SR-410-001 (6)
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C/ED:EDD:ERF:mb
Council Meeting: July 15, 1986
Santa Monica, California
TO: Mayor and City Council
FROM: City staff
SUBJECT: Adoption of a Resolution by the City Council Declaring
Its Intention to Establish an Assessment District to
Provide for the Levy and Collection of Assessments to
Finance Improvements to the Third Street Mall and to
Establish a Fee to Cover the Costs of Operations and
Maintenance Within the District
INTRODUCTION
This staff report transmits a resolution declaring the city IS
intention to establish an assessment district for the Third
Street Mall to finance circulation, parking and public space im-
provements, and to establish a maintenance fee for the area in
order to provide for the cost of operations and maintenance. The
report also transmits a report prepared by Katz, Hollis, Coren &
Associates specifying the boundaries of the proposed district,
the proposed method of assessment, and the annual levy to be
charged against each property. It is staff's recommendation that
the Council adopt the attached resolution and report.
BACKGROUND
On July 8, 1986, the city Council adopted an ordinance specifying
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the powers and procedures for the formation of assessment dis-
tricts and the levying of assessments for the purpose of financ-
ing improvements in the city of Santa Monica. The primary pur-
pose of the ordinance was to initiate proceedings by which the
City could implement the financing program contained in the pro-
posed Mall Specific Plan and take full advantage of existing tax
exempt financing options available to the city which may be
threatened after september 1st when more limiting legislative
changes are scheduled to take effect.
The Plan recommends the establishment of an assessment district
to finance the proposed public improvements program. It also
provides that the City establish mechanisms by which to fund im-
proved and ongoing operation and maintenance expenses. These
recommendations are the outcome of staff and consultant consider-
ation of alternative financing options, meetings with area prop-
erty owners, merchants, Third street Development Corporation
(TSDC) Board members and staff, and open forums sponsored by the
TSDC and Chamber of Commerce for affected groups.
DISCUSSION
Pursuant to the city's adopted procedural ordinance regarding the
formation of assessment districts, the attached resolution states
the City's intention to determine that the public convenience and
necessi ty require improvements to be made in the area of the
Third Street Mall.
The accompanying report provides: (1) a general description and
specifications of the work to be undertaken and improvements to
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be madei (2) an estimate of the cost of the improvementsi (3) a
map indicating the boundaries of the assessment district, sub-
zones within the district and, by reference, each parcel within
the districti and (4) the proposed assessment for the cost and
expense of the proposed improvements. The report also specifies
the method for the assignment of the levy and the method of
collection.
Establishment of New Assessment District
since 1965 the Mall and surrounding area (geographically bordered
by First Court to Fourth Court, Broadway to Wilshire) have had
their parking needs serviced by the Downtown Parking and Business
Improvement District (DPBID). The District's parking facilities
were financed through the issuance of lease revenue bonds by the
City which are scheduled to be fully retired in 1992. The exist-
ing District receives revenues from two sources. Existing prop-
erty owners currently pay $0.56 per each $100 of assessed valua-
tion of land and improvements. Area businesses also contribute
based on a factor equal to five (5) times the City's Business
License Tax for the area.
Under the proposed financing program, the existing DPBID would be
eliminated and the City, through the use of previously reserved
capital funds for the Mall, would defease the existing bonds. A
new district would be created with geographic boundaries coter-
minous with the previous DPBID. The public improvements recom-
mended in the Mall Specific Plan would be financed through a new
annual levy to be charged each parcel based on the gross floor
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area of existing improvements and the degree of benefit assigned
to that parcel from the improvements to be made. The current
method of assessment, based on assessed valuation of a property,
results in very uneven level of assessments for similar parcels.
Under the proposed new assessment, calculated on gross floor
area, the costs will be spread more equitably throughout the
district.
The attached report establishes three (3) sub-zones for the Dis-
trict. The assigned levy is based on the annual cost associated
with the financing of the improvements benefiting that sub-zone.
