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HomeMy WebLinkAboutItem 2d: Using Funds from Redevelopment Agency to Provide Expertise to Arcadia Downtown Business Association Pr PI 1111 ill Ili ill STAFF REPORT Arcadia Redevelopment Agency DATE: February 15, 2011 TO: Chair and Members of the Agency Board FROM: Jason Kruckeberg, Assistant City Manager /Development Services Director3Z/C By: Jerry Schwartz, Economic Development Manager SUBJECT: CONSIDERATION OF EXPENDING FUNDS FROM THE ARCADIA REDEVELOPMENT AGENCY TO PROVIDE OUTSIDE EXPERTISE TO THE ARCADIA DOWNTOWN BUSINESS ASSOCIATION Recommendation: Provide Direction BACKGROUND The Arcadia Downtown Business Association held its first meeting in June 2010. They have met monthly since then. While the first meeting was arranged by the Arcadia Chamber of Commerce, the business community quickly took over coordinating the meetings and the direction of the group. They established a "core group" that has held monthly meetings since July 2010, and focuses on planning the monthly Association meetings and developing direction for consideration by the Association. From this core group, officers and a Board of Directors has been established. The Agency Board held a Study Session regarding the Arcadia Downtown Business Association at the January 18 meeting. The Agency heard from Matt McSweeney, the Chair of the Association about its accomplishments to date and its request to utilize some outside expertise to help move them forward. The Agency requested that staff provide some options including costs, for providing that expertise. DISCUSSION Staff contacted three consultants that provide assistance to downtown business organizations, usually, but not always, in the formation of a Business Improvement District (BID). The Arcadia Downtown Business Association (Association) has not decided if it wants to form a BID or remain as an association. However, they also acknowledge that, despite hosting some speakers from other area BIDs, they still have a great deal to learn about them. From speaking with the consultants, one suggestion was that the Association should form itself as a legal entity regardless of the decision about becoming a BID. At least one of the proposals from the consultants includes assistance with that process. A summary of the recommended steps is shown below as a progression of costs depending on choices made by the Association. • Phase 1 — Consultant meets with City and downtown group to discuss financial and organizational options, allowing the Association to understand various means to provide resources to meet the needs and goals of the downtown stakeholders. The Consultant would help the Association to form a legal entity. Final product will be a feasibility analysis on forming a BID, including pros and cons. This phase is recommended, whether or not the Association decides to form a BID. The cost of this phase is estimated at $20,000. • Phase 2(a) — If the Association decides, after working with the consultant and talking to the business people that they want to form a BID, they will want to choose which type to pursue. A Business -based BID (BBID) assesses and is run by business owners rather than property owners. A Property -based BID (PBID) assesses and is run by property owners. If they choose to pursue BBID, the process is simpler, less time consuming, and less costly. The main difference is that a BBID can be done under a State Law that predates Proposition 218, while a PBID is subject to a Prop 218 vote. With a BBID, the consultant would work with the businesses to develop a set of programs to be implemented by the BBID, and develop a budget and assessment methodology to be used to fund programs and activities. There would be outreach to the businesses to develop consensus on the programming and assessment. A public hearing by the City Council would be required and coordinated with the consultant. The cost of this phase is estimated at $22,500. • Phase 2(b) — If the Association decides to form a PBID, it is a process that takes 9 — 12 months to complete. The steps include an engineer's report, the development of a data base, decision on assessment methodology, and outreach to other stakeholders, developing consensus, and establish a governance structure. There would be additional outreach before a vote by property owners, and a public hearing process with the City Council. Since this process must conform to the requirements of Proposition 218, the voting requirements are more specific than for a BBID. The cost of this phase is estimated at $50,000. It is important to note that if the downtown businesses decide to form a BID, they would either pursue Phase 2(a) or Phase 2(b). They would not have to complete both phases. An additional option would be to commission a retail recruitment study for the downtown. A retail recruitment study analyzes the uses currently in the downtown, the available sites, the zoning, and demographics, and prepares a report on retailers that might fit in the downtown area. It also provides a strategy to pursue these retailers. This study can be done as an individual step or it could be done in concert with the choice of the Association to become a BID or remain as an association. In any event, it is recommended that this step be considered after the "Phased" work has been completed. The cost of the retail recruitment study is estimated at $100,000. Arcadia Downtown Business Association February 15, 2011 Page 2 SUMMARY There are several formats in which assistance could be provided to the Arcadia Downtown Business Association. To summarize: • Phase 1 — Assist with legal formation, strategize, and decide on format. Cost - $20,000. • Phase 2(a) — Business based BID (BBID). Cost - $22,500; total cost of $42,500. • Phase 2(b) — Property based BID (PBID). Cost - $50,000; total cost of $70,000. • Additional option — Retail Recruitment Study. Cost - $100,000. FISCAL IMPACT The fiscal impact would depend on which selection(s) are made. At a minimum, to provide an experienced consultant to assist the Association would cost approximately $20,000. The cost would come from Redevelopment Agency reserves, which are sufficient for any choices that may be made. RECOMMENDATION Provide Direction. Approved: Pe- Donald Penman City Manager /Executive Director Arcadia Downtown Business Association February 15, 2011 Page 3