Title
Recommendation to Approve the Park Street Business Improvement Area Annual Assessment Report;
Adoption of Resolution of Intention to Levy an Annual Assessment on the Park Street Business Improvement Area for Fiscal Year 2020-21, and
Recommendation to Set a Public Hearing for May 19, 2020 to Levy an Annual Assessment on the Park Street Business Improvement Area. (Community Development)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The Park Street Business Improvement Area (BIA), which is managed by the Downtown Alameda Business Association (DABA), is funded in part from an assessment collected by the City of Alameda (City) from all businesses within the district. Every year, DABA presents a report to the City Council on the activities and expenditures that have occurred during the past fiscal year. The annual report also provides recommendations on the proposed expenditure of BIA revenues for the next fiscal year.
This fiscal year is ending with the coronavirus pandemic and the resulting Shelter-in-Place (SIP) order, which have led to an unprecedented situation for the Park Street district. In an addendum to its annual report, DABA has requested:
1. That there not be an annual CPI adjustment to the assessment fees; and
2. The invoices for the BIA assessment fees and City business license renewal be mailed 90 days after the State’s SIP order has been lifted. As of the time of this writing, the Bay Area SIP order has been extended to May 3, 2020.
Staff is requesting that the City Council adopt a resolution setting a public hearing on May 19, 2020 to levy the annual BIA assessment for Fiscal Year (FY) 2020-21.
BACKGROUND
In 1989, following the Parking and Business Improvement Area Law of 1979 in the California Streets and Highways Code, the City Council established regulations for BIAs in the Park Street and Webster Street commercial areas. This staff report is for the Park Street BIA, which is managed by DABA.
The Park Street BIA is funded from fees collected by the City from all businesses within that business district. The pooling of resources improves the business district as a whole and directly benefits business owners through the general promotion of business activities and public events, beautification and ambiance, construction and maintenance of parking facilities, and special projects benefitting the business area.
State law and the Alameda Municipal Code (AMC) require the City Council to work in collaboration with a BIA advisory board. The board prepares an annual report and provides recommendations to the City Council on the proposed expenditure of BIA revenues for its geographic area. The AMC also requires an annual review by the City Council and a yearly consideration of the assessment.
DISCUSSION
DABA’s Board of Directors, designated as the BIA’s advisory board, has prepared the Annual Assessment Report for FY 2020-21 (Exhibit 1). The report describes, in general terms, the activities and expenditures that have occurred in the Park Street BIA during the past fiscal year, FY 2019-20, as well as a work plan outlining the proposed use of BIA funds for the upcoming fiscal year. Community Development Department staff has reviewed the documents and has found them to be complete and reasonable.
DABA’s signature events, which attract tens of thousands of patrons to the District, include a Spring Festival, an Art & Wine Faire, and a Classic Car Show. DABA has also developed new, non-street closure events, such as The Whiskey Walk. In addition to its annual events, DABA advertises and promotes events in area magazines and local newspapers, utilizes pre-movie ad campaigns at the Alameda Theatre for promotion of special events and the District overall, and assists local businesses. These activities are designed to improve the vitality of the District, increase sales and sales tax revenues, promote members’ businesses, attract new businesses, and enhance the overall business atmosphere throughout the District. .
The Coronavirus and the BIA assessment. The pandemic has forced the cancellation of the 2020 Spring Festival and the March and April membership mixers. DABA has maintained a ready-reserve, emergency fund in excess of $100,000 to cover an unexpected cancelation of its signature events. DABA is exploring ways to create new, smaller scale events in addition to the Whiskey Stroll to supplement the revenue lost due to the cancelation of the Spring Festival. DABA has worked quickly to launch a weekly Zoom information-sharing conference series with its membership.
The Park Street BIA currently has approximately 473 members, and annual fees vary depending on the type of business and its location. The Park Street BIA has two benefit areas (Zone A and Zone B). Zone A is the core downtown area along Park Street. Zone B includes the areas north of Lincoln and south of Encinal along Park Street, several side streets, and Park Street Landing. While the businesses in both zones get the same basic services (access to the DABA web site, assistance from DABA, etc.), when the District was established, it was determined that the businesses in Zone B do not benefit equally from DABA’s special events. Therefore, the Zone B assessment is lower than the Zone A assessment. The assessment is calculated based on gross receipts. There is a minimum and a maximum assessment for both Zone A and Zone B.
