HomeMy WebLinkAbout2004-01-12 City Council (4)City of Palo Alto
City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER
6
DEPARTMENT: City Manager
DATE:JANUARY 12, 2004 CMR: 114:01~
SUBJECT:HOLD A PUBLIC HEARING ON THE DOWNTOWN BUSINESS
IMPROVEMENT DISTRICT (BID) AND IF NO MAJORITY
PROTEST, RECOMMENDATION TO ADOPT AN ORDINANCE
ESTABLISHING THE DOWNTOWN PALO ALTO BID
RECOMMENDATION
Staff recommends that the City Council:
1. Hold a Public Hearing to hear testimony regarding the establishment of a
Downtown Business Improvement District (BID) and
Hear report on determination of existence of majority protest
If there is no majority protest, adopt an ordinance establishing the Downtown
Palo Alto Business Improvement District (BID) and authorizing the levy of
assessments in the manner described in the Ordinance
BACKGROUND
Initially, more than 50 members of the downtown Palo Alto business community
petitioned City Council to consider the establishment of a BID to enhance the viability of
the downtown business district. BIDs are a tool used in over 200 communities in
California to re-vitalize and!or promote business areas.
On December 15, 2003, the City Council held a rescheduled public meeting to hear
testimony on the establishment of a Downtown BID. Following the public meeting, the
City Council accepted and approved the Advisory Board’s Revised Report to City
Council, which included recommendations on the BID boundaries; the method and
process of assessing businesses in the BID; a description of BID activities and the
proposed BID budget. In addition, the City Council adopted a Resolution of Intention
that declares the City Council’s intent to form a Downtown Business Improvement
CMR:114:04 Page 1 of 5
District (BID) and levy assessments on businesses located in the BID for fiscal year
2003-04.
A copy of the Resolution of Intention has been sent to each business located in the
proposed BID within the seven-day period as required by. the BID law. Prior to this
mailing, each business owner has also received an individual notice with the amount of
his or her individual annual assessment. A declaration containing the process used to
identify businesses and create a database of downtown businesses located in the BID is
on file in the City Manager’s Office.
The Resolution of Intention to Establish a Downtown BID included all of the
requirements of BID law including a description of the boundaries of the area and
identification of any separate benefit zones; name of the proposed area; type or types of
improvements and activities to be funded by the levy of assessments; statement that,
except where funds are otherwise available, an assessment will be levied annually to pay
for all improvements and activities in the area; identification of the proposed method and
basis of levying the assessment, in sufficient detail to allow each business owner to
estimate the amount of the assessment to be levied against his/her business and the
determination of whether new businesses will be exempt from the levy of the assessment
for a period not to exceed one year from the date the business commenced operating,
pursuant to Streets and Highways Code Section 36531.
DISCUSSION
The City Council must now consider the testimony of all interested persons for or against
the establishment of the BID, on the extent of the area within the BID, and the specified
types of improvements or activities by the BID. Written protests must be filed with the
City Clerk at or before the time fixed for the public hearing. If written protests to the
establishment of a BID are received from the owners of businesses in the proposed area
which will pay 50% or more of the total BID assessment, no further proceedings to create
the business improvement area or to levy the proposed assessment shall be considered for
at least a year.
After the close of the public hearing, staff will report on whether a majority protest exists.
Currently, staff has received protests that represent approximately 3% of businesses in
the district, weighted by the assessment paid by each business. For example, a restaurant
that pays an assessment of $450 has more weight than a professional business with 2-4
employees in the B district that pays $90 (20% of the amount of the restaurant’s
assessment) annually.
CMR:112:04 Page 2 of 5
If there is no majority protest, the City Council may then choose to adopt, revise, change,
reduce or modify the proposed assessment or the improvements and activities proposed.
However, in order to establish the BID in the current proceedings, assessments may only
be revised by reducing them and the proposed BID boundaries may only be changed by
excluding territory. If the City Council, following the public hearing, decides to establish
the BID, it will adopt an ordinance to that effect. The ordinance will contain information
required by BID law including the manner of collection and levy of assessments.
A second reading of the ordinance will occur no sooner than 10 days from the adoption
and first reading of the ordinance. At that time, a resolution confirming the levy of the
assessments on businesses located in the BID may be adopted by City Council.
The City will contract with a non-profit to administer and carryout the BID activities.
Typically, the board of directors of the nonprofit (that is constituted according to the
bylaws of the contracting non-profit), will be appointed by the City Council as the
advisory board to the City for the BID. The City will collect the assessments and
disburse the funds to the contracting nonprofit to implement the BID activities. It is
anticipated that the City will enter into a cost reimbursable contract with the nonprofit for
the provision of BID activities and services.
In subsequent years, an annual reauthorization of the BID will be required for its ongoing
operation. In that process, the advisory board will recommend BID activities, a budget
and assessment amounts to the City. Since this is a partial year, the annual reauthorization
will take place no later than June 2004 for the upcoming fiscal year.
RESOURCE IMPACT
The City Manager’s Office has provided staff support to the Advisory Ad Hoc
Committee and Advisory Board. Economic Development staff has overseen the creation
of a business database and other activities associated with the formation of a Downtown
BID.
The City Attorney’s office has provided legal oversight and direction regarding the
noticing and scheduling of required BID actions. In addition to internal legal oversight,
outside legal services have been utilized. Estimates for this work are $10,000, with
$5,000 being paid from the City Attorney’s budget for contractual services. The City
Manager has agreed to pay the additional $5,000 from the City Manager’s contingency.
CMR:112:04 Page 3 of 5
Preliminary estimates of costs to the Administrative Services Department are estimated to
be $16, 000 for the payment processing of BID assessments. Of this cost, $5,000 will be
paid from BID funds collected, and the balance of the funds ($11,000) will be paid
through the City Manager’s contingency in this initial year of operation. An additional
initial cost of $4,000 is estimated for data input and reporting. This amount will also be
funded through the City Manager’s contingency.
It is anticipated in future years that the database will be maintained by and assessment
notices will be prepared by the nonprofit with which the City contracts to provide BID
activities administration and operations. The notices will be sent out by the City. The
ongoing cost for processing of BID payments is estimated to be $5,000 annually. These
costs will be paid with revenues generated from BID assessments. If additional expenses
for payment processing occurs, these costs will be will be reviewed by the City Council
at the time of the annual BID reauthorization and a determination will be made regarding
the funding of any additional costs
POLICY IMPLICATIONS
The establishment of a Downtown BID is consistent with Comprehensive Plan Policies
and was a part of the recommendations for Downtown Palo Alto identified in the Retail
Strategy for the City of Palo Alto prepared by Sedway and Associates in June 2000.
The establishment of a BID supports the following Comprehensive Plan Policies:
Policy B-4 Nurture and support established businesses as well as new businesses.
Program B-1 Initiate assessment districts or other programs to facilitate neighborhood
shopping center improvements such as landscaping, parking and access to public
transportation.
Policy B-11 Encourage the use of public/private partnerships as a means of redeveloping
and revitalizing selected areas.
Policy B-20 Support and enhance the University Avenue~owntown area as a vital mixed
use area containing retail, personal service, office, restaurant, and entertainment uses.
Recognize the importance of an appropriate retail mix, including small local businesses,
to the continued vitality of Downtown.
ENVIRONMENTAL REVIEW
This action by the City Council is not considered a project under the California
Environment Quality Act.
CMR:112:04 Page 4 of 5
ATTACHMENTS
ATTACHMENT 1
A TTA CHMENT 2
A TTA CHMENT 3
A TTA CHMENT 4
CMR 48.1:03
CMR 505:03
CMR 551:03
Ordinance to Establish the
Improvement Area
Proposed Parking and Business
PREPARED BY:S~, ~z(~opment Manager
CITY MANAGER APPROVAL:
Emil~q:l~rris’or~,~kssistant (~U-Manager
CMR:112:04 Page 5 of 5
ATTACHMENT 1
City of Palo Alto
City Manager’s Report
13
TO:HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: City Manager
DATE:October 27, 2003 CMR:481:03
SUBJECT:RECOMMENDATION TO CITY COUNCIL TO ACCEPT THE
REPORT AND RECOMMENDATIONS OF THE DOWNTOWN
BUSINESS IMPROVEMENT DISTRICT (BID) ADVISORY BOARD,
HOLD A PUBLIC MEETING ON THE PROPOSED BID AND
ADOPT THE ATTACHED RESOLUTION OF INTENTION THAT
APPROVES THE ADVISORY BOARD’S REPORT, DECLARES
THE CITY COUNCIL’S INTENT TO FORM A DOWNTOWN BID
AND LEVY THE ASSESSMENT ON BUSINESSES LOCATED IN
THE BID AND SETS THE PUBLIC HEARING FOR NOVEMBER
24, 2003.
RECOMMENDATION
Staff recommends that the City Council adopt a resolution of the Council of the City of
Palo Alto confirming the report of the Advisory Board in connection with the
establishment of the proposed Downtown Palo Alto Business Improvement District
(BID), declaring its intention to establish said district, declaring its intention to levy an
assessment on businesses within said district for fiscal year 2003-04, and set a time and
place for a public hearing on the establishment of the district and the levy of the
assessment.
BACKGROUN~
Downtown merchants have been exploring the possibility of a BID for Downtown Palo
Alto. The BID provides for the assessment of the businesses in the BID to offer a variety
of services, activities and improvements to enhance the economic viability .of Downtown
Palo Alto. The formation of a BID and the levy of assessments against businesses in the
BID to finance improvements and activities benefiting the businesses are authorized by
state law (California Streets and Highway Code Section 36500 and following). The
CMR:481:03 Page 1 of 6
purpose of a BID is to promote and improve a specific geographic area for the benefit of
the businesses in the identified BID area. A BID Advisory Board makes
recommendations to the City Council on the expenditure of revenues derived from the
levy of assessments, on the classification of businesses and on the method and basis of
levying the assessments; and prepares a report, including a budget, for each year that
assessments will be levied.
BIDs have been established in over 200 business areas in California including Mountain
View, San Jose and Burlingame.
Activities that can be funded with BID proceeds include:
Enhanced Downtown maintenance
Promotional events to draw customers to the Downtown
Provision of banners, directional markers, etc.
Paying for a staffperson to coordinate Downtown activities
Coordination of business, City and community interests
Provision of business information, marketing materials and maps to
highlight Downtown businesses
On December 2, 2002, the representatives of the Downtown Marketing Committee
formally presented a petition signed by over 50 downtown businesses during City
Council oral communications. The petition requested that the City Council agendize the
discussion of the Downtown BID and consider passing a Resolution of Intention to
Establish a Downtown BID at a subsequent meeting.
On March 17, 2003, City Council appointed an Ad Hoc Advisory Committee for the
BID. At the time of the appointment, the group was identified as an ad hoc com_rnittee to
explore the feasibility of creating a BID and to make recommendations to the City
Council.
The formal Advisory Board was appointed on September 22, 2003 (with three additional
members from the professional business category added in subsequent action on October
7, 2003), and was directed to prepare a Report to City Council with recommendations for
the establishment of a BID that would include:
Recommended BID boundaries
Recommended method and basis for levying the assessment (cost benefit
analysis)
Recommended improvement and activities that would be accomplished
with BID revenues collected through the assessment
CMR:481:03 Page 2 of 6
Recommended BID budget based on anticipated BID revenues for the first
year of operation
Recommended time frame for initiation of BID assessment and activities
The Palo Alto Chamber of Commerce and the BID Advisory Board have been working
together to refine their respective roles and relationship to ensure compatibility as the
project moves forward. The Chamber of Commerce gave conceptual support for the BID
in August 2002.
Professional businesses in the proposed BID have voiced some concern regarding their
inclusion in the district. The cost benefit analysis takes into consideration the reduced
benefit that professional businesses in the BID will receive. For example, while retailers
and restaurants will receive the greatest benefit, they will pay 100% of the base bid
assessment. Service businesses that will receive less benefit than retailers and restaurants
will pay 75% of the base assessment. Professional businesses that will receive the least
benefit will pay 50% of the base assessment. Benefits that professionals will receive in
the district include: a more viable downtown with services that draw their clients
downtown and provide complementary goods and services; the provision of business
attraction efforts that address vacancies in the BID area; a directory of businesses; and the
opportunity to participate in a more unified business district with enhanced beautification,
cleanliness, and business services.
In addition, while the initial assessment structure was not tiered, the Advisory Board
considered the input of professional businesses on the Board and others who have
provided input, and decided to recommend tiering the assessment in the professional
business category. Because data is only available in ranges of numbers of employees in
this sector, invoices in the first fiscal year (beginning January 1-June 30, 2004) will allow
businesses to report the number of employees so that future decisions regarding a more
tiered professional business category may be explored in subsequent years.
DISCUSSION
The public meeting for October 27, 2003 was noticed and set, as required by BID Law.
Following the public meeting, City Council may adopt a resolution approving the report
of the Advisory Board and declaring its intention to establish a business improvement
district and levy an assessment on businesses in the district.
The Resolution of Intention to Establish a Downtown BID includes the following:
¯Description of the boundaries of the area and identification of any separate benefit
zones.
Name of the proposed area.
CMR:481:03 Page 3 of 6
¯Type or types of improvements and activities to be funded by the levy of
assessments.
