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SR-04-08-2014-8BCity Council Meeting: April 8, 2014 Agenda Item: To: Mayor and City Council From: Andy Agle, Director of Housing and Economic Development Subject: Possible Expansion of Downtown Assessment District Recommended Action Staff recommends that the City Council: 1) Authorize staff to collaborate with Downtown Santa Monica, Inc. to explore modification of the existing Downtown Property Based Assessment District (PBAD) or establishment of a new property -based improvement district to provide expanded services in two new areas, the Colorado Esplanade corridor and the Lincoln Boulevard corridor; 2) Authorize the City Manager to negotiate and execute an agreement with Downtown Santa Monica, Inc. (DTSM) to enable the City to fund 50 percent of the costs associated with the development of a work plan, assessment methodology, and public outreach associated with the potential expansions for a cost not to exceed $25,500; 3) Authorize the City Manager to negotiate and execute contracts associated with the development of engineer's reports, which analyze the potential benefits and assessment amounts associated with the potential expansions for a cost not to exceed $30,000; and 4) Appropriate the budget increases as outlined in the Financial Impacts and Budget Actions section of this report. Executive Summary Public and private investments that are currently underway in Santa Monica's Downtown, including the Exposition Light Rail Terminus station (estimated opening 2016), the Colorado Esplanade (estimated opening 2017), and several new residential developments along Lincoln Boulevard, have prompted property owners and Downtown Santa Monica, Inc. (DTSM) to explore a modification of the existing PBAD to address the delivery of additional enhanced maintenance and ambassador services to the Colorado Avenue and Lincoln Boulevard corridors. Staff seeks Council authorization to explore enhanced services, including providing funding and retaining consultants with expertise to develop a conceptual work plan and assessment methodology for each area, provide technical assistance, and prepare documents and reports needed to initiate each districts' formation if there is sufficient property -owner interest in each area. 1 Staff recommends that Council appropriate budget in the total amount of $55,500 to cover the cost of DTSM and City consultant fees. The City's expenditures for each zone would be repaid from assessment proceeds if the respective zones are formed. Background Resolution 10336 (CCS) approved by City Council on July 24 2008, established the Downtown Santa Monica Property -Based Assessment District (PBAD) to fund enhanced maintenance, an ambassador program, and marketing and special projects above and beyond those basic services provided by the City. The PBAD boundary generally encompasses properties bounded by Ocean Avenue to the west, 7th Court to the east, Santa Monica Freeway to the south, parcels on the north side of Wilshire Boulevard and selected parcels with commercial or visitor - serving orientation north of Wilshire Boulevard along 2nd, 3rd, 4th, 5th, 6th and 7th Streets. With the imminent arrival of the Expo Light Rail Station and the completion of the Colorado Esplanade, a significant increase in pedestrian activity and visitors along Colorado Avenue is expected. Lincoln Boulevard is now included in LUCE- defined boundaries of Downtown and new mixed -use residential development on and near Lincoln Boulevard has increased pedestrian activity in the area. The urban context of both areas is expected to continue to become more hospitable to walking, biking, and public transportation. Downtown stakeholders have recognized that the increase in pedestrian activity will also result in more service needs, including improvements in maintenance of sidewalks and streetscape elements, such as trash receptacles, seating, and directories; deployment of additional ambassadors to interface with visitors; and other enhancements or new initiatives specific to each corridor. Establishment of a modified assessment district or new benefit zone over the Esplanade corridor and a new assessment district for the Lincoln Boulevard corridor could provide funding for needed improvements and enhanced programs and services. 2 Discussion The parcels along Colorado Avenue between the Expo Light -Rail terminus station and the Santa Monica Pier currently are part of the existing PBAD, falling within Zones 2 and 3. DTSM is contemplating the creation of a new overlay district or benefit zone to be known as Zone 4, Esplanade Overlay, which would generally apply to those parcels along Colorado Avenue between Ocean Avenue and Fifth Court or Lincoln Court. There is currently no property -based assessment district along Lincoln Boulevard. The consultants would assess the criteria for the creation of a new property -based assessment district along Lincoln Boulevard, bounded on the north by Wilshire Boulevard and on the south by the Santa Monica Freeway. In order to be in conformance with applicable law, both districts would require: the creation of a formal "Management Plan" that describes the enhanced activities, services and improvements to be provided, an assessment methodology, • a formal "Engineer's Report" documenting the benefits to be provided, and • a vote of the affected property owners. Staff recommends that the City allocate $55,500 for DTSM and City consultant services related to the proposed expansion of services to Colorado Avenue and Lincoln Boulevard. The City would fund $25,500 to DTSM ($14,000 for Lincoln Blvd. and $11,500 for Colorado Ave.), which represents 50 percent of professional service consultant fees needed by DTSM to develop a Management Plan, prepare an assessment methodology, provide technical assistance, and outreach to stakeholders. In addition, staff recommends a budget appropriation of $30,000 ($15,000 for Lincoln Blvd. and $15,000 for Colorado Ave.), for the preparation of the Engineer's Reports under contract with the City. The Engineer's Report for each zone would be used by the City to evaluate the amount of special benefit subject properties would receive and that 3 proposed assessments are fairly distributed. The City's expenditures for each zone would be repaid from assessment proceeds, if the respective zones are formed.' Commission Action DTSM Board of Directors approved the initiation of a feasibility study on the proposed modification and expansion of the PBAD on July 25, 2013. Next Steps If Council generally supports exploration of modification and addition to the existing PBAD, staff would initiate the work and then return to Council to seek approval of a Management Plan specific to each area. If the Management Plans are accepted, a petition process would be needed to initiate a ballot measure on the formation of each new zone or district. Financial Impacts & Budget Actions Implementing this recommendation would result in one -time costs in the amount of $55,500, including one half of consultant costs, and $30,000 for the preparation of Engineer's Reports. These activities require a one -time appropriation of $55,500 to account 012681.555060 in the FY 2014 -15 budget. If one or both of the districts or new benefit zone are formed, the City would be reimbursed from collected assessments and funds would be credited to revenue account 01263.406980. Prepared by: Elana Buegoff, Sr. Development Analyst Approved: Andy Agle, Director Housing and Economic Development Attachments: A. Map rd Forwarded to Council: ,-- i Rod Gould City Manager • R Q �- c Q E U E L U Z ca Q O Z VJ ��Q/� z O Z O 0 4AA -q VOINnim Reference: Contract No. 9891 (CCS)