Per the AMC, each year the BIA assessment has an automatic Consumer Price Index (CPI) increase based on the San Francisco Area CPI. This year’s CPI of 2.5%, for example, would raise the minimum retail business annual fee by $8.00, to $344.00, in Zone A and by $4.00, to $176, in Zone B. In an addendum to its annual report (Exhibit 2), DABA has requested, due to the financial hardship presented to its membership by the pandemic:
1. That there not be an annual CPI adjustment to the assessment fees; and
2. The BIA assessment fees and city business license renewal be mailed 90 days after the State’s SIP order has been lifted. As of the time of this writing, the Bay Area SIP order has been extended to May 3. The issue of deferred Business License Tax was addressed at the April 21 City Council meeting.
Included with this report is the FY 2020-21 BIA assessment fee schedule with no CPI adjustment (Exhibit 3), a map of the BIA (Exhibit 4), and a BIA address list (Exhibit 5).
The annual BIA assessment requires a two-step process. First, the City Council must approve the Annual Assessment Report and pass a Resolution of Intent to Levy an Assessment. Second, City Council must set a public hearing to approve the new assessment and BIA boundaries. The public hearing is scheduled for May 19, 2020. At the public hearing, the City Council can modify the Assessment Report or confirm the report as filed. At the public hearing, the Council may also decide not to include the annual CPI adjustment to the assessment fees. According to the AMC, Section 6-7.13(b):
During the course or upon the conclusion of the public hearing, the City Council may order changes in any of the matters provided in the report, including changes in the proposed assessments.
All BIA members will receive notification of the public hearing in addition to instructions on how to protest the BIA renewal, should they wish to do so. FY 2020-21 assessments cannot be levied and boundaries approved if protests are received by the owners of businesses in the area which will pay fifty percent (50%) or more of the proposed assessment.
ALTERNATIVES
• Staff recommends approving the Park Street BIA annual report, adopting a Resolution of Intention to Levy an Annual Assessment, and setting a public hearing for May 19, 2020 to levy an annual assessment for the Park Street BIA.
• Postpone the public hearing until a future City Council meeting to allow an opportunity for in-person public comment.
• Decline to adopt the Resolution of Intention to Levy an Annual Assessment.
FINANCIAL IMPACT
BIA billing is done concurrently with Business License billing. Revenues from the BIA directly benefit business owners in specified geographic and benefit zones through the promotion of business and similar eligible activities. The primary financial impact to the General Fund is in the form of Finance Department staff costs to process BIA billings and expenditures, estimated to be approximately $6,500 annually ($1,856 for WABA and $4,644 for DABA) and included in the Business License Program Budget (Fund 001, Program 2450).
The Community Development Department staff works closely with DABA, attending monthly board meetings and subcommittee meetings, estimated to be $2,300 annually (Fund 256). This staffing cost has been absorbed within existing staff workloads to provide indirect financial support to the business districts.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The annual renewal of the BIA supports the goals of the Economic Development Strategic Plan (EDSP) through continued operation of the business association consistent with AMC Sec. 6-7 et seq.
EDSP Strategy 4 states: “the City of Alameda’s role is to continue to support existing shopping and dining districts by working with private property owners and business associations to improve retail spaces and the public realm”.
ENVIRONMENTAL REVIEW
This action involves government fiscal activities which do not involve any commitment to any project which may result in a potentially significant physical impact on the environment and is exempt from the California Environmental Quality Act (CEQA), pursuant to CEQA Guidelines section 15378(b)(4).
CLIMATE IMPACTS
Not applicable to this report.
RECOMMENDATION
It is recommended that the City Council:
1. Approve the Park Street Business Improvement Area (BIA) annual assessment report;
2. Adopt a Resolution of Intention to Levy an Annual Assessment on the Park Street BIA for Fiscal Year (FY) 2020-21; and
3. Set a Public Hearing for May 19, 2020 to Levy an Annual Assessment on the Park Street BIA.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval of the annual assessment report and to approve the resolution and annual assessment without a cost of living increase this year.
Respectfully submitted,
Debbie Potter, Reuse and Community Development Director
By:
Eric Fonstein, Development Manager
Financial Impact section reviewed,
Nancy Bronstein, Acting Finance Director
Exhibits:
1. DABA’s Annual Assessment Report
2. Addendum to Annual Report
3. BIA Assessment Fee Schedule FY 2020-21
4. BIA Boundaries Map
5. BIA Address List
cc: Eric Levitt, City Manager
Downtown Alameda Business Association