As is the case in the existing DPBID, all parking improvements
are assumed to benefit all parcels in the District equally I
therefore their cost has been equally assigned to all zones in
the new district. The same has been assumed for all traffic and
circulation improvements to be constructed in the district. Mall
and alley common area and associated public improvements costs
have been been assigned only to those sub-zones that will direct-
ly benefit from these improvements. The cost of the new assess-
ments for each zone is as follows:
Zone 1 (properties between the Mall
and the alleys on either side):
Zone 2 (East side of 2nd street and
West side of 4th Street properties) :
Zone 3 (West side of 2nd street and
East side of 4th Street properties):
$1. 0754
$.4077
$.3343
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In most cases, these new assessments will be a reduction for
properties located in Zones 2 and 3. Properties in Zone 1 (the
Mall) will be realizing a substantial increase in their assess-
ment rate commensurate with the far greater benefit they will
receive through the improvements.
The proposed assessment district provides a credit for those par-
cels which provide parking for use by the public and for non-
profit religious and educational institutions that do not use
their facilities on a full-time or peak period basis.
Any new development that provides for a net increase in square
footage and parking demand will be required to pay an additional
annual assessment equal $1. 50 per net increase in gross square
footage. This amount will be used to finance additional parking
and related improvements with the goal of maintaining adequate
parking facilities to accommodate future growth in the area.
The attached resolution also makes provisions for declaring the
City's intention to adopt an ordinance to levy a fee for the op-
eration and maintenance of the improvements. The fee would be
levied against businesses in the District (rather than property
owners who will be responsible for paying the assessment) and
would be equal to five (5) times the City's Business License Tax.
The City Council by resolution will be able to periodically ad-
just the amount of the fee, not to exceed five (5) times the
Business License Tax, to ensure that revenues from the fee do not
exceed the cost of the operation and maintenance of the
improvements.
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Next steps
The adoption of the Resolution of Intention by the Council will
set in motion the procedure for pUblic noticing of the assessment
district. On August 19, 1986, 30 days after the adoption of the
resolution, the City Council will conduct a public hearing to
hear from the affected property owners, businesses and the
public regarding both the assessment district and the maintenance
fee. Staff will also present to the Council on August 19 the
necessary documents to permit the issuance of certificates of
Participation to finance the public improvements prior to Septem-
ber 1, 1986.
FISCAL IMPACT
The fiscal impact of the establishment of the assessment dis-
trict, the maintenance and operations fee and the issuance of
securities to finance improvements will be presented in the staff
report presented to Council for the August 19, 1986 public
hearing.
RECOMMENDATION
It is staff's recommendation that the City Council:
1. Adopt the attached Resolution of Intention;
2. Confirm and ratify the attached Third street Mall Assess-
ment District Report;
3. File the Report with the city Clerk; and
4. Direct the City Clerk to cause notice of the passage of
this resolution to be posted and mailed pursuant to the
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city I S adopted procedural ordinance for assessment
districts.
Prepared by: Peggy curran, Director
Community & Economic Development Department
Ernesto R. Flores, Manager
Economic Development Division
Attachments: 1. Resolution
2. Consultant's Report (Katz, Hollis, Coren & As-
sociates, Ine.)
resinmal
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RESOLUTION NO.
7255(CCS)
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(Clty Councll Serles)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA, DECLARING ITS INTENTION TO ESTABLISH
AN ASSESSMENT DISTRICT TO PROVIDE FOR THE LEVY AND
COLLECTION OF ASSESSMENTS TO FINANCE IMPROVEMENTS
TO THE THIRD STREET MALL AREA, AND DECLARING ITS
INTENTION TO ADOPT AN ORDINANCE TO ESTABLISH A FEE
FOR THE OPERATION, ~,INTENANCE AND REPAIR OF SUCH
IMPROVEMENTS.
WHEREAS, the Clty Councl1 of the Clty of Santa
Monica proposes to partlclpate ln the acqulsltlon, construc-
tlon and flnanclng of certaln Improvements relatlng to the
Santa Monlca Thlrd Street Mall and perlpheral areai and
WHEREAS, lt has been determlned by the Clty CouncIl
that proceedlngs be commenced and conducted for the prellml-
nary steps for the formatIon of an assessment dIstrIct and
the leVYIng of assessments to flnance such lmprovements;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF
SANTA MONICA DOES RESOLVE AS FOLLOWS:
SECTION 1. That thlS CIty CounCIl hereby declares
Its lntentlon to establlsh an assessment dlstrlct.