¯Statement that, except where funds are otherwise available, an assessment will be
levied annually to pay for all improvements and activities in the area.
¯Identification of the proposed method and basis of levying the assessment, in
sufficient detail to allow each business owner to estimate the amount of the
assessment to be levied against his/her business.
¯Determination of whether new businesses will be exempt from the levy of the
assessment for a period not to exceed one year from the date the business
commenced operating, pursuant to Streets and Highways Code Section 36531.
If the City Council chooses to adopt the Resolution of Intention, the following actions
must be taken, according to BID law:
¯A public hearing (noticed according to BID law) must be held not less than 20 nor
more than 30 days after the adoption of the resolution of intention. (The attached
Resolution would set this hearing for November 24, 2003.
¯At the hearing, the City Council must consider the testimony of all interested
persons for or against the establishment of the BID, the extent of the area within
the BID, and on the furnishing of specified types of improvements or activities by
the BID.
¯Any interested person may make protests orally or in writing. Written protests
must be filed with the City Clerk at or before the time fixed for the public hearing.
If written protests to the establishment of a BID are received from the owners of
businesses in the proposed area, which will pay 50% or more of the total BID
assessment, no further proceedings to create the business improvement area or to
levy the proposed assessment shall be considered for at least a year.
¯At the conclusion of the public hearing to establish the BID, the City Council may
adopt, revise, change, reduce or modify the proposed assessment or the
improvements and activities proposed. If the assessment is increased, the
proceedings would need to be started over.
¯If the City Council, following the public hearing, decides to establish the BID, it
will adopt an ordinance to that effect. The ordinance will contain information
required by BID law including the manner of collection and levy of assessments.
¯In subsequent years, the Advisory Board will file an annual report making
recommendations on the following:
Expenditure of revenues derived from the levy of assessments
Classification of businesses
Method and basis of levying assessments
CMR:481:03 Page 4 of 6
The resolution sets the place and time for the public hearing (November 24, 2003) on the
proposed BID to hear comments, protests and testimony on the establishment of the
business improvement area and the levy of assessments in the BID. At that time, the
effect of protests made by business owners against the establishment of a BID, and the
extent of the area and activities proposed shall be described.
RESOURCE IMPACT
The Economic Development staff in the City Manager’s Office has provided support to
the Ad Hoc Advisory Committee and the Downtown BID Advisory Board, including the
creation of a business database; the preparation of the budget identifying proposed BID
activities; preparation of a comprehensive reference booklet for distribution to
businesses; and development of a cost benefit analysis and assessment formula for BID
assessments contained in the Advisory Board’s Report to City Council.Staff also
prepared and mailed individual notices to each business located in the BID.
The City Attorney’s office has provided legal oversight and direction regarding the
noticing and scheduling of required BID actions.
There are still a number of issues to be resolved before a Downtown BID could become
operational. These include collection issues, reimbursement of costs and other issues
relevant to the establishment of the BID. These issues and revenue impacts will be
discussed in more detail at the time of the public hearing.
POLICY IMPLICATIONS
The establishment of a Downtown BID is consistent with Comprehensive Plan Policies
and was a part of the recommendations for Downtown Pa!o Alto identified in the Retail
Strategy for the City of Palo Alto prepared by Sedway and Associates in June 2000.
The establishment of a BID supports the following Comprehensive Plan Policies:
Polio, B-4 - Nurture and support established businesses as well as new businesses.
Program B-1 - Initiate assessment districts or other programs to facilitate neighborhood
shopping center improvements such as landscaping, parking and access to pubtic
transportation.
Policy B-11 - Encourage the use of public/private partnerships as a means of
redeveloping and revitalizing selected areas.
Policy B-20 - Support and enhance the University Avenue/Downtown area as a vital
mixed use area containing retail, personal service, office, restaurant, and entertainment
uses. Rec%o-nize the importance of an appropriate retail mix, including small local
businesses, to the continued vitality of Downtown.
CMR:481:03 Page 5 of 6
ENVIRONMENTAL REVIEW
This action by the City Council
Environment Quality Act.
ATTACHMENTS
is not considered a project under the California
Attachment 1:
Attachment 2:
Downtown BID Advisory Board Report to City Council
Resolution of Intention confirming the 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 within said district for fiscal year 2003-04, and set a
time and place for a public hearing on the establishment of the
district and the levy of the assessment.
PREPARED BY:
Economic Development Manager
CITY MANAGER APPROVAL,:
IARRISON
Assistant City Manager
CMR:481:03 Page 6 of 6
ATTACHMENT 1
Report of the Advisory Board
With Regard to the
Proposed Downtown Palo Alto
Business Improvement District
For Fiscal Year 2003-2004
As approved by the Advisory Board on
October 20, 2003
October 27, 2003
Introduction
The Advisory Board for the Downtown Palo Alto Business
Improvement District (BID) was directed by City Council on
September 22, 2003 to prepare a report and recommendations
pursuant to Section 36533 of the Parking and Business
Improvement Law of 1989 (Section 36500 and following of the
California Streets and Highways code) (the "Law"). This report is
for the proposed initial fiscal year for the BID commencing July 1,
2003 and ending June 30, 2004. ("Fiscal year 2003-04")
However, because the activities will be provided and an
assessment will be levied only during the period commencing
January 1, 2004 and ending June 30, 2004, estimates in this
report with regard to expenses and assessment proceeds relate
only to that period.
As required by the Law, this report contains the following
information:
1.BID Boundaries and Benefit Zones within the BID;
2.The improvements and activities to be provided for Fiscal
Year 2003-04;
3.An estimate of the cost of providing the improvements
and the activities for that fiscal year;
4.The method and basis of levying the assessment in
sufficient detail to allow each business owner to estimate
the amount of the assessment to be levied against his or
her business for Fiscal Year 2003-04.
5.The amount of any surplus or deficit revenues to be
carried over from a previous fiscal year.
6.The amount of any contributions to be made from
sources other than assessments levied pursuant to the
Law.
Submitted by Stephanie Wansek, Chair, on behalf of the Advisory
Board of the Downtown Palo Alto Business Improvement District
on October 27, 2003. The Board approved this Report on
October 20, 2003 at a publicly noticed meeting of the Advisory
Board.
Received on file in the Office of the City Clerk of the City of Palo
Alto on October 23, 2003.
Section 1: Identification of the boundaries of the BID or any
benefit zones within the BID.
The boundaries of the BID are within the City Limits of the City of
Palo Alto. The approximate boundaries of the BID encompass
the greater downtown area of Palo Alto and extend from El
Camino Real in the East, to Webster Street in the West and from
Lytton Avenue in the North to Addison Avenue in the South (East
of Emerson Street, the boundaries extend only to Fores~Avenue
in the South).
Two benefit zones have been identified based on several reviews
by the Advisory Board on the BID and through discussions with
the BID consultant who also walked the BID. These benefit
Zones are A and B. Zone A encompasses the primary benefit
zone, which is approximately the East side of El Camino Real on
the East to the West side of Webster Street on the West. It
extends from the South side of Lytton Avenue in the North to
Forest Avenue in the South. Zone B encompasses the balance of
businesses in the district, not in Zone A. First floor businesses in
Zone A are in the area of primary benefit. Second floor
businesses in Zone A as well as all businesses in Zone B receive a
secondary benefit and are classified as Zone B businesses for the
purposes of the BID.
A map of the BID Boundaries and benefit zones is available in
Attachment i of this report.
Section2: The improvements and activities to be provided for
Fiscal Year 2003-04.
No improvements are proposed to be provided for Fiscal Year
2003-04. The activities listed in Attachment 2 of this Report are
proposed to be provided annually. Because the BID will exist
only during a portion of Fiscal Year 2003-04, not all of these
activities may be provided during that Fiscal Year though work
may be done on any or all of the activities during the Fiscal Year.
Section 3: An estimate of the cost of providing the
improvements and activities for Fiscal Year 2003-04.
residential businesses that provide lodging services to customers
for less than 30 days.
Professional ,Businesses: Businesses that require advanced
and/or specialized licenses or academic degrees such as
architects, engineers, attorneys, chiropractors, dentists, doctors,
accountants, optometrists, realtors, insurance brokers, venture
capital firms, consultants, advertising and marketing
professionals and mortgage brokers and similar professions.
Financial Institutions: Includes banking, savings and loan
institutions and credit unions
Additional clarification on business definitions will be defined
according to Section 18.04.030 (Definitions) of the Palo Alto
Municipal Code.
The Advisory Board recommends that the following businesses be
exempt from the BID assessment:
New businesses established in the BID area following
the annual assessment
Non-profit organizations
Newspapers
The Assessment calculated shall be paid to the City no later 30
days after receipt of the invoice with the amount of the annual
assessment sent by the City. A second notice will be mailed as a
reminder to businesses that have not remitted payment by that
date.
Section 5: The amount of any surplus or deficit revenues to be
carried over from a previous fiscal year.
Because the BID is a newly proposed district, there is not surplus
or deficit.
Section 6: The amount of any contributions to be made from
sources other than assessments levied pursuant to the Law.
Assessment proceeds are estimated to be approximately
$101,000 for Fiscal Year 2003-04. Assessment proceeds will be
spent only on activities authorized in the resolutions of the City
Council of the City of Palo Alto establishing the BID and/or
levying the assessments.
In this first year of operations, there will not be any additional
contributions from any source other than the BID assessments
for the completion of BID activities.
Attachments:
Attachment 1: Recommended BID Boundaries
Attachment 2: Budget of Recommended FY 2003-04 BID
Activities
Attachment 3: BID Cost Benefit Analysis
Attachment 4: BID Assessments
Attachment 1
The Cily of
Palo Alto
Proposed
Downtown Palo Alto
Business Improvement District
This map is a product of the
City N Palo Alto GIS
Attachment 2
Proposed BID Budget
January 1-June 30, 2004
Marketing and Promotions ~
Business Directory, conceptual $12,000
development of directional signs,
special events planning
Graphic Design (logo design,$ 8,000
banner design, branding, ad designs,
Website)
Banners and hardware (1 time)$18,000
Beautification (Planning for signage,
enhanced tree lighting $12,000
and seasonal planting)
Operations
Staff (Salary for six months, incl. Benefits)S27,500
Printing, supplies
Mailing ($370 x 6)
Phone
Travel
One time start-up costs (computer,
printer, fax, copy machine, furniture,
etc.) online access
Audit
Collection costs
Contingencies
Anticipated BID Budget (6 months)
$ 2,000
$ 2,200
$1,200
$ 5oo
$ 5,000
$ 3,000
$ 5,ooo
$ 4,600
$101,000
*Funds spent for activities will be reduced as needed to pay for overhead,
administration and/or collection costs
** As much as possible, the intention of the BID is to spend BID dollars locally within
the BID
Attachment 3
A General Statement Regarding Cost-Benefit Analysis For
BID Businesses Using The Traditional Three 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 after reviewing over 100 BIDs in California, 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 fiat
rate regardless of location or size and lodging businesses that are typically charged by
total rooms. Financial institutions are assessed at a higher level because of Community
Reinvestment Law objectives that encourage investment in the local community.
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) Location 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 benefit 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, i.e., two half-time employees total one full-time. Fractions are rounded down
to the nearest whol 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 fee is as follows:
¯Small:50% of base assessment
¯Medium: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*
The above break down was arrived at based on the Advisory Committee’s review of
anticipated benefits that would accrue to businesses based on size, type and location of
the BID business. For example, since retail and restaurants are more labor intensive,
the benefits accruing to these businesses are more a feature of type and location.
Therefore, the employee (size) criterion is broader-to focus on the other two factors in
gauging business benefit.
Attachment 4
Downtown Palo Alto Business Improvement District
Su.q.qested Annual BID Assessment
Retailers and
Restaurants
(lOO%)
ZONE A ZONE B
(~
$225.00 (Under 6 FTE employees) (50%)
$340.00 (6 to under 11 FTE employees) (75%)
$450.00 (11+ FTE employees) (lOO%)
$170.00
$250.00
$340.00
Service
Businesses
(75%)
$170.00 (Under 4 FTE employees) (50%)
$250.00 (4 to under 7 FTE employees) (75%)
$340.00 (7+ FTE employees) (lO0%)
$130.00
$190.00
$250.OO
Professional
Businesses $170.00 (Under 5 FTE employees) (75%)$130.00
(50%)$225.00 (5+ FTE employees) (lOO%)$170.00
Lodging
Businesses $225.00 (up to 20 rooms) (50%)$170.00
(lOO%)$340.00 (21 to 40 rooms) (75%)$250.00
$450.00 (41+ rooms) U0o%)$340.00
Financial
Institutions $500.00 $500.00
Note 1: For retail, restaurant, service, and professional businesses size will be determined by
number of employees either full-time or equivalent (FTE) made up of multiples of part-time
employees. Lodging facilities will be charged by number of rooms available.
Note 2: Second floor (and higher) businesses located within Zone A will be assessed the same
as similar street-level businesses located within Zone B.
Note 3: Assessment amounts are rounded to the nearest ten dollars.
