommends the following: that business license holders pay half the
proposed minimum, or $50.00 per year if they are new or grossed less than $20,000
during the year for which their business license renewal fee is calculated. This is a
reduction in fee from that published in the Public Notice and Resolution No. 9488 (CCS).
This change from the fees published in the Resolution of Intent would reduce the funds
collected from approximately $80,000 per year to approximately $74,500 per year. The
City would retain 5% to cover the costs of administration, before forwarding to the
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administering organization. The Santa Monica Chamber of Commerce, which administers
similar districts on Montana Avenue and Main Street, customarily retains an additional
10% to cover the costs of administration, support, and liability insurance, etc. The
proposed change in formula would reduce the net funds available for the Pico BID from
approximately $68,400 to approximately $63,700 after deductions by the City and the
Chamber of Commerce. This amount will increase as the Pico area becomes more
profitable.
BUDGET/FINANCIAL IMPACT
The revised business improvement district fees from Pico Boulevard merchants and
property owners are projected to be approximately $74,500 per year under this
recommendation. This figure will be included in the FY 2000/01 budget. The 5%
retention by the City would be approximately $3,725. Staff calculates this amount would
be sufficient to cover administrative costs associated with printing, postage, and billing.
There would be no other financial/budgetary impacts.
RECOMMENDATION
City staff recommends that the City Council introduce for first reading the attached
ordinance to establish the Pico Boulevard Business Improvement District Assessment and
to provide for the levy of an assessment therein. City staff also recommends that the City
Manager be authorized to negotiate and execute a contract with the Santa Monica Chamber
of Commerce to administer the funds collected through this assessment.
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Prepared by: Jeff Mathieu, Director, Resource Management Department
Mark Richter, Economic Development Division Manager
Gwen Pentecost, Sr. Admin. Analyst, Economic Development Div.
Attachment: Ordinance
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