SECTION 2. That the "Thlrd Street Mall and Down-
town Assessment DIstrIct Report" (the "Report") prepared by
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Katz, Holl~s, Coren & Assoc~ates, Inc. ~n accordance w~th
Procedural Ord~nance No 1377 of the C~ty adopted on July 8,
1986, ~s hereby conf~rmed and rat~fled and shall be f~led
w~th the C~ty Clerk.
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SECTION 3. That ~t ~s the ~ntent~on of the C~ty
Counc~l to determ~ne that the pub1~c conven~ence and necess~-
ty requ~re lmprovements to be made ln the area of the Th~rd
Street Mall and per~pheral area. The proposed ~mprovement5
(the "Improvements") shall ~nclude, but not be 11m1ted to the
~tems set forth In Exhlblt A to the Report attached hereto.
SECTION 4. That the boundar1es of the proposed
assessment dlstrlct are descrlbed In Exh~blt B to the Report
attached hereto.
SECTION 5. That the dlstrlct to be beneflted by
the 1mprovements be assessed to pay costs and expenses there-
of and to be known as an assessment d~strlct, shall be all
that part of the Clty of Santa Monlca, wlthln the proJect
area havlng exterlor boundarles as shown on the assessment
dlstrlct d1agram set forth ln Exhlblt B to the Report at-
tached hereto. Reference 1S hereby made to the dlagram for a
full and complete descr~ptlon of the assessment dlstrlct and
the d~agram shall govern for all deta~ls as to the extent of
the assessment dlstrlct.
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SECTION 6. That It is the intention of the City
Council to adopt an ordinance (the "Ordinance") to levy an annual
fee (the "Fee") for the operation, maintenance and repair of the
Improvements. The Ordinance will provide:
A. The Fee shall be equal to five times the annual
Business License Tax established pursuant to Article VI of the
Santa Honica Municipal Code on businesses within the district;
B. The Fee shall be collected in the same manner, at
the same time, and subject to the same penalties as the Business
License Tax establIshed pursuant to Article VI of the Santa
Monica Municipal Code;
C. The City Council by Resolution may adjust the
amount of the Fee on all or classes of businesses within the
district to the extent necessary to assure that revenues from the
Fee do not exceed the cost of operation, maintenance and repair
of the Improveme~ts and to assure that the Fee reasonably relates
to the benefits of the Improvements.
D. In no event shall the amount of the Fee exceed the
lesser of five times the annual Business License Tax or
$15,000.00 adjusted annually by increases in the Consumer Price
Index.
SECTION 7. The City Council proposes to find and
determlne that the public convenience and necessity require the
Improvements. A public hearing for hearing protests and
objections to the proposed Improvements and the Ordinance will be
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held on Tuesday, August 19, 1986, in the City Council Chambers,
1685 Main St~eet, Santa Honica, California, at 7:30 p.m. The
City Clerk shall cause all notices of the hearing to be posted
and mailed as required by applicable law.
When notice by
publication is required) the City Clerk shall publish such notice
in the Eveninq Outlook, a newspaper of general circulation
published in the City of Santa Honica. After such hearing, if
the City Council finds and determines that the public convenience
and necessity require the Improvements, it may order the
Improvements and adopt the Ordinance.
SECTION 8. The City Clerk shall certify to the
adoption of this Resolution, and thenceforth and thereafter the
same shall be in full force and effect.
APPROVED AS TO FORM:
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ROBERT H. HYERS 0
City Attorney
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Adopted and approved this 15th day of July, 1986.
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I hereby certIfy that the foregoIng Resolution No. 7255(CCS)
was duly adopted by the City Council of the City of Santa Monica
at a meeting thereof held on July 15, 1986 by the followIng
Council vote:
Ayes: Councilmembers: Conn, EpsteIn, Jennings, A. Katz,
Zane and Mayor Reed
Noes: Councilmembers: None
AbstaIn: Councilmembers: None
Absent: Councilmembers: H. Katz
ATTEST:
~1h.~
Clty Clerk
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