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HomeMy WebLinkAbout2004-02-02 Ordinance 4819I '. follows: ORDINANCE NO. 4819 ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ESTABLISHING THE DOWNTOWN PALO ALTO BUSINESS IMPROVEMENT DISTRICT IN THE CITY OF PALO ALTO The Council of the City of Palo Alto does ORDAIN as SECTION 1. Findings. declares that: The City Council finds and (a) Pursuant to the Parking and Business Area Law of 1989, California Streets and Highways Code Sections 36500 et seq. (the "Act"), on December 15, 2003, the City Council adopted Resolution No. 8387, entitled "A Resolution of the City Council of the City of Palo Alto Confirming the Revised Report of the Advisory Board in Connection with the Establishment of the Proposed Downtown Palo Alto Business Improvement District, Declaring its Intention to Establish Said District, Declaring its Intention to Levy an Assessment on Businesses wi thin Said District for Fiscal Year 2003-2004, and Setting a Time and Place for a Public Hearing on the Establishment of the District and the Levy of the Assessment." (b) The City caused notice of a rescheduled public meeting and a public hearing concerning the proposed establishment of the Downtown Palo Alto Business Improvement District and the proposed levy of an assessment against businesses for fiscal year 2003-2004 within the proposed District to be duly mailed as provided by law. (c) A rescheduled public meeting and a public hearing concerning the proposed establishment of the Downtown Palo Alto Business Improvement District and the proposed levy of an assessment against businesses wi thin the proposed District for fiscal year 2003-2004 were held on December 15, 2003, and January 12, 2004, respectively, at the hour of 7:00 p.m. in the City Hall Council Chambers, 250 Hamilton Avenue, Palo Alto, California 94301. (d) At the rescheduled public meeting and the public hearing, the testimony of all interested persons for or against the establishment of the proposed Downtown Palo Alto Business Improvement District, the extent of the proposed District, or the furnishing of specified types of improvements and activities wi thin the proposed District, and regarding the levy of an 040212 sm 0100177 1 assessment against businesses wi thin the proposed District for fiscal year 2003-2004 was heard and considered, and a full, fair and complete meeting and hearing were held. (e) The City Council finds that the public interest, convenience and necessity require the establishment of the proposed Downtown Palo Alto Business Improvement District. (f) At the public meeting and public hearing, the City Council heard and considered all protests, and all protests, both written and oral, are hereby overruled. The City Council hereby determines that there was not a majority protest within the meaning of Section 36525 of the Act. (g) In the opinion of the City Council, the businesses and the property within the Downtown Palo Alto Business Improvement District will be benefited by the activities and improvements to be funded by the assessments. The goal of such improvements and activities is to prevent economic deterioration and promote economic vitality of the District through the attraction of more customers and consumers to the District who will patronize District businesses. As set forth in Exhibit "B" hereto, for most businesses, the assessment is based on the type of business, the location of the business and the size of the business. For purposes of apportioning the assessment, businesses are included in Zone A or Zone B. The boundaries of Zone A extend from the east side of EI Camino Real to the West, the west side of Webster Street to the East, the south side of Lytton Avenue to the North and Forest Avenue to the South. Zone B encompasses the balance of businesses in the District, and includes all businesses not located in Zone A. In addition, all upper floor businesses in Zone A are considered to be Zone B businesses. (h) The City Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. SECTION 2. Establishment of District. Pursuant to the Act, a business improvement area designated as the "Downtown Palo Alto Business Improvement District" (the \\District") is hereby created and established. SECTION 3. Description of District. The boundaries of the District are within the City limits of the City of Palo Alto (the "City") and encompass the greater downtown area of the City, generally extending from EI Camino Real to the West, 040212 sm 0100177 2 Webster Street to the East, Lytton Avenue to the North and Addison Avenue to the South (east of Emerson Street, the boundaries extend only to Forest Avenue to the South). Reference is hereby made to the map of the District attached hereto as Exhibit "A, II and incorporated herein by reference for a complete description of the boundaries of the District. SECTION 4. System of Assessments. (a) Except where funds are otherwise available, an assessment will be levied annually against all non-exempt businesses within the District to pay for all the activities and improvements to be provided within the District, commencing with fiscal year 2003-2004. The assessment shall be in addition to any other assessments, fees, charges or taxes imposed by the City. (b) The method and basis of levying the assessment is set forth in Exhibit "B," attached hereto and incorporated herein by reference. (c) New businesses established in the District after the beginning of any fiscal year shall be exempt from the levy of the assessment for that