ATTACHMENT~
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO CONFIRMING THE 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 WITHIN 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
WHEREAS, the City of Palo Alto (the "City") is a charter
city organized and existing under the laws of the State of
California; and
WHEREAS, it is in the public interest to promote the
economic vitality and physica! maintenance of business districts
within the City in order to prevent erosion of the business
districts and to attract and retain businesses; and
WHEREAS, the Parking and Business Improvement Area Law
of 1989 (California Streets and Highways Code Sections 36500 et
seq.) (the "Law") provides that the City may establish a parking
and business improvement area (a "PBIA") for the purpose of
providing improvements and promoting activities within a PBIA
and may levy an assessment against businesses within a PBIA to
fund improvements and activities; and
WHEREAS, downtown businesses have been exploring the
possibility of a PB=_~ for downtown Pa!o Alto; and
WHEREAS, the City has received a petition signed by the
owners or authorized representatives of over fifty down<own
businesses requesting that the City initiate proceedings for the
formation of a PBIA for the downtown area; and
WHEREAS, pursuant to its Resolution No. 8339 adopted on
September 22, 2003, as amended by its Resolution No. 8341,
adopted on October 7, 2003, the City Counci! (i) appointed an
Advisory Board (the "Advisory Board") for the proposed Downtown
Pa!o .~o Business improvement ~ -~ ~~:s~.:c~, a proposed PBIA, (ii)
....... e~ the oreoararion of a reoort by the Advisory Board
oursuant ~~_~c=~ion 36533,~,~,; ~ ...... eh= Law; and, ,..~i) set the time
and place for a public meeting and public hearing to receive
:es:imony on the proposed esZab!ishment of the Downtown Business
improvement District and <he proposed assessment.; and
031020 sm 0100142
WHEREAS, in accordance with Section 36533 of the Law,
the Advisory Board prepared and filed with the City Clerk a
report entitled "Report of the Advisory Board with Regard to the
Proposed Downtown Palo Alto Business Improvement District for
Fisca! Year 2003-2004" (the "Report"). The Report is on file in
the office of the City Clerk and open to public inspection.
NOW, THEREFORE, the Council of the City of Palo Alto
does RESOLVE as fol!ows:
SECTION !. The City Council hereby approves the Report
as filed by the Advisory Board and, pursuant to the Law, the
City Council declares its intention to establish the Downtown
Palo Alto Business improvement District (the "District") and to
levy and collect an assessment against businesses within the
District for Fisca! Year 2003-2004 (July i, 2003 through June
30, 2004). Such assessment shall be in addition to any other
assessments, fees, charges or taxes imposed by the City.
SECTION 2. The boundaries of the District are within
the City limits of the City of Pa!o Alto (the "City") and
encompass the greater downtown area of the City, generally
ex~ending from E! Cam!no Real to the East, Webster Street to the
West, 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 at<ached hereto as Exhibit "A" and incorporated
herein by reference for a complete description of the boundaries
of the District.
SECTION 3. The types of improvements to be funded by
the levy of an assessment against businesses within the District
~= ~_.e acauis~ion, construction, instailat~on or maintenance
of any tangible ~p~ope.~y with an estimated useful life of five
.v~=:= or more. ~he types of aCEAV!EAes tO be funded by the _~=vv_
of an assessment against businesses within the District are the
promotion of public events which benefit businesses in the area
........and wh{~h take m!ace on or in public m!aces within the
the furnishing of music in any public place in the District; and
activities which benefit, businesses located and operating in the
Dis=tic:.No improvements are proposed to be funded in Fiscal
Year 2003-04. Reference is made to the Repot: for a description
of the activities to be funded by the Dnsrr~cz ...._.~n F~sc=== -’ Year
2003-04.
031020 sm 0100142
SECTION 4. Except where funds are otherwise available,
an assessment wil! be levied annually to pay for al!
improvements and activities within the District, commencing with
Fiscal Year 2003-04.
SECTION 5. The proposed method and basis of levying the
assessment is set forth in Exhibit "B" attached hereto and
incorporated herein by reference. Assessments for Fisca! Year
2003-04 are proposed to be prorated, with businesses within the
District assessed one-half of the proposed amount of the annual
assessment.
As set forth in Exhibit "B", 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 E! Cam!no Rea! to the East,
the west side of Webster Street to the West, 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 al! businesses not !ocated in Zone A. in addition, al!
upper f!oor businesses in Zone A are considered to be Zone B
:businesses. Reference is hereby made to the map of the District
attached hereto as Exhibit "A" for a description of the zones.
SECTION 6. New businesses established in the District
after the beginning of any fiscal year shal! be exempt from the
levy of the ~ ....__assessme.~ for ~h=~ fiscal year. In addition, non-
profit organizations and newspapers in the District shall be
exempt from the assessment.
SECTION 7. On October 27, 2003, the City Council held
a noticed Public Meeting regarding the establishment of the
District and the levy of the assessment against businesses
located in the District. At the Public Meeting’, all persons had
an opportunity give public testimony regarding the establishment
of the District and the Zones therein, and the levy of the
assessment.
SECTION 8. The City Council will hold a Public Hearing
on November 24, 2003 at 7:00 p.m. or as soon thereafter as
practicable, in the City Counci! Chambers at 250 Hamilton
Avenue, Palo Alto, California, 94301.
Am the Public Hearing, the testimony of ~ ~ ~=~ ~ ¯.-~:~ ~n~es~e~
nersons regarding the establishment of the u~s~,c~,~i -_i ~ the extent
the ~:~:~ the Assessment, the ~s~n~ of smecific
031020 sm 0100142 3
types of improvements and activities by the District for the
Fiscal Year 2003-2004 levy of the assessment shal! be heard. A
protest- may be made orally or in writing by any interested
person.
Any protest pertaining to the regularity or sufficiency
of the proceedings must be in writing and shal! clearly set
forth the irregularity or defect to which the objection is made.
Every written protest must be filed with the City Clerk
at or before the time fixed for the Public Hearing. The City
Counci! may waive any irregularity in the form or content of any
written protest and at the Public Hearing may correct minor
defec=s in the proceedings. A written protest may be withdrawn
in writing at any time before the conclusion of the Public
Hearing.
Each written protest must contain a description of the
business in which the person subscribing the protest is
interested sufficient to identify the business and, if a person
subscribing is not shown on the officia! records of the City as
the owner of the business, ~h ~u~.e protesu shal! contain or be
accompanied by written evidence that the person subscribing is
the owner of the business. A written protest which does not
comply with the requirements set forth in this Section will not
be counted in determining a majority protest (as defined be!ow).
if, at the conclusion of the Public Hearing, written
protests are received from the owners of businesses in the
District which " ~w::: pay 50 percent or more of the Assessment
proposed to be levied and protests are not withdrawn so as to
reduce the protests to less than that 50 percent (i.e., there is
a majority protest), no further proceedings to create the
~!~’strict, or to !evv_ the assessment, as described in this
Resolution,sn==:~ -~ be taken for a period of one year from the
date of the finding of a majority protest by the Ci=v Council.
if the majority protest is only against the furnishing
of a specified_ ~ype or tvme~__ of _mp~ov_me.._~ ~ -= ~r or activity within
:he D{strict, those types o{ { ~ v m= ~ or - ~-’~{-be_ ~m~o e ~n~s =cu=~!~_=s must
SECTION 9.The City Clerk is direcned to give such
~: = of the Pubi~ Hearing as {s required by law.nou:c ....
031020 sm 0100t42 L!
SECTION !0. The Council finds that this is not a
project under the California Environmenta! Quality Act and,
therefore, no environmenta! impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
City Attorney City Manager
Director of Administrative
Services
031020 sm 0100142
EXHIBIT "A"
i
Palo Alto
Proposed
Downtown Palo Alto
Business Improvement District
This map is a product of the
City of Palo Alto GIS
EXHIBIT ~B"
Downtown Palo Alto Business ~mprovement District
Annual Assessment
Retailers
and
Restaurants
(lOO%)
ZONE A ZONE B
(75%)
$225.00 Under 6 FTE emp!oyees) (50%)$170.00
$340.00 6 to under II FTE employees)(75%)$250.00
$450.00 II+ FTE emp!oyees) (100%)$340.00
Sex.ice
B~sinesses
(75%)
$170.00
$250.00
$340.00
Under 4 FTE employees) (50%) $130.00
4 to under 7 FTE employees) (75%) $190.00
7+ FTE emp!oyees) (100%) $250.00
Professional
B~sinesses
(50%)
S!70.00 Under 5 FTE employees) (75%)
~2~ 00 5+ FTE emp!oyees) (100%)
S!30.00
$170.00
Lodging
B~sinesses
(.00~)
$225.00
<340.00
$450.00
up to 20 rooms) (50%)
21 to 40 rooms) (75%)
41+ rooms) (100%)
$170.00
$250.00
$340.00
Financial
Insti tutions $500.00 $500.00
Note i: For ~ ~ ~’:e~a±l, ~=staurant, service, and m~o~ssiona!
businesses sizew=_._-’ ~i be determined by nu_mber of emm!oyees~ either
full-rime or equivalent (FTE) made up of multiples of part-time
employees. Lodging businesses will be charged by number of
rooms available. Full-time emmlo~ are those working a ~÷-~
--~ 2,000 hours per year. ~<t-t~m= emm!ovees a~= grouped into
full-time job positions, i.e., two half-time employees total one
full-time.
Note 2: Second floor (and higher) businesses located within Zone
A will be assess=~ zhe same as sim:~ -~.~eu ~eve_~~a~ s~= ~-~] businesses
!ocaned within Zone B.
031020 ~ 0100142
Note 3: Assessment amounts are rounded to the nearest ten
dollars.
Note 4: Retailers and Restaurants include: Businesses that
buy or resel! goods such as clothing stores, shoe stores, office
supplies as well as businesses that sell prepared food and
drink.
Service Businesses include: Businesses that sel! services such
as beauty or barber shops, repair shops, most automotive
businesses, dry cleaners, art and dance studios, printing firms,
film processing companies, travel agencies, entertainment
businesses such as theatres, etc.
Lodging Businesses include: Businesses that have as their main
business the lodging of customers. This is restricted to
residentia! businesses that provide !odging services to
customers for less than 30 days.
Professional Businesses include: Businesses that require
advance and/or specialized licenses or academic degrees such as
architects, engineers, attorneys, chiropractors, dentists,
docnors, accountants, optometrists, realtors, insurance brokers,
venture capital firms, consultants, advertising and marketing
professionals and mortgage brokers and similar professions.
Financia! institutions include:
insti=utions and credit unions.
Banking,savings and loan
031020 sm 0100142
ATTACHMENT 2
City of Palo Alto
City Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER
I10
DEPARTMENT: City Manager
November 17, 2003 CMR: 505:03
REPORT ON B~D ADVISORY BOARD ACTIVITIES AND
RECOMMENDATON TO ADOPT A RESOLUTION TO SET THE
PLACE AND TIME FOR A PUBLIC MEETING (DECEMBER 15,
2003) AND PUBLIC HEARING (JANUARY 12, 2004) ON THE
ESTABLISHMENT OF A DOWNTOWN BID AND DIRECT THE
ADVISORY BOARD TO PREPARE A REVISED REPORT TO CITY
COUNCIL ON THE PROPOSED BID
RECOMMENDATION
Staff recommends that the City Council adopt Resolution No. __
a.
and Resolution No.
Setting December 15, 2003 at 7:00 p.m. (or as soon thereafter as is
practicable) in the City Council Chambers as the time and place for a
rescheduled public meeting on the proposed Business Improvement
District (BID). The Council may also consider approval of the Report of
the Advisory Board on the BID and Resolution of Intention to Establish a
Downtown BID on that date.
Setting January 12, 2004 at 7:00 p.m. (or as soon thereafter as is
practicable) in the City Council Chambers as the place and time for a
rescheduled public hearing to hear comments, protests and testimony on
the establishment of a downtown BID. An ordinance to establish the
Downtown BID may be considered at that time. And
Directing the BID Advisory Board to submit a revised Report to City
Council on the proposed BID.
BACKGROUND
The BID Advisor3, Board (Board), appointed on October 7, 2003, submitted its report to
City Council on October 27, _00~, which included recommendations on the BID
CMR:505:03 Page 1 of 4
boundaries; method and process of assessing businesses in the BID; description of BID
activities and the proposed BID budget.
After hearing the testimony of Board members and businesses in the proposed BID
district and a discussion of the assessment methodology, the City Council conceptually
approved the BID and directed the Board to review the proposed assessments of
businesses in the BID. Of particular interest was the creation of a category for single-
person businesses in the professional category operating in the district. Council also
suggested that the Board consider a method of increasing the assessment for the largest
businesses.
DISCUSSION
The Board has met several times since the City Council session to discuss and deliberate
on the most equitable manner to accomplish these objectives. Attached to this staff
report is an assessment methodology (Attachment 2) that has been revised to:
Establish an exemption 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)
Establish an assessment specifically for single-person businesses in the
professional business category of the BID
Tiers other professional businesses by size, based (according to benefit) on
the new single-person business criteria
Board members unanimously favored this new breakdown. The Board considered a
similar breakdown for other business categories (such as retail, restaurants, banks, hotels
and service businesses), but felt that it was justified only for the professional business
classification because professional businesses will receive the smallest benefit from the
BID.
The Board also explored increasing the assessment for Downtown’s largest businesses.
Its recommendation is that the assessment as presently tiered represents the nexus
between the assessment and the benefit accruing to the business. At this time, the
recommendation is to leave the largest businesses’ assessment as originally proposed.
Following the first six months of operation (January 1, 2004-June 30, 2004), the Board
will review the database and assessments and will recommend any changes to City
Council at the time of the annual reauthorization of the BID.
CMR:505:03 Page 2 of 4
A noticed public meeting set and held by the City Council is required by the BID law.
The attached resolution sets the rescheduled public meeting to hear comments on the
proposed establishment of a BID on December 15, 2003. At that time, the Board will
again submit its report and recommendations to City Council for their formal review and
consideration for approval. Following tile public meeting, City Council may approve the
report of the Board and may consider adopting a Resolution of Intention to Establish a
Business Improvement District. The steps required to establish the BID are fully detailed
in CMR 481:03 (attached).
RESOURCE IMPACT
The City resources utilized to-date and anticipated to be required in the future are detailed
in CMR 481:03 (attached).
ENVIRONMENTAL REVIEW
This action by the City Council is not considered a project under the California
Environment Quality Act.
ATTACHMENTS
Attachment 1
Resolution Of The Council Of The City Of Palo Alto Directing The Preparation Of A
Revised Report For Fiscal Year 2003-2004, And Directing That Notice Be Given Of A
Rescheduled Public Meeting And Public Hearing In Connection With The Proposed
Establishment Of The Downtown Business Improvement District And The Proposed
Levy Of An Assessment Against Businesses Within Such District
Attachment 2
Downtown Palo Alto Business Improvement District Suggested Annual BID Assessment
Attachment 3
A: CMR436:03 9/22/03
B.: CMR 457:03 10/7/03
CMR:505:03 Page 3 of 4
PREPARED BY:
Su~an Arpan, Economic Development Manager
CITY MANAGER APPROVAL:
Emil~son, Assistant City Manager
CMR:505:03 Page 4 of 4
Attachment 1
NOT YET APPROVED
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO DIRECTING THE PREPARATION OF A REVISED
REPORT FOR FISCAL YEAR 2003-2004, AND DIRECTING
THAT NOTICE BE GIVEN OF A RESCHEDULED PUBLIC
MEETING AND PUBLIC HEARING IN CO~ECTION WITH
THE PROPOSED ESTABLISHMENT OF THE DOWNTOWN
BUSINESS IMPROVEFIENT DISTRICT AND THE PROPOSED
LEVY OF AN ASSESSMENT AGAINST BUSINESSES WITHIN
SUCH DISTRICT
WHEREAS,the City of Palo Alto (the "City") is a charter
city organized and existing under the laws of the State of
California; and
h~EREAS, it is in the public interest to promote the
economic vitality and physica! maintenance of business districts
within the City in order to prevent erosion of the business
districts and to attract and retain businesses; and
WHEREAS, the Parking and Business Improvement Area Law
of 1989 (California Streets and Highways Code Sections 36500 et
seq.) (the "Law") provides that the City may establish a Parking
and Business Improvement Area for the purpose of providing
improvements and promoting activities within a business district
and may levy an assessment against businesses within a Parking
and Business Improvement Area to fund improvements and
activities; and
WHEREAS, do%~town business merchants have been exploring
the possibility of a business improvement district for downtown
Palo Alto; and
WHEREAS, the City has received a petition signed by the
owners or authorized representatives of over fifty downtown
businesses requesting that the City initiate proceedings for the
formation of a Parking and Business Improvement Area for the
downtown area; and
WHEREAS, the City Counci! pursuant to its Resolution No.
8339, adopted on September 22, 2003, as amended by its
Resolution No. 8341, adopted on October 7, 2003, appointed an
advisory board (the "Advisory Board") in connection with the
formation of a Parking and Business Improvement Area for the
downtown area to make recommendations to the City Council on the
expenditure of revenues derived from the levy of assessments, on
031112 sm 0100160 !
NOT YET APPROVED
the classification of businesses, as applicable, and on the
method and basis of levying the assessments, set October 27,
2003 as the date of a public meeting on the establishment of the
District and the levy of the assessments and November 17, 2003
as the date for a public hearing on the establishment of the
District and the levy of assessments; and
WHEREAS, on october 27, 2003, the Advisory Board
submitted its report to the City Council and the City Council
held a public meeting on the establishment of the District and
the !evy of assessments; and
WHEREAS, following the public meeting on October 27,
2003, the City Council directed the Advisory Board to review the
proposed assessments on businesses in the District and submit a
revised report.
NOW, THEREFORE, the Council of the City of Palo Alto
does RESOLVE as follows:
SECTION !. The Council hereby directs the Advisory
Board to prepare and file with the City Clerk, in accordance
with Section 36533 of the Law a revised report for fiscal year
2003-2004 in connection with the proposed establishment of. the
District.
SECTION 2. The Council hereby sets December 15, 2003 as
the date for a reschedu!ed public meeting on the establishment
of the District and the levy of assessments and January 12, 2004
as the date for a rescheduled public hearing on the
establishment of the District and the levy of assessments. Both
the public meeting and the public hearing will be held at 7:00
p.m., or as soon thereafter as practicable, in .the City Counci!
Chambers at 250 Hamilton Avenue, Pa!o Alto, California.
SECTION 3. The City Clerk is directed to give notice of
the reschedu!ed public meeting and the public hearing as
required by law.
//
//
//
//
031112 sm 0100160
2
NOT YET APPROVED
SECTION 4. The Council finds that this is not a
project under the California Environmental Quality Act and,
therefore, no environmental impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
City Attorney City Manager
Director of Administrative
Services
031 ] 12 sm 0100160
Attachment 2: Downtown Paio Alto Business Improvement District
Suqqested Annual BID Assessment
Retailers and
Restaurants
(100%)
ZONE A ZONE B
(75%)
$225.00 (Under 6 FTE employees) (50%)
$340.00 (6 to under 11 FTE employees) (75%)
$450.00 (11+ FTE employees) (lOO%)
$170.00
$250.00
$340.00
Service
Businesses
(75%)
$170.00 (Under 4 FTE employees) (50%)
$250,00 (4 to under 7 FTE employees) (75%)
$340.00 (7+ FTE employees) (1oo%)
$130.00
$190.00
$250.O0
Professional
Businesses
(50%)
EXEMPT (25% or less FTE employee, including the business owner)
$ 60.00 (26% FTE to 1 FTE employee) (25%)$ 50.00
$120.00 (2 to 4 FTE employees) (50%)$ 90.00
$170.00 (5 to 9 FTE employees) (75%)$130.00
$225.00 (10+ F-I-E employees) (loo%)$170.00
Lodging
Businesses
(lOO%)
$225.00 (up to 20 rooms) (5o%)
$340.00 (21 to 40 rooms) (75%)
$450.00 (41+ rooms) (10o%)
$170.00
$25O.OO
$34O.OO
Financ~l
~sdtudons $500.00 $500.00
Note 1: For retail, restaurant, service, and professional businesses, size will be determined by
number of employees either full-time or equivalent (FTE) made up of multiples of part-time
employees. A full FTE equals approximately 2000 hours annually. Lodging facilities will be
charged by number of rooms available and banks will be charged a flat fee.
Note 2: Second floor (and higher) businesses located within Zone A will be assessed the same
as similar street-level businesses located within Zone B.
Note 3: Assessment amounts are rounded to the nearest ten dollars.
TO:
Attachment 3A
City of Palo Alto
Manager’s Report
FROM:
DATE:
CITY ML~NAGER DEP?~RTI~NT: CITY IvLa~NAGER
SE.PT~_ ¢__BER 22, ~.00o CMR:
~CO?~N~AT!ON TO .~OPT A ~SOLUT[ON
T~ ?~ ~OC J~qSORY COS~TTEE 5{E.~ERS AS T~
FO~ ~qSORY BOJ~ T~4T ~L P~PJ~ T~
~PORT _%b~ ~COS~N~ATIONS TO CITY COU~C~ ON A
DO~TO~ BUS~SS ~ROY~.5~NT DtST~CT ~);
D~,CT T~ DO~TO~.~ B~ ~%qSORY BO~ TO
P~P~ T~ ~.PORT TO T~ C!TY CO~C~ T~hT IS
~QU~.D BY B~ LAW; .~ND SET T~E PLACE ~b~ TiS~ FOR
A PUBLIC ~ETB~G (OCTOBER 27, 2003) ~b~ P<NLtC
~_~G ~O~g’IBER 17, 2003) ON T~ EST_~LtS~NT OF
A DO~’TO~¢q B~
~COS~::NDATtON
Staff recommends that *,he Ci~, Council:
1. Adopt the resolution, which appoints flae Ad Hoc Advisory Co ~mmi.i~ee Members
as the Advisory Board that will prepare the required Repox and
Recommendations to CiD; Com~cil on a Downto~n BID.
Direct 5~ Downtown BID Advisoo, Board to prepare the report to City Council
required by BID law and provide recommendations that wili include:
o Expenditure of revenues derived from the levy of assessments
o Classification of businesses
o Method and basis of lew~g assessments
Set October 27, 2003 at 7:00 p.m. (or as soon thereafter as is practicable) in the
Council Chmabers as the time and place for a punic meeting on the proposed
BID. The Council may also consider approval of the Repo~ of the Advisou
Board on the BID and Resolution of Intention to Establish a Downtown BID on
that date.
.+ ....~" is ~racticabte) in the3. Set November i7, 2003 at7:00 p.m. (or as soon ~,.,,.aff,~, as .
CMK:436:03 Page ! of 7
C~D’ Council Chambers as the place a~d ti~e £or a pubtic hea~-Kn~ to he~
comrnen~s, l~OteStS and testimony on the establist~ment of a do~m~own BID.
Downtown Merct~nts have been ex;)loffmg *&e possibility of a BID for Downtow-n Palo
A_lto. _The BID w~ assess businesses pro~dde a vm-iety of sendces to e~_hance the
economic viability of Do~,-ntown Palo ANto. The formation of a BiD and ~dae le~y of
assessments against businesses in the BID to finance improvements and activities
benefiting r_he businesses m-e authorized by state law (California Streets and YAghway
Code Section 36500 and fo!lowing). The pu~ese of a BID is to promote .and improve a
specific geo~aphic area for the benefit of the businesses in the identified BID area. A
BiD Adviso.D, Board mazkes recon~mendations to the City Council on the expenditure of
revenues derived fl’om the levy of assessments on the classification of businesses and the
method and basis of le~@ng the assessments and prepares a report, including a budget,
for each year that assessments will be levied
BIDs have been established in over 200 bu~L~,.ss~: areas in California including_ Mountain
View, San Jose and Burlingame.
Activities that can be funded with BiD proceeds include:
E~lnanced Downtown maintenance
n,-.~,.; ~,., o I events ~o ~aw customers ~ r,n ~ D owntov~
Provision ofb~ers, dffecfional mm-kers, ~tc.
Pay~g £or a s~ffperson to coor~nate Downto~m activities
Coordination of bus~ess, Ci~ ~d co~,~fib’ ~terests
Provision ofbus~ess ~%~ation.. m~ke~ materials and maps to ~lfl~ght~_ __
Downtown bus~esses
DISCUSSION
Downtown Palo Adto has long been -lmown as a thziving, dynamic business district. To
the crealt of many local merchants, the success of the Dow,~o,,,~ has been a~a;med
through the ef~%~-ts of volunteers such as those who part~icipate in the Downtown
Marketing Committee of the Palo A_lto Chamber of Commerce. While the efforts of
these volunteers have made a positive impact on the area, it is dear that many
opporamities to increase the viabilib, of the. Do,amtox~m are missed because business
Civ~.:436:03 Paoe ~ of 7
o~mers and operators c~,~a~not successfl~lly ran businesses and provide the marketing and
other sendces needed to stzengthen the Downtown. For ~is reason,, the Downtow-n
Marke~d~g Committee of the Chamber (Coma~ttee)... representing both members and non-
members of the Chamber, identified the need i%r a Downtov,-n BID.
On D,.,.emb~.r’ ~ ,~-’,° 2002, the representatives of~e Com.rnittee ~or-maliy" " presented a petition
signed by over 50 downtown businesses dtufing City Council oral com~m-~ica~o~. The
pefi.-don requested that the City Council agendize the discussion of the Downtown B~
and consider passing a Resolu~on of Inten~on to Establish a Downtowm BID at a
subsequent meetdng.
On March 17, ,00_~, Ci~-CouncLl .appointed an Ad Hoe Advisow Committee zor the
BID. At the ~dme o~ th.." ~ ~a~pomtm.n,, group was ~denaned as an ad hoe commigee tO
explore the ~%asibi!ity of creating a BID and to make recon-mnendafio~ to the City.
Counci!. The BID law requires a formal A&4sow Board to be established that will
submit annuat reports and recommendations to City Council with respect to the BID
assessment and e~enditures. The BID law authorizes appointment of the Advisow
Board prior to establishment of the BID. As the Ad Hoe Committee has been meeting
re=.m.flarly s~ce March and has provided the leadership for ~s ..~tiafive, staff~
recom_mends that this committee be formalized .and named as the A&4sory Board to
~repare the annual re~o~s and ~ ~~" .....~recommenaa~ons to Cib: Council on a ~owmo,a,n B!D.
In July and_Auo~,st_._. o~ ~_00_~, an intern was hired by the City to develop a database of
businesses iocated in the BID area. The intern walked the dL.mct several ~fimes and
~ctenaneo every ad:~ess and business in the &’strict. Her nna:m_s suppo~.’ted prior .... ~-
on the BID database of businesses and resulted in the identification of 913 bus~esses.
To be certain that all businesses in the BID were informed and could become involved in
the plarming of the BID, the Committee sent letters to each bnsiness owner in the
proposed area, identi~g the proposed BID boun&ri’es, benefits Of" the BID, activities
that could be accomplished and an estimate of" revenues that could be anticipated from the
collection of" a downtown BID assessment. Multiple discussions at monflfly Do~.~town
Marketing meetings and several additional meetings were held to discuss the BID for
Downtown Palo Alto with a=ected ....merchants. Meeings were he!d.on the ,_oLo’-" ~ ~a."mo~
dates and times:
Augtsst.~ ~ 1 8 an~
August 28, 2002 6pro
September 18; 2002
Cardinal Hotel
Blue Chalk.- Care
Cardk~al Hotel
Cl~flZ:436:03 Page 3 of 7
September 18, 2002 6pro
November 20, 2002
Ju!y~ 30, 2003 9am
Blue ChaLk
Chamber Mix." er @ Zibibbo Restore-ant
Cardinal Hotel
For the meeting that was held on July 30, 2003, a flyer was taken to eve~ business
~4thin the proposed BDD boundaries to infoi,-m each business of the date, time and
!ocation of the business outreach meeting and imdte them to br:mg any concerns or
comments for ~ -~’ "~.u ther co~meranon.
’"Oc,.om.~ 8. 2003 at 9:00 am at.’An additional business outreach meeting ,~s sched’aled for " : ~- .
the Cardinal Hotel to Once again hear any comments and answer any questions
concerning the proposed BID.
A noticed public meeting set and a~ended by the City Council is also requbed according
to BID law. The at*ached resolution sets the public meeting to hear comments on the
proposed establishment of a BID on October 27, 2003. Following the punic meeing,
Ci~ Council may approve the report of the A&dsory Board and may consider adop~g a
Resolution of Intention to Establish a Business Improvement Disu-ict.
The Resolution of Intention to Establish a Downtown B!D must include the fol!owing:
DesmJption of the boundaries of the area and identification of an5, separate benefit
zones.
¯Name of the proposed area.
~Type or ,,,,~v~,.~ ~’-~,,~’ ~Lmp~ovom.~¢~. ~ ....and act~w_nes .....to be ftmded by. the,. le~w of
assessments.
Statement that, except where funds are otherwise available, an assessment wiI1 o~
levied armually to pay for all improvements and activities in the area.
¯Identification o~ the proposed method and basis of !evying the .~ ’ ~ *
sufficient detail to a!low each business owner to estimate the amount of the
assessment to be levied against Ms/her business.
Determination of whether new businesses will be exempt from the le~ of the
assessment for a period not to exceed one year from the date the business
commenced operating, pursuant to Streets and Highways Code Sec~on-36531.
. ,:o,_1 owing actionsIf the Ci~ Council chooses to adopt the Resolution of Intention. J~e " ~ "
must be taken:
A public hea~=mg (noticed according to BD law) must be held not less ~&an 20 or
more th~ 30 days a2er &e adopflo~ o~ &~ zesd~do~ of intrados.
resolution wo~d set ~s h~m~g for November t7, 2003).
At ~e he~, ~h~ Cib Co~cH must co~ider ~e tes~ony of ~1 ~terest~d
perso~ for and a~t ~e ~stabHs~ent of ~e B~, ~e ~xtent of th~ ~a wi~
¯ e B~, ~d on ~ ~s~ of specified b~es of ~prowm~nts or activities by
¯ ~ B~.
~my ~terested person may m~ke protes~ or~ly or ~ wring. Wfi~en protests
must be ~ed wi~ ~e Ci~ Clerk at or before ~e t~e ~(ed for ~e pgo~c hem4mg.
If wfiaen protests to ~e establishment o5 a B~
businesses ~ ~e proposed ~ea, w~ch w~ pay 50% or more of ~e tot~ BD
assessment, no ~m~er procee~gs to create ~e business ~provement ~ea or to
tew the proposed assessment shall be considered for at least a year.
At ~e conclusion of ~e public he~g to estabEsh ~e BID, ~e Cib, Co,~cii may
adopt, revise, ch~ge, reduce or modi~, ~e proposed assessment or
~provements ~d acdvifies proposed.
Iz me CiW Cocci1.. zollowm~ *&e public h~. =, decides to establish ~e BD,. it
will adopt ~ or~ce to ~at eff%ct. The ord~ce
req~ed by BD law ~clu~g the m~er o£ collec~on ~d Iew of assessments.
~ subsequent years ~e Advisow Bom-d w~l file ~ ~ual report, m~g
r~co~ndaao=.~ on ~e zo!towm~:
o Expen~e of revenues derived from the lew of assessmen~
o Classification of businesses
o Method rand basis oz le~5~_ assessments
The a~mched resolution sets the place and time for the public hear~mg on the proposed
BID to hear con~:nents, protests and testimony on the establisMnent of the business
improvement area and the lew of assessments in the BID. At that ~e, the eff%ct of
protests made by business owners against the establishment of a BID, the extent of the
caca and activities proposed shall be described.
The Economic Development Division in the Cib; Manager’s Office has provided staff
support to the Advisow Coma~gee. Economic Development staff have overseen the
creation of a business database and cross referenced it with Reference USA, an electronic
database, to ensm-e that all downto’a,n businesses wi*&in the B_~ bounda~-ies are
identified. In addition, staff have assisted in *the preparation of the budget identif,ing
proposed BID activities, prepared a com. prehensive reference boomer for disuibution to
C!~,.:436:03 Page 5 of 7
businesses and worked with a consultant to develop the cost benefit analysis and
assessment formula for BID assessments. .,ta~ will also prepare and maH in~vidual
notices to each business located in the BID prior to the public meeting.
The Ci~ A~omey’s office has provided iegM oversight and direction regarding the
noticing and scheduling of required BID actions.
There are still a number of issues to be resoh, ed ~ erore a Downtown BID could become
operational. For example, since the Ci~ collects the assessment, impacts to the
A&ministra,five Services Depm-~ent must be considered. The Ci~" of Palo A_ko does not
have a ousmess license tax, so mere was not an"’~-’;.~*;-’~ database available for
co!lection of BID assessments. Now *..hat the Ci~ has created a database of do~atown
businesses, a methodolog-y r%r the collection of the BID assessments must be developed.
City. staff fi-om aff%cted depamments wii! reconcile t~hese issues, gauge impacts to
resom’ces and make rec0mmenda,dons to the City Council. These impacts and
recommendations will be a part of the staff report ~o City Council at the time of the
Downtown BID punic heaffmg. BID law provides that costs for the establishment of
BID may be recouped. Staff has not made a recommendation regarding the
reimbursement of costs that the City has incmwed. This will be &’scussed in more detai!
at -’&e time of the Public Hearing.
The establishment of a Downtown BID is " ~co._~temn~ .~ , with Comprehensive Plan Policies
and was a part of the recorn__mendations for Downtown Palo Alto identified in the Retail
Sn-ate~o-y ~%r the City ofPalo Jdto prepared by Sedway and Associates in June 2000.
The estabEshment of a BID supports the following Comprel~ensive Plan Policies:
PoIicv. B-4 Nmlm-e ~d support estabti&~d~ = bus~esses as wel! as new bus~esses
Prog’am ~-1 Mfiate assessment ~sn-icts or o~er prog~s to facilitate neighborhood
shopp~g center ~provements such as landscaping, pm’~qg ~d access to p~lic
tr~po~afion.
Policy ~-11 Enco~age ~e ~e of public/private pmmersNps as a me~ of redevelopNg
~d revitalizNg s~.l~d are~.
use ~a cont~Nng retail, persona! sen, ice, o~Nce, testator, ~d ente~a~e/ uses.
Reco~ze ~e ~portance of ~ appropriate fetal ~x. Nclu~g small local busNesses,
to the con~ued vitaHa, of Downtown.
CM2c456:05 ~ a=~ 6 of 7
TMs action by the Ci~
Environment Quaii~ Act,
Council is not considered a project under :the
¯~.cono]]il~C~.t~an ~-pan,Development Manager
CITY !~{%NAGER APPROV_~L:
Hanffson: ASsistant Ci~" Manager
CIvK~:436:03 Page 7 of 7
P~SOLUTi 01~ NO.
P~ESOLUTiON OF TP~E CO~CiL OF THE CITY OF P-~O -~TO
APPOINTING .2~q .~_DVi S ORY B 0.~_RD, DiP~ECTiNG THE
PREP.~_~ATION OF A P~EPORT FOR F!SC.~, YEA_R 2003-2004,
.~!~ID DIP~ECTING TH~_T NOTICE BE GI~-EN OF A PUBLIC
I~EETING ~_ND PUBLIC HE_~_RING IN CO!\q~-ECTiON WiTH THE
PROPOSED ESTg,BLISB_n!ENT OF THE DO%~q\TTOWIq BUSINESS
I!~PRO~v-E/~ENT DISTRICT 9!gD THE BROPOSED LEa-f_ OF 9_h~
ASSESS!~gT AGAINST BUSIITESSES WITHIN SUCH DISTRICT
I~{E~E~’S the City of Pa!o Alto (the "City") is a c[~te~
city organ-~zed and existing under the laws of the S~=~ of
California; and
],~q{EP~AS, it is in the public interest to promote the
economic viza!ity and physi-cai maintenance of business districts
within the City in order to prevent erosion of the business
districts ~nd to attract and retain businesses; and
~EPSAS, the Parking and Business Improvement Area Law ef
-Secumons 36500 et see.)~989 (California Streets and Highways Code ~’_
(the "Law") provides that the City may establish a Parking and
Business improvement ~ea for ~he. pu_~pose of prov~a=ng’": improvements
and promoting activities within a business district and m~y !e~ ~n
assessment against businesses within a Parking and .Business
improvement Area to fund im_mrovements and activities; and
~<{EP~AS ~ ~,eow.~,.uov,o, business merchants have m~n" == e.~_~p!oring
uh_ moss~b~!~~-,~o÷ ~ bus-~ness improvement district for dowm.to%~.
Pa!o Alto; and
~:~.~,the City has received a petition s~gned by the
owners or authorized representatives of over f~rty eomm~obm
businesses requesting that the ’~C~uy initiate proceedings for the
formation of a Parking and Business improvement Area for the
dowm_to~ area; and
the City wishes to initiate proceedings for the
formation of a Parking and Business improvement Area for the
dov,~_to~ area pursuant to the Law; and
030917 s.~ 0100126
WnmRE..S, the Law __~=~u4~es_ __ uhe City Counci! to appoint__ an
adviso_~y board w_hich shall make recon~mendations to the City Counci!
on the expenditure of revenues derived from the !e-~y of
assessments, on the classification of businesses, as applicable,
and on the method and basis of ~~evying the assessments; and
kq£EREAS, on Hatch 17, 2003, the City Counci! appointed a
Do~,~to%m_ BID Ad Hoc Committee to review options and make
recommendations to the City Council in cop~nection with a proposed
Business Improvement Area for the dowm~to~ area;
NOW, THEP~F0~, the Council of the City o9 Pa!o Alto does
P~SOmV~ as follows:
SECTION !. The Co-<ncil hereby appoints the Do%m~to~m_ BID Ad
Hoc Committee to serve as the advisory_ board for the proposed
Do~tov, m Business i~rovement District (the "District") pursuant to
Section 36530 of the Law (the "Adviso=~ Board").
SECTION 2. The Council hereby directs the Adviso_~_~~ Board
to prepare and file with the City Clerk, in accordance with Section
36533 of the .Law a report for fisca! year 2003-2004 in com~ection
with the proposed estabiisb~ment of the District.
SECTION 3. The Cou_ncil hereby sets October 27, 2003 as the
date for a p’mb!ic meeting on the estab!isb_ment of the Distric~ and
the !evLv of assessments and November 17, 200~ as the date for a
public hearing on the est-~_b!isb:ment of the District ~nd the lev~ of
assessments. Both the public meeting and the public hearing will
be-held at 7:00 p.m., or as soon thereafter as practicable, in the
City Counci! Chambers at 250 H~milton Avenue,Pa!o Alto,
California.
SECTION 4. The City Clerk is directed to notice of
the public meeting and the public hearing as re~aired by law.
/!
/!
//
/!
/!
!/
/!
/!
030917 syn 0100126
SECTION 5. The Council finds that this is not a project
under the California Environmenta! Quality Act and, therefore, no
enviror_menta! im_mact assessment is necessary.
INTRODUCED ~_k~ PASSED:
AYES:
NOES:
9~SENT:
~ST~T!ONS:
ATTEST:APPROVED
City Clerk
APPROVED AS TO FOP!{:
Senior Asst. City Attorney
Hayor
City Hanager
Director of Administrative
Services
030917 syn O] OO126
Attachment 3B
TO:
FROM:
DATE:
SUBJECT:
City of Palo Alto
City Manager’s ort
HONORABLE CITY COUNCIL ~
CITY MANAGER
October 7, 2003
RECOMMENDATION
DEPARTMENT: Cit3’ Manager
C1VIR: 457:03
TO ADOPT A RESOLUTION AMENDING
RESOLUTION NO. 8339, TO APPOINT TttREE ADDITIONAL
PROFESSIONAL BUSINESS MEMBERS TO TI!E BUSINESS
IMPROVEMENT (BID) ADVISORY BOARD A_Nq) TO CHANGE
THE DATE OF THE PUBIC HEARING ON THE
ESTABLISHMENT OF THE DOWNTO~rN BID FROM
NOVEMBER 17, 2003 TO NOVEMBER 24, 2003.
RECOMS~NDATION
Staff recommends that the City Council adopt a resolution amending City Council
Resolution No. 8339 to:
1.Set the size of the Downtown Business Improvement District (BID) Advisor3,
Board at a maximum of 15 members
o Appoint the following individuals to the BID Advisory Board:
[] Victoria S. Lukanovich Professional Business
Website design, computer assistance
[]Jim Maliksi Professional Business
Architect
[]Beth Rosenthal Professional Business
Psycholog-ist
Set November 24, 2003 at 7:00 p.m. (or as soonthereafter as is practicable) in the
City Council Chambers as the place and time for a public hearing to hear
comments, protests and testimony on the establishment of a downtown BID.
,BACKGROUND
At the September 22, 2003 City Counci! meeting, the City Council approved the
following actions:
CMR.:457:03 Page 1 of 5
o
Appointed the Ad Hoc Advisory Committee Members as the Advisory Board that
will prepare the required Report and Recommendations to City Council on a
Downtown BID (with the addition that the BID Ad Hoc Advisory Board return
with recommendations for Council decision on additional professional
representation on the Committee and the size of the committee
Directed the Downtown BID Advisory Board to prepare the report to City
Council required by BID law and provide recommendations that will include:
o Expenditure of revenues derived from the levy of assessments
o Classification of businesses
o Method and basis of levying assessments
Set October 27, 2003 at 7:00 p.m. (or as soon thereafter as is practicable) in the
Council Chambers as the time and place for a public meeting on the proposed
BID. The Council may also consider approval of the Report of the Advisory
Board on the BID and Resolution of Intention to Establish a Downtown BID on
that date.
o Set November 17, 2003 at 7:00 p.m. (or as soon thereafter as is practicable) in the
City Council Chambers as the place and time for a public hearing to hear
comments, protests and testimony on the establishment of a downtown BID
Cit3, Council added to the first action that the Advisory Board includes the appointment
of additional BID Advisory Board Members to include a greater representation from the
professional business category. City Council also requested that the BID Advisory Board
make a recommendation regarding the size and composition of the Advisory Board.
DISCUSSION
On March 17, 2003, City Council appointed an Ad Hoc Advisory Committee for the BID
to explore the feasibility of creating a BID and to make recommendations to the City
Council. The BID law requires a formal Advisory Board to be established that will
subrrdt annual reports and recommendations to City Council with respect to the BID
assessment and expenditures. On September 22, 2003, City Council appointed the Ad
Hoc committee as the formal Advisory Board for the BID and requested that the
Advisor?, Board add more professional businesses to its membership. City Council also
requested that the Committee recommend the size of the Committee.
CM2c457:03 Page 2 of 5
The members of the Ad Hoc Advisory committee were:
Stephanie Wansek
Comelia Pendleton
Georgie Gleim
Warren Thoits
Israel Zehavi
Steve Warden
John A3~ald
Alex Resnick
Faith Bell
Sandra LomNuist
Sunny Dykwel
Barbara Gross
Cardinal Hotel
University Art
Gleim Jewelers
Thoits Brothers
Diamonds of Palo Alto
Union Bank
Caf~ Neibaum Coppola
Spago’s
Bell’s Books
Palo Alto Chamber of Commerce
Alan Pinel Realtors
Garden Court Hotel
Members of the BID professional community were invited to attend a publicly noticed
BID Advisory Group meeting on Wednesday, .October 1, 2003. At that meeting,
potential additional Board members were identified and interviewed. The Board also
determined that the number of members of the Board should be limited to 15 members in
order to maximize the ability for a quorum to be present at future BID meetings (a 15
member board would need 8 members to establish a quorum). Accordingly, the BID
Advisory Board recommends the addition of three additional members for consideration
for appointment to the Advisory Board.
These recommendations include a represefitative of t_he professional business community
who is an architect, a representative of the professional business community who is a
consultant (web design and computer assistance) and a member of the professional
business community who is a psycholoNst.
The BID Advisory recommends the appointment of the following individuals to the
formal Advisory Board:
Beth .RosenthaI, PhD, a licensed psycholoNst operating her business at 550
Hamilton Avenue, Palo Alto
~ Jim Maliksi, J. Maliksi and Associates, a local architect with an office at 654
Gilman Street, Palo Alto
.n Victoria S. Lukanovich, F1 IT Consulting, a web design and computer consultant,
at 425 Alma Street, Palo Alto
CMR:457:03 Page 3 of 5
With the addition of the three recommended Advisory Board Members, the representative
composition of the board is as follows:
Hotels: 2
Retailers: 4
Restaurants: 2
Bank:1
Professional:5 (includes an attorney/insurance office, realtor, psycholoNst, architect and
computer consultant)
Total:15
The cost benefit analysis for the assessment of fees, the proposed assessment formula and
map of the BID will be submitted for consideration by the City Council in the report to
City Council by the full Board on October 27, 2003. At that time, City Council will hold
a public meeting and may choose to adopt a Resolution of Intention to Establish a
Business Improvement District.
Staff requests that the Public Hearing on the Downtown BID be changed from November
17, 2003 to November 24, 2003 to accommodate the inclusion and integration of the new
board members into the planning process and crafting of the report to the City Council.
RESOURCE IMPACT
Refer to Resource Impact section of September 22, 2003. (Attachment 1)
POLICY IMPLICATIONS
The establishment of a Downtown BID is consistent with Comprehensive Plan Policies
and was a part of the recommendations for Downtown Palo Alto identified in the Retail
Strategy for the City of Palo Alto prepared by Sedway and Associates in June 2000.
The establishment of a BID supports the following Comprehensive Plan Policies:
‘polic.v B-4 Nurture and support established businesses as well as new businesses
.Program B-1 Initiate assessment dis~cts or other programs to facilitate neighborhood
shopping center improvements such as landscaping, parMng and access to public
transportation.
.Policy B-1J Encourage the use of public/private partnerships as a means of redeveloping
and revitalizing selected areas.
.Policy B-20 Support and enhance the University Avenue!Downtown area as a vital mixed
use area containing retail, personal service, office, restaurant, and entertaip_rnent uses.
CMR:457:03 Page 4 of 5
Recognize the importance of an appropriate retail mix, including small local businesses,
to the continued vitality of Downtown.
ENWIRONMENTAL REVIEW
This action by the City Council is not considered
Environment Quality Act.
Attachment 1: CMR: 436:03 from September 22, 2003
Attachment 2: Resolution
PREPARED BY:
a project under the California
CITY MANAGER APPROVAL:
City :ger
ClvIR:457:03 Page 5 of 5
ATTACHMENT.!
TO:
City of Palo Alto
City Manager’s Report
HONOP~._B~LE CITY COD.~C!L
FRO~:
DATE:
FvE.C O M~fE_N~DATION
recommends tha~ the CiD,~ Councih
1. Adopt the resolution, which appoints the Ad Hoc A&dsow Committee Members
as the AdvisoW Board that w~ prepare the requked Ikepo~ aud
Recommendatio~ to Cib~ Council on a Downtown BID.
Direct the Downto~-n BID Advisory Board to prepm-e the report tc Ci7 Cou~ci!
required by BID law and provide recornmendatio~ that ~41! include:
Expenditure of revenues derived from ~e levy of assessments
C.assmcanon o~ busmesses
Method ~d basis of lev-ying assessments
2.Set October 27~ 2003 at 7:00 p.m. (or as soon thereafter as is practicable) in the
Council C:mmb,,rs as the and place for a public ~’~*4-Z on the proposed
B.PD. The Council may also consider approval of the Report of the AdvisoW
Board on me BID and R.esolution o~ Intennon to ,_,staohsh a Downtown BID on
that date.
......~ Set November ] 7 2003 at "7:00 p.m. (or as soon th
Ch,.~:436:03 Page i of 7
Ci~’~ Co’~ncfl Chambers as the p~ac"~ ~ a.~d ~e for a public _~_=.~oo~,~ to hear
commen~ protests and tes*Smony on the. estabHs "lznent of a do~{~nto~m
BACKGROr_57D
Dov, mtoum Merchmnts have been exploffm~ the possibiiib~ of a BID £or Dou-ntown Pato
.Qto. The B~ w~ ~sess busAesses pro~4de a va5eb, of se.~dces to e~ce ~e
econo~c viab~i~v of Do~to~ PAo ~Jto. ~e " ~"~o~anon of a B~ ~d 5e le~3~ of
assessments ay~t busAesses A ~e B~ to ~ce ~provemen~ ~dac’~a~,-":me~ -
oene~m_ 5e bus~esses are au~&off~ed by state taw (Ca~omaa SFeets ~d Highway
Code Section B~500 ~d foliouim~). The pu~ose of a B~ is to promote ~d ~prove a
S~ Adviso~ Boad m~es reco~endatio~ to ~e Ci~ Co~cil on ~e expen~e of
revenues derived ~om ~e le~ of ~sessments on fl~e classification ofb~ess~s ~d ~e
me’5od ~d basis of l~D, Sg ~e assessments ~d prepares a repoK, 5c!u~g a budget,
~%r each ve~. ~at assessmen~ w~ be’~ev~ea ’
BIDs have been established in over 200 b,~iness areas in California inc!u ’~aing Mountain
View: San T ,~. os~. and Bm-tin=~ame.
Acnvides that can be funaed "~-i-~ BID proceeds include:
Enhanced Downtom,m m~ntenance
Promodona! =,=.÷~h~.~ .~o to ~aw customers to ~e Do~mtown
Provision ofb~ers, direction~ m~-kers, etc.
Pa~ for a sm~ person to coorS~a~ Downtown activities
Coor~ation ofbus~ess, Cib~ ~d co~~ ~terests
Provision o~ business ~o~a~on, make~ materials and maps to ~gMigm
Downtown bus~esses
DISCUSSION
CI~GK:436:03 oar, e 2 of?
owners and operators cannot su ..... ~fully :nn ..... o~.., and provide mar_<emng and
other ..... o~’-,’~’"~.~., n~..Q..d~ " to strengthen ,the Downtown. "rot Jzis reason, the Downtown
Mark-~ Committee " ~’OI the, C,~,mber (CommJ~ee), ~--~,-~o-~-~ bo~i memoers and non-
members oft.he Chamber, identified the need for a Downtowm BID.
On-...~,.~..m~"~’~r ~.,~ 2002,. the representatives of the Committee i~,Fill&iiy presented a pedfion
signed by over 50 downtom,n businesses dtu-in~ City Council oral communications. The
petition reqyested that the City Council aZendize the. discussion of the Do~,ntown BFD
and consider passin~ a Resolution of Intention to ]Establish a Dommtown BID at a
sub sequent meetinz.
On M~.,n 17, _00~, City Council <~pointed an Ad Hoc A~v~so~ Co.mmi~ee for the
BID. ~" ’ .....~omm~m.~ to.-~: me. time of the appointmcn% the gTOKn was ~dennnca as an ad hoc ~" "~
explore the ~%asibi!Jty of creaing a BID and to make recommendz-~.tions to the City
CoLmcil. The BID law requires a fonna! Adviso~ Board to be established that v,~
submit annual repots and recommendations to Ciu’ Council with respect to the BID
as~e~,~,~ and e:~p,..ndimres. The BID !aw authorizes appoin~eni o~ the Advisow
Board prior to e~abhs~men:"* ’" of the BID. As the Ad Hoc Committee has been mooing_
remalariy since March and has provided the leadership for tins mmanve, sta~
r,.~.orfm~..~as that fi:ds committee be ~.ormahzed and nazned as the Advisory Board to
prepm"e m,. annual reports aria reco~menaat~ons to City Council on a Dmt-ntov, m BID.
!n 7uly and August of 2003, an intern was hi~ed by the City to develop a database of
busm,_~.~,.~ located in "&e BiD ~ea. 7he totem walked dne district ~vera! imes and
identified every address and business in the district. Her findings supported prior work
O_rt t_he "Tm,’ ~_~ database of ousmesses and resuhed in ~e identification of 913 b ’usinesses.
To be =’-~"’"’"c~. ~am that ai! businesses in the BD were fnSormed and coula become involved in
fl~e pl~ming of the BID, iue Coma~ittee sent letters to each business o,amer i_n the.
proposed area, menn_~,mg the proposed BID boundm-ieso benefits of the BiD. activities
that could be accomplished and an estate of revenues that could be ami:ipated fi-om "~e
collection of a downto~a-a BID assessment. Mul,fiple discussions at monthly Dowmov,~a
¯~,.,.,a_%~ and several additional rnee-~un~s were hdd to mscuss th= BID for
Downtown ~ a_~o Af!tn with arred~d rr.,’r~’h=ntS ]\f~*~’~S "~,~.e .
d~tes ~d [~es:
Augq.tst 2 !Sam
August 28.. 2002 6pro
September i8:2002 Sam
Cardinal Hotel
Blue Chalk Care
Cardinal Hotel
Page 3 of 7
September 18; 20..212 6pro
November 20, 2002
July 30,. 2003 9am
Blue Chalk care
Chamber MHxer @ ZJbibbo Restm~ant
Cardinal Hote!
For ~&e meeting that was he]d on July 30, 2003; a flyer was tal:en to eveo~ business
wkhin the proposed BID boundaries to ~o~-m each business of~e date, time and
location of the business o’a~reach ~,~’~,~, ~d invite them to~_= any C01qCeF"~_q or
comments for fm,~&er consideration.
An addifionaI business outreach rneein~ is scheduled for October 8, 2003 at 9:00 am at
m~. Cardinal Hotel to once ag~Mn he~ ~y comments and answer any questio~
concerning the proposed B~.
A noticed public, ~ " ~’ " -~ ’’"m..enn= set and aV.enQe~ oy the Cib, Co~c~ is m.lso req~-ed accoroang
to BID law. The attached resolwdon sets the public meeting to hear comments on the
proposed establishment of a BID on October 27, 2003. Fo!!o~dng the public meeting.
CiW Council m~y approve the report of the ^ ~ "" ......~c.-~:~sory Board ~c~ may consider actopnng a
Resoludon of Intention to Establish a Business Improvement Dis~ct.
The Resolution of hn~en~on ~o Establish a recta’too,an BID m~t include *&e fo!lo,zdng:
¯Description oz me boundm-ies of the area and ~dennncanon of an?, .....s~p~e benefit
zones.
¯Name of the proposed area.
-Type or ~pes of im_orovemen~s anc~ acnvmes to ~e ~.~
assessmen,ts.
¯Statement that, except where funds are othenvise available, an assessment
levied annually to pay z%r all improvements and ac~vities in the m-ea.
¯Iden~ificafon of the proposed method and basis of le~@ng the assessmen% in
sufficient detail to a~Jow each business owner to estimate the amount of th~
assessment to be tevied a~ainst his/her business.
DetermLnatJon of whether new businesses will be exempt from the
assessment for a pe~od not to exceed one year ~om the date the business
com.mencea o~rann~, pursuant to ~u,.~.s ana ~_~nwavs Code Section
tf the Ciu, Counci! chooses to aaop~ "-&e Resolution of Intention, *d~e zollo~&ng actions
must be v, dcen:
Ch’fP,.:435:03 ~°~; 4 of 7
A public heating (noticed accordin~ to BID law) must be held not less th~ 20 or
more th~ 30 days after the adoption of the resolution of intention,ti,-,.~’~’~ auached
resolution would set this heating for ~ovemoer 17, -. 00~).
At the hem’ing, the City- Council must consider the tesimony of all interested
persons for and aginst the establishment of the BID, the extent of the area within
the BiD, and on the fm’nishing of specified Lypes of improvements or activities by
the BID.
_~my un~e.res~..d person may make protests orally or in wric~.~g. Wri~en protests
must be ~ed ~dth the Cib~ Clerk at or before the ~e ixed ~%r the public
!f ~Mtten protests to the establishment of a BiD are received f~om the. o~ers of
ousmes.es in the proposed area. wm~h will pay 50% or more of the total BID
assessment, no further proceedings to create the business improvement area or to
le~5, the proposed assessment s~ha!! be. considered for at least a year..
At i~. conclusion of the public hea_~.n~, to establish the BID, the CiD’ Council may
adopt, re~4se, change, reduce or modif-y the proposed assessment or the
~provements and activities proposed.
if the Cib~ Co,~ci!, following "h~"u_,. public heann_% decides to establish the BID, it
will adoat an ordinance to that =e:lect. The or idin?mce will cont~in in~%~-ma’don
required b7 B~ law including the manner of co!lection and levy of assessments.
in subsequent years the Ad~dsoD~ Board will file an annual report m~idng
reco~endatio~ on the following: -
o Expenditm-e of revenues derived ~om the le’v.-y of assessments
o Classification of businesses
o Method and basis of lev~m~ assessments
~e a~ached resolution sets the place and time for the public hearing_ on the proposed
BID to hea_~- commenls, protests and testimony on the establishment of the business
~_proYement area and the le~ of assessments in the BID. At that time, the effect of
protests made by business o~mers against the establishment of a BID, the extent of the
area and activities proposed shall be described.
The Economic Devdopment Division in ",he City. Manager’s O~ce h~sprovided staff
support to the Ad~dso~ Committee. Econo~c D~vdopment staff have overseen the
creation of a b~ess database ~d cross referenced it with R~ference USA, ~
database, to ~ns~ ~at aH downto~m bus~esses wi~ th~ B~ bom~d~s are
1Q~n~t~. In aa~on, start have assisted ~ ~e pr~p~-affon of ~e budget men~mg
proposed B!D achvi~s, prspar~d a comprehe~ive ref~renc~ boo~t for ~snibufion to
Clv,~t,.:’-136:03 Pa_~e 5 of 7
0-~inesses and won:eG wi~ a consultant to ’’~ ,’~] the ~, "~’ ’o~ ~..,op cost b,.m.fit mnatysis and
assessment formula ~r BID .assessments. Sm_..i~ wilt also prepm"e and m~ in~viduN
notices to each business located in the BiD prior ~o the public meeting.
There are s~ a hum!oct of issues to be resolved be.z%re a Do~mtown BID could become
operational. For ex~ple, s~ce ~e Ci~ collects ~e assessmen%
A~s~a~ive Sen4ces Depm~ent m~t be co~idered. The Ci~ ofP~o ,~o ~ -"~O~ ~0!
have a b~ess Hce~e ~. so ~ere was not ~ ~mstm= aamoase avaflY~ie ~or
co!lec~on of BD assessmenm. Now "~ ~e Ci~ has czeated a database of
b~esses, a me~odoloD, for ~e cotlec~on of ~e BD ~sessments must be devdop~d.
CiD, stuff 9ore affected dep~ems wi~ reconcile iese issues, ~au~e ~pac~ ~o CiD’
reso~ces ~d m~e reco~endafio~ ~o~e Ci~ Co~ci!.
rec.o~en~o~ wi!! be a p~ of ~e st~ff report to Ci~
Do~mto~m B~ public he~:mZ. BiD law provides ~at cos*s for
B~ may be r~couped. Staff has not made a reco~endadon
re~mb~sement of costs ~at ~e Ciu, has ~c~m~d. ~s wi~ be ~scussed ~ more d~ta~
at ~e ~e of’&e Pubic H~mg.
P OLICY UvLPLICAT!ONS
The establistunent of a Dowmto~m BID is consistent with Comprehensive Plan Policies
~,~.nd was a pm~ or me reco~men~no~ 1or ~o~,qx~o~m Palo ~to " ~ ’ ~ne ..... ~
S aat~" for flue Cib~ of PMo .Qto prepuce by Sedway ~d Associates m Jmue 2000.
The estabEsDoaent of a BD suppo~s ~e fo!Io~ing Comprehensive Plan Policies:
Policy B-4 Nur’cm-e and suppo~ estdolished bus~esses as well ~ new bus~esses
Prog’am S-7 ~ate~s~o~m~.m~ ~ ~ " disNcts or o*~er gro~ ~o facNtate neighborhood
shopp~g center ~provements such as l~dsc~o~g, p~g ~d access to pub!ic
~pona~on.
Policv Y-ll ~,~ ~e ~e of public/private ~ , ~" ~~’ "._ .....=~pm~,~m~s as a me~ ox redeve~opmg
Poh:m~. S-20 Suppo~ ~d ein~ce ~e ~;-:-~r~’~,~, ~--lO Avenue/Do~mtown ~ea as a ~4t~ ~xed
use m-ca coning rem~, personi se~ce, o~ce, resmwant, ~d entena~ent uses.
Re~o~e the hRoo~ce of ~ appropriate ret~t ~. Nclu~g small local b’as~esses,
to "&e cont~ued virtu, of Do~mtown.
C2vC>.:436:03 Page 6 of 7
action by the Ci~ Council is not considered a sro_.’.,ect under the CMiz%~,-nia
EnvL"onment QuMi’c! Act.
BY:
S,~an Arpan~ Ec6nom.~ D~veiopment Manager
v£~=.~S the City of Pa!o ~Tto (t<~= City ) a charter
c~’~-’ ’ o~--._=::_,~=~: ---~ a:nd existing under the ...._~=w= of the State of
Ca!iforc_..ia ; and
~EP~AS, iz is in the public interest to promote the
economic vita!~"_~_~y and physica! maintenance of business dis~-{cts
within the City in order to prevent erosion of the business
districts ~nd to attract and retain businesses; ~nd
~n~-~.S, th= Parking and Business ~mo~ov=m_n~Law of
!989 (Ca!ifo~ia Streets a~.nd Highways Code Sections 35500 et seq.)
(the =. ) provides ~"-~ the City may establish a sa~k~n~ and
Bu .... =s im~rov~ent 9~ea for the mu~ose of mrovzdinm i~rov~nts
~nd promoting activities within a business .4 ~ ~d~s~_,cu rand ~y
_s__=m .... against businesses within a :=~k=ng and Business
=~,ov_m_n~ Area to fund improvements ~nd activities; and
[,~r.-.’EP~EAS, do~=%to’,~_ business merchants have been e>~=-p!oring
Pa!o Alto; and
~z~=.S, the City has received a pez~z~on si_~s.ed by the
owners or =uunor=z_e representatives of over fifty
businesses re~aesting that the City proceedings for the
fo~nT~ation of a Parking and Business ~ ....= = ~~mp, ov~m_n~ Area for the
ao~to~ area; and
}T<’~q the City wishes to -:.~4t4at= Droceedinms for t<~e
fo~-mation of a Parking and Business 7_mp~ov=m~=~ Area for ~~= ....
do%_~--_.:ok,~-~, area pursuant to the Law; and
030917 syn 0]00126
%,THEP~AS, the Law requires the City Counci! to appoint an
ad-v-iso!-_,~ board which shal! make reco..~m=_ndazions to the City Cou~nci!
on the e:~endi .~ure of revenues derived from the ! e’,,-y of
assessments, on the classification of businesses, as applicable,
and on the method and basis of ie-~%,in~ the assessments; a~nd
~Z£EP~AS, on !~arch !7, 2003, the City Council appointed a
Dom_~_to~n~ BID Ad Hoc Corm~ittee to review options and ~ke
recommendations to the City Counci! in cor~nection with a proposed
Business improvement Area for the do-~...~.to~.~ area;
NOW, ~ .........the Co~nci! of ÷~= ~-~~.w-~u~, ....._:=~o does
follows:as
SECTION !. The Co’~ncii hereby appoints the DDwnto%m. BID Ad
Hoc Committee to se~e as the advisory board for the proposed
Do~0,T~to~,m~ Business i~rov~ment District (the ’~District") pursuant to
Section 36530 of the Law (the ’~Advisory Board").
SECTION 2. The Co~nci! hereby directs the Adviso=-y Board
to prepare and file with the City Clerk] in accordance with Section
36533 of the Law a report for fisca! year 2003-2004 in connection
with the proposed estahiisb_ment of the District.
SECTION 3. The Co~nci! hereby sets October 27, 2003 as the
date for a public meeting on the est~biisb_ment of the District
the !e%~ of assessments and November 17, 2003 as the date for a
p~!ic hearing on the estab!isb:ment of the District ~nd the ie~° cf
assessments. Both the p~ab!ic meeting and the public hearing wil!
be held an 7:00 p.m., or as soon thereafter as practicable, in the
City Counci! Chambers at 250 Hamilton Avenue,Paio Alto,
California.
SECTION 4. The City Clerk is directed to notice of
public ,~==~"~ and the public ~=a~ as re~aired by law.
/!
/!
/!
! !
//
//
/!
SECTION 5. The Council finds that this is not a project
~zmder the California =,,nviro~mentalQuality Act ~nd, therefore, no
envirop_menta! assessment is necessary.
INTRODUCED ~u~ PASSED:
AYES:
NOES:
~SENT:
~STENT!ONS:
ATT’EST:APPR0i~D:
City Clerk
APPRO\~D AS TO FO~:
Senior Asst. City Attorr._ey
!,[ayor
City Manager
Director of A~ministrative
Se~:ices
030917 s.vn
ATTACHMENT 2
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
~TO AMENDING RESOLUTION NO. 8339, APPOINTING AN
ADVISORY BOARD, DIRECTING THE PREPARATION OF
A REPORT FOR FISC~YEAR 2003-2004,AND
DIRECTING T.H~.T NOTICE BE . GIVEN OF A PUBLIC
MEETING .AND PUBLIC HEARING IN CONNECTION WITH
THE PROPOSED ESTABLISHMENT OF THE DOWNTOWN
BUSINESS IMPROVEMENT DISTRICT AND THE PROPOSED
LEVY OF AN ASSESSMENT AGAINST BUSINESSES WITHIN
SUCH DISTRICT
WHEREAS, the City of ~a7o Alto (the "C~tv") is a ~h-~*=~
city organized and existing under the laws of the State of
Cal~ = ~ .~ ~_o~:_a, and
WHEREAS, it is in the public interest to promote the
economic vitality and physica! maintenance of business districts
within the City in order to prevent erosion of the business
districts and to attract and retain businesses; and
WnsRm:~S,~ the Parking and Business improvement A<ea._ Law
of 1989 (California Streets and ~_ghw=ys Code Sections 36500 et
seq.) (the "Law") provides that the City may establish a Parking
and Business ~ .~ -~.._~mn.ovemen~~rea_o_~ ~ the DurDose~ _of providing.
improvements and promoting activities - ~h~’.w~,_.n a business distr~ct
and may levy an assessment against businesses within a Parking
=~ Business improvement Area to fund ~ ~ -=~ -..... mD~ ovem~.t~ and
WHEREAS, downtown business merchants have been =xm7oring~ _-
the mossibi!ity of a business improvement district for downtown
~!0 ~~_=.~O; and
--’~’m:m’~n .....aS, the City ....has rece~v~e a ne~!r~_on s:mne@ bv zhe
owners or authorized renresentatives of over fifty downtown
businesses__~=mu=sting~ _ that the City _~nit-~=~=__~ .proceedings for the
formation of a Parking and Business improvement Area for the
downtown area; and
WHEREAS, the wishes to initiate D_o~d_n~_ ~or
formation of a Parking and BusCh=:=_~.~__ improvement Area for the
downtown area pursuant Zo the Law; and
WHEREAS, the Lawr~qu= ,~=~ ....the C=t~- Council to ammoint_, an
advisor3. board which shall make recommendations to the City
¢~unc= on the exDenditure of revenues derived from th~ ~=vv of
assessments, on the classification of businesses, as applicable,
and on the method and basis of levying the assessments; and
WHEREAS, on March 17, 2003, the City Council appointed a
Downtown BID Ad Hoc Committee to review options and make
recon~mendations to the City Counci! in connection with a
proposed Business improvement Area for the downtown area; and
WHEREAS, on Septembe± 22, 2003, the City Council adopted
Resolution No. 8339, appointing the Downtown BID AD Hoc
Committee to serve as the advisory board for the proposed
Downtown Business Improvement District the "District"),
directing the advisory board to prepare andfile a report for
fiscal year 2003-04, and setting a public meeting and public
hearing on the estab!is[~ment of the District and the levy of
assessments; and
WHEREAS, the City Council requested that the advisory
board make a .~om~nd=~ion to the City Council_~ .....g the
addition of members to ~he advisory board to include greater
representation from the m~o{=ssiona! ~ ~ou_~ne.~ category; and
WHEREAS, the advisory board met on October !, 2003 and
took action zo recommend that the City Council appoint Victoria
S. Lukanovich, Jim Ma!iksi and Beth Rosentha! as members of the
advisory board; and
WHEREAS, staff recon~mends, in order to allow sufficient
time for new members of the advisory board to provide input
regarding the proposed Dist~-:c.~, that the public hearing on the
NOW, THEREFORE, :he Council of the City of Pa!o Alto
’P ....fo!!does R~OmVm as ows:
SECTION !. Section ! of Resolution No. 8339 is hereby
amended to read as follows:
"SECTION !. The Council hereby appoints the me~er: of
the Downtown BiD Ad
attacb~ent ~ to this Re
.~. Lukanovich, Jim Ha!iksi and Beth Rosenthai to se~
as the advisorv~ board for the _mromosed. Downtown.. B~.=n~ss’~ -
_mm=~-m-..r District (the "D~strict") mursuant to
Section 36530 of the Law (the "Advisor}, Board"). The
Down:own mTD !@v:s~.ry so=ru snail be !~m{t=d to a
= ~ -" ~ ~ ~=~een members "m~irtse.s~.F c .
0~1001 sm 010013:~2
SECTION 2. Section 3 of Resolution No. 8339 is hereby
amended to read as follows:
"SECTION 3. The Council hereby sets October 27, 2003 as
the date for a public meeting on the establishment of
the District ~nd the levy of assessments and November
24, P~’03 a~ =he date for a public hearing on the
estabi:shmen~ of the District and the levy of
assessments. Both the public meeting and the mub!ic
hearing will be held at 7:00 p.m., or as soon thereafter
as practicable, in the City Counci! Chambers at 250
Hamilton Avenue, Pa!o Alto, California."
SECTION 3. The Council {inds that this is not a project
under the California ~ ’~....... mnv~ronme~a] Quality Act and, therefore,
no environmental impacZ assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
City Attorney City Manager
D±recnor of A6minis:rative
Services
031001 sm 0100i55 ~
Downtown Business Im~row-~ment District (BID) Advisory Board Members:
Stephanie Wansek
Cornelia Pendleton
Georgie Gleim
Warren Thoits
Israel Zehavi
Steve Warden
John Aywald
Alex Resnick
Faith Bell
Sandra Lormquist
Sunny Dykwel
Barbara Gross
Cardinal Hotel
University Art
Gleim Jewelers
Thoits Brothers
Diamonds of Palo Alto
Union Bank
Car6 Niebaum Coppola
Spago’s
Bell’s Books
Palo Alto Chamber of Commerce
Alain Pinel Realtors
Garden Court Hotel
ATTACHMENT 3 .......
City of Palo Alto
City Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER
[13
DEPARTMENT: City Manager
DECEMBER 15, 2003 CMR: 551:03
RECOMMENDATION TO CITY COUNCIL TO ACCEPTTHE
REVISED REPORT AND RECOMMENDATIONS OFTHE
DOWNTOWN BUSINESS IMPROVEMENT DISTRICT(BID)
ADVISORY BOARD, HOLD A PUBLIC MEETING ONTHE
PROPOSED BID AND ADOPT THE ATTACHED RESOLUTION
OF INTENTION THAT APPROVES THE ADVISORY BOARD’S
REVISED REPORT, DECLARES THE CITY COUNCIL’S INTENT
TO FORM A DOWNTOWN BID AND LEVIES THE ASSESSMENT
ON BUSINESSES LOCATED IN THE BID AND SETS THE PUBLIC
HEARING FOR JANUARY 12, 2004 AT WHICH INTERESTED
PERSONS CAN TESTIFY
RECO~MENq) ATION
Staff recommends that the City Council:
1. Hold a public meeting on the proposed BID at which interested persons can
testify.
2. Adopt a resolution that confirms the Revised Report of the Downtown Business
Improvement District (BID) Advisory Board, declares the City Council’s intent to
form a Downtown Business Improvement District (BID) and levies the
assessment of businesses located in the BID, and sets a public hearing on January
12, 2004 at which interested persons can testify.
BACKGROUND
The Downtown BID Advisor5, Board (the Board), appointed on October 7, 2003,
submitted its Report to City Council on October 27, 2003, which included
recommendations on the BID boundaries; method and process of assessing businesses in
the BID; description of BID activities; and the proposed BID budget.
CMR:551:03 Page 1 of 5
After hearing the testimony of the Board members and businesses in the proposed BID
district, and a discussion of the assessment methodology, City Council conceptually
approved the BID and directed the Board to review the proposed assessments of
businesses in the BID. Of particular interest was the creation of a category for "single
person businesses" in the professional category operating in the district. Council also
suggested that the Board consider a method of increasing the assessment for the largest
businesses.
DISCUSSION
The Board took these recommendations into consideration and its recommended changes
were provided to City Council on November 17, 2003 as part of the staff report setting
the public meeting (December 15, 2003) and public hearing (January 12, 2004) for the
BID. The revised Report and Recommendations to City Council was approved by the
Board unanimously on December 3, 2003 and is attached to this staff report. The Report
reflects the current recommendations of the Board. The substantive changes to the
Report by the Board are as follows:
~ Revision of budget and activities based on changes to the annual BID
assessments in the professional business category
~ Establishment of an exemption for "single person professional businesses"
that have 25% or fewer full time equivalent persons (FTE), including the
business owner. This covers employees or owners who work less than 10
hours a week (based on a 40 hour work week)
~- Establishment of an assessment specifically for "single person businesses"
that have 26% FTE to ! FTE persons in the professional business category
of the BID (A full FTE equals, approximately 2000 hours annually)
~ Tiering of other professional businesses by size based (according to benefit)
on the new sm_le person business" criteria
>- Rounding corrections to annual BID assessments for continuity
The Board considered a similar breakdown for other business categories (such as retail,
restaurants, banks, hotels and service businesses), but felt that it was justified only for the
professional business classification because professional businesses will receive the
smallest benefit from the BID.
The Board also explored increasing the assessment for Downtown’s largest businesses.
Its recommendation is that no changes be made because the assessment as presently
tiered represents the nexus between the assessment and the benefit accruing to the
CMR:551:03 Page 2 of 5
business from the proposed BID activities. Following the first six months of operation
(January 1, 2004-June 30, 2004), the Advisory Board will review the database and
assessments and will recommend any changes to City Council at the time of the annual
reauthorization of the BID.
Following the public meeting tonight, City Council wilt consider a resolution approving
the Advisory Board and declaring its intention to establish a Business Improvement
District and levy assessments on businesses in the District.
Resolution of Intention
The proposed Resolution of Intention to Establish a Downtown BID includes, as required
by the BID. law, a description of the boundaries of the area and identification of any
separate benefit zones; name of .the proposed area; type or types of improvements and
activities to be funded by the levy of assessments; statement that, except where funds are
otherwise available, an assessment will be levied annually to pay for all improvements
and activities in the area; identification of the proposed method and basis of levying the
assessment, in sufficient detail to allow each business owner to estimate the amount of
the assessment to be levied against his/her business; and the determination of whether
new businesses will be exempt from the levy of the assessment for a period not to exceed
one year from the date the business commenced operating.
If the City Council chooses to adopt the Resolution of Intention, a public hearing (noticed
according to BID law) scheduled for January 12, 2004, will be held.
At the this hearing, the City Council must consider the testimony of all interested persons
for or against the establishment of the BID, the extent of the area within the BID, and on
the furnishing of specified types of improvements or activities by the BID. At that time,
any interested person may make protests orally or in writing. Written protests must be
filed with the City Clerk at or before the time fixed for the public hearing. If written
protests to the establishment of a BID are received from the owners of businesses in the
proposed area, which will pay 50% or more of the total BID assessment, no further
proceedings to create the business improvement area or to levy the proposed assessment
shall be considered for at least a year.
At the conclusion of the public hearing to establish the BID, the City Council may adopt,
revise, change, reduce or modify the proposed assessment or the improvements and
activities proposed. If the City Council, following the public hearing, decides to establish
the BID, it will adopt an ordinance to that effect. The ordinance will contain information
required by BID law including the manner of collection and le’,2~ of assessments.
CMR:551:03 Page 3 of 5
In subsequent years, an annual reauthorization of the BID and levy of assessments will be
required for its ongoing operation.
RESOURCE IMPACT
The Economic Development Division in the City Manager’s Office has provided staff
support to the Advisory Ad Hoc Committee and Advisory Board. Economic
Development staff has overseen the creation of abusiness database and other activities
associated with the formation of a Downtown BID.
The City Attorney’s office has provided legal oversight and direction regarding the
noticing and scheduling of required BID actions. In addition to internal legal oversight,
outside legal services have been utilized. Estimates for this work are $10,000, with
$5,000 being paid from the City Attorney’s budget for contractual services. The
additional $5,000 will be paid from the City Manager’s contingency fund.
Preliminary estimates of ongoing costs to the Administrative Services Department are
estimated to be $16,000 for the payment processing of BID assessments. Of this cost,
$5,000 will be paid from BID funds collected, and the balance of the funds ($11,000) will
be paid from the City Manager’s contingency fund in this initial year of operation. An
additional initial cost of $4,000 is estimated for data input and reporting. This mount
will also be funded through the City Manager’s contingency fund.
It is anticipated in future years that the payments will be sent out by the organization with
which the City contracts to provide BID activities administration and operations. The
ongoing cost for processing of BID payments is estimated to be $5,000 annually. These
costs will be paid with revenues generated from BID assessments. If additional expenses
for payment processing occurs, these costs will be will be reviewed by the City Council
at the time of the annual BID reauthorization and a determination will be made regarding
the funding of any additional costs.
POLICY 13IPLICATIONS
The establishment of a Downtown BID is consistent with Compreh.ensive Plan Policies
and was a part of the recommendations for Downtown Palo Alto identified in the Retail
Strategy for the City of Palo Alto prepared by Sedway and Associates in June 2000.
The establishment of a BID supports the following Comprehensive Plan Policies:
CM_R:551:03 Page 4 of 5
Policy B-4 Nurture and support established businesses as well as new businesses.
Program B-1 Initiate assessment districts or other programs to facilitate neighborhood
shopping center improvements such as landscaping, parking and access to public
transportation.
Policy B-1I Encourage the use of public/private partnerships as a means of redeveloping
and revitalizing selected areas