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Home My WebLink AboutItem 2b: Ordinance No. 2306 amending Arcadia Municipal Code concerning the establishment of Community Benefit Districts.STAFF REPORT Development Services Departmeint TO: Honorable Mayor and City Councii FROM Jason Kruckeberg, Assistant City Manager/Development Services Director,:rt�---- By- Jerry Schwartz, Economic Development Manager /. jV Ordinance No. 2306 would allow the following changes to the existing PBID establishment process,- Reduction of the requirement for supportive petitions from 50% to 30% before the City Council can vote to request an election to approve the PBID. Change the maximum initial length of the PBID from five (5) years to twenty (20) years, Staff Report January 15, 2013 Page Two * Provide for the reimbursement of costs to the City of Arcadia in the adoption of the PBID from future assessment revenues. * Give the City Council the option to loan funds to the PBID to start implementing its plans prior to the receipt of assessment funds from Los Angeles County. Any loan would be repaid with interest from future assessment revenues. Ordinance No. 2306 would be beneficial to any business district in Arcadia that was establishing a PBID. It supports the current process underway in the downtown area, but would be a positive step for any commercial district that initiates the process to form a PBID. It is recommended that the City Council adopt the attached Ordinance No. 2306: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, AMENDING ARTICLE 1 OF THE ARCADIA MUNICIPAL CODE BY ADDING CHAPTER 14 CONCERNING THE ESTABLISHMENT OF COMMUNITY BENEFIT DISTRICTS nm inic Lazza b ZZUEEM Attachments: Ordinance No. 2306 December 18, 2012 Staff Report AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, AMENDING ARTICLE I OF THE ARCADIA MUNICIPAL CODE BY ADDING CHAPTER 14 CONCERNING THE ESTABLISHMENT OF COMMUNITY BENEFIT DISTRICTS THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES ORDAIN AS FOLLOWS :. SECTION 1. The Arcadia Municipal Code is hereby amended by adding Chapter 14 to Article I to read in its entirety as follows: "CHAPTER14 &AWal The purpose of this chapter is to enhance the ability of the City and businesses therein to establish property and business improvement districts pursuant to the Property and Business Improvement District Law of 1994 (Streets & Highways Code Section 36600 et seq.) by: (1) reducing the percentage of property owners whose signatures are required to initiate formation of a property and business improvement district ("Property BID") from fifty percent (50%), as authorized by the Property and Business Improvement District Law of 1994, to thirty percent (30%),- (2) extending the period for which a Property BID may exist from five years, as authorized by the Property and Business Improvement District Law of 1994, to twenty years; and (3) authorizing the reimbursement of formation costs. 1 r; B. The City may advance funds for the first year of a District so that the District ran rereftn"111% I MMIFLIT a A 20 11] 011111111111 q - a #'' ! shall not exceed the total assessment for the first year. The funds advanced shall' be A District established pursuant to this chapter may have a duration of up to twenty (20) SECTION 2. If any portion of this Ordinance or the application thereof to any W it i I i I i I r IM ITS IM :11ilill 111 1 1111 11 I I 1��i 111!11IIIIJJI�111 111�111111111111 I III;!Igq�r I 111! 1, 111! � T 1=90 I shall cause a copy of same to be published at least once in the official newspaper of " • ill 'Ell 119111540911T-111i Igjill.. 11 MMMR 21 MMMNR�, l City Cferk Stephen P. Deitsch City Attorney I P v I ON I via , I Development Services Department TO. Honorable Mayor and #JZL4�i FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director_-5L-11- By: Jerry Schwartz, Economic Development Manager 11�6 SUBJECT: ORDINANCE NO. 2306, AN ORDINANCE OF THE CITY OF ARCADIA, CALIFORNIA, AMENDING ARTICLE I OF THE ARCADIA MUNICIPAL CODE BY ADDING CHAPTER 14 CONCERNING THE ESTABLISHMENT OF COMMUNITY BENEFIT DISTRICTS Recommendation: Introduce Ordinance No. 2306 M, 111111,131h.11 Streets and Highway Code Section 36600 et seq. governs the establishment of Property or Business Based Business Improvement Districts in California, it provides the requirement for the percentage of supportive petitions returned (50% of total business owners in the district) before an election can be held, and the voting requirement for approval of the District (50% +1 of total assessments in favor). It also provides for a five year time period for a new Property Based Business Improvement District (PBID). As a Charter City, the City of Arcadia has the legal right to pass an ordinance that sets up its own parameters for PBIDs. At the November 20, 2012, City Council meeting, the Council gave direction to prepare an ordinance for that purpose. Ordinance 2306 has been drafted to provide distinct parameters for such districts in Arcadia and is presented for introduction. On May 15, 2012, the City Council authorized a contract with New City America to work with the Arcadia Downtown Business Association (ADBA) on the formation of a PBID. One reason that the ADBA leaders were unanimous in their support for New City America was the company's vast experience establishing PBIDs in cities large and small throughout California. New City America has held five meetings with an expanded' group of downtown property and business owners. It has surveyed downtown property owners and received enough support for the proposed district to move forward with the formation process. At the November 20, 2012, City Council meeting, Marco Li Mandri, the President of New City America, provided an update to the City Council about the efforts to date and the • N 1-age 2 of 3 next steps in the process. One issue he raised is the advantage to the District if the City of Arcadia were to adopt a Community Benefit District Ordinance that would provide more flexibility compared to the Streets and Highways Code. New City America has successfully established Community Benefit Districts in several Charter cities, and has provided copies of Community Benefit District ordinances used by the City of Glendale and the City and County of San Francisco. The City Attorney reviewed these ordinances and determined that Arcadia could take a similar action, lvursa • The existing process to establish a PBID is based on the Streets & Highways Code, fl specifies the steps that are required, the support levels that are necessary at each benchmark, and the term of the PBID. These requirements are challenging to meet, and can make the makes the establishment of a PBID uncertain. For example, 50% of the petitions received must support having a vote on the establishment of a PBID before it can proceed. This is a level that can be difficult to reach. Another requirement is that when a PBID is first established, it can exist for five years before it must be renewed. There are two major impacts of the five year rule; the first is that because of the lead time to receive assessment funds from Los Angeles County and then implement the Plan for the District, there is not sufficient time to make a Positive impact before the renewal process must begin. The second impact is that the short time before renewal requires hiring and paying a downtown consultant to assist with the renewal process after seemingly having just paid for the establishment of the PBID. The proposed Ordinance No. 2306 creates local rules for Community Benefit Districts. It resolves the limitations in the Streets and Highways Code by utilizing the City's Charter status to establish provisions that can offer greater flexibility in the PBID formation process. Importantly, it does not change the level of support needed for final approval of the District. The Ordinance provides flexibility to a PBID through the following: 6 Reduction in threshold percentage of supportive petitions needed to request a vote on the establishment of a PBID from 50% to 30%, 0 Extension of the potential initial length of a PBID from five (5) years to twenty (20) years, The ultimate length will be decided by the committee of property and business owners that has been involved with the establishment process. The ability for the City to be repaid for its costs to establish the PBID from future assessment revenues. These costs can include; consultant costs, mailing costs for PBID establishment vote, and other expenditures on the part of the City. The City could potentially loan the PBID funds to start its work before assessment revenues are received, Any loan would be repaid, with interest, from assessment revenues, y. ffl�ucemDur ,--age 3 of 3 The Streets and Highways Code requires the vote to establish the PBID to have the support of 50% + 1 of the total assessments. Ordinance No. 2306 does not change that threshold. The Ordinance will allow the PBID to have ample to time to get established, implement the work plan, and show some positive results before starting the renewal process. Ordinance No. 2306 is Citywide rather than specific to the Downtown area. If at some future time, another commercial area of the City decides to pursue the formation of a PBID, Ordinance No. 2306 Would apply to that area and could benefit their efforts, FISCAL IMPACT There is no fiscal impact to the introduction or adoption of Ordinance No. 2306. The impact of the passing of a Property Based Business Improvement District will be longer term and is difficult to quantify. More shoppers in downtown Arcadia and greater demand for currently vacant commercial spaces would be positive for the local economy. There is a provision for repayment of City costs for the formation of a PBID once it is operating and generating, assessment revenues if the City wishes to pursue this at a later date. introduce Ordinance No. 2306, an Ordinance of the City Council of the City of Arcadia, California amending Article 1 of the Arcadia Municipal Code by adding Section 14, establishing Community Benefit Districts. 031= 1� 001�rlicLa� �0� City Manager Attachment: Ordinance No. 2306