fiscal year. In addition, nonprofit organizations, newspapers and professional "single-person businesses II defined as those businesses which have 25% of less full time equivalent employees, including the business owner, shall be exempt from the assessment. (d) The assessment for fiscal year 2003-2004 shall be prorated, with businesses within the District assessed one-half the amount of the annual assessment. (e) For purposes of the levying and collecting assessments within the District, a fiscal year shall commence on July I, and end on the following June 30. (f) For fiscal year .2003-2004, the City shall, prior to March 10th, provide the business owners within the District with a written invoice of the amount of the assessment that is owed for fiscal year 2003-2004. The assessment for fiscal year 2003-2004 shall be due and payable on the date of such invoice and shall become delinquent 30 days thereafter. For each fiscal year subsequent to fiscal year 2003-2004, the City shall, prior to each July 10th , provide the business owners within the District with a written invoice of the amount of the assessment that is owed for that fiscal year. Each assessment shall be due 040212 sm 0100177 3 and payable on the date of such invoice and shall become delinquent 30 days thereafter. Each fiscal year, the City will send a second invoice to those business owners within the District that have not paid their assessment by the 30th day following the date of the original invoice. (g) Each assessment shall be subject to a penalty of ten percent (10%) if not paid within 30 days of the date of the original invoice. A payment made by mail shall be deemed received on the date shown on a postage cancellation stamp imprinted on the envelope in which the payment is received, or if payment is made by means other than through the United States Mail, payment shall be deemed received on the date the payment is stamped "receivedH by the Director of Administrative Services or his or her designee. (h) The amount of assessment and any penalty imposed by the provisions of this Ordinance shall be deemed a debt to the City. An action may be commenced in any court of competent jurisdiction in the name of the City for the amount of such debt. (i) The assessment formula set forth in Exhibit "B" is hereby adopted by the City Council. (j) In the event a business owner disagrees with the classification assigned by the owner's business, the business owner may file an application for reclassification with the City's Economic Development Manager (the "Manager"). Each application must set forth with specificity the facts upon which it is based. Within a reasonable time after receipt of an application, the Manager shall review the matter and shall either affirm the original classification or assign a new classification and shall notify the business owner of the decision in writing. The Manager may refuse to accept an application for reclassification from a business owner who has applied for reclassification within the previous 12 months if the application fails to state material facts which were not, and could not have been, presented in the previous reclassification application. The decision of the Manager on an application for reclassification shall be final. SECTION 5. Fund. There is hereby created a special fund designated as the "Downtown Palo Alto Business Improvement District Fund" into which all revenue derived from assessments levied pursuant to this Ordinance shall be placed, and such funds shall be used only for the purposes specified in this 040212 sm 0100177 4 Ordinance. audit. This fund shall be subject to an annual independent Section 6. Use of Revenues. The revenue derived from the levy of the assessments shall not be used to provide activities outside the District or for any purpose other than the purposes specified in Resolution No. 8387. No improvements will be funded in fiscal year 2003-2004. SECTION 7. Contract Services. The Ci ty may contract with a separate entity to administer the improvements and activities described in Section 6 above. Any entity with which the City contracts to administer such improvements and activities shall, at no expense to the City, provide an annual independent audit report by a Certified Public Accountant of these funds. The audit may be funded from assessment proceeds as part of the general administration of the District. At all times the City shall reserve full rights of accounting of these funds. Section 8. Amendments. Businesses within the District established by this Ordinance shall be subject to any amendments to the Act. Section 9. Certification. The City Clerk shall certify to the adoption of this Ordinance and cause the same to be published or posted in the manner prescribed by law. Section 10. Severability. If any section, sentence, clause or phrase of this Ordinance is, for any reason, held by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed and does hereby pass this Ordinance and each section, sentence, clause and phrase hereof, irrespective of the fact that anyone or more sections, sentences, clauses, or phrases may be declared invalid or unconstitutional. II II II II II 040212smOlOO177 5 SECTION 11. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. SECTION 12. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: January 12, 2004 PASSED: February 2, 2004 AYES: BEECHAM, BURCH, CORDELL, FREEMAN, KISHIMOTO, KLEINBERG, MORTON, MOSSAR, OJAKIAN NOES: ABSENT: ABSTENTIONS: Mayor APPROVED AS TO U ~ Senior Assistant City Attorney 040212 sm 0100177 6 The City of Palo Alto 1iopeZ2.2003-01-2514:17:39 Profl()96d BID Map 1l25103 (\\a>pIm1nIIk\GJIS$\Oeta\PeI1lQtlaNlope%2.mdb) Proposed Downtown Palo Alto Business Improvement District This map is a product of the City of Palo Alto GIS 0' 'rhiadoc:um&nt is. graphic repreMntation Only of bast 8wltable souroa8. The City of p.~ Alto assumes flO responsibilltytot any enola EXHIBIT "Bt• A General Statement Regarding Cost-Benefit Analysis For BID Businesses Using The Traditional -rhree Criteria Formula .Criteria 1) Type of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Type Of Business: In a review of 200 California Business Improvement Districts,it is consistently demonstrated that the typical BID Program places a higher priority on Commercial Marketing Programs than on Civic Beautification and Commercial Recruitment Programs. With that trend in mind, retail and restaurant businesses, with their emphasis on, and need for, commercial marketing, are traditionally assessed more than less marketing-sensitive service-oriented or professional-oriented businesses. However, while service-oriented businesses benefit from a BID less than retailers and restaurateurs, they benefit more, (from commercial marketing programs), than professional businesses such as medical, dental and legal offices with their minimal advertising and promotion needs. Therefore, set forth below. is an example of how various business types might be . considered regarding the computation of the annual benefit assessment. • Retail and Restaurant: • Service: • Professional: 100% of base amount 75% of base amount 50% of base amount Exceptions to this rule include financial institutions that are traditionally charged a flat rate regardless of location or size and lodging businesses that are typically charged by total rooms. Lodging businesses are assessed based on the total number of rooms because it is a more equitable manner of determining size. Many lodging businesses have many part time employees, but revenues are based on the room occupancies of the hotel, not the goods sold or serviced by employees. Criteria 2) Locatlon.of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Location of Business: It has also been consistently demonstrated that the more centrally located businesses tend to benefit from BID activities and services to a greater degree than businesses located toward the periphery of the proposed BID boundaries. Events and activities tend to originate in the central core of the downtown area and spread benefit to the outer areas with diminishing energy and impact, much like the ripple effect of a stone tossed into a body of calm water. Furthermore, ground floor businesses tend to benefit to a greater degree than businesses located in upper floors. Therefore, in some cases, a new BID's annual benefit assessment formula also takes these street level criteria into account. As mentioned above, special events, fairs, festivals and other activities tend to take place within, or along, the Main Street core rather than in the areas at the periphery of the downtown core. Additionally, BID-sponsored seasonal decorations, public art projects, street banners and street furniture tend to be located within the immediate core area. Therefore, businesses located within the most central area of the proposed BID are considered to be within "Zone A" which should be considered the primary benefit zone. There is typically a "secondary zone" or "Zone B" within most proposed BID areas. This area receives less bene'fit than Zone A and should be assessed accordingly. An example of how different zones might be treated regarding the computation of the annual benefit assessment is as follows. . • Zone A: 100% of base benefit assessment • Zone B: 75% of base benefit assessment In the case of Downtown Palo Alto, it is recommended that all Zone A upper floor businesses, as well as any other businesses located at the periphery of the proposed BID, be considered as Zone B businesses. Please refer to the map in Attachment I. Criteria 3) Size of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Size of Business: In approximately 50% of newly established BIDs, a third assessment criterion is used. This criterion involves the size of each individual business that is based upon the businesses' total number of full-time employees. Full-time employees are those working a total of 2,000 hours per year. Part-time employees are grouped into full-time job pOSitions, Le., two half-time employees total one full-time. Fractions are rounded down to the nearest whole number with no less than one person as a minimum for business. An example of how various business sizes might be treated regarding the computation of the annual benefit assessment is as follows: • Small: • Medium: 50% of base assessment 75% of base assessment • Large: 100% of base assessment • Full-time employees (FTE) Retail/Restaurants under 6 FTE* 6-under 11 FTE* 11+ FTE* Service Businesses under 4 FTE* 4 to under 7 FTE * 7+ FTE* Additionally, an exemption was established for "single person professional businesses" that have 25% or less full time equivalent (FTE), including the business owner. This covers employees who work less 10 hours a week (based on a 40 hour work week) Since "single person businesses" that have 26% FTE to 1 FTE in the professional business category of the BID benefit the very least from the assessment, their assessments have been tiered by size based (according to benefit) on the new "single person business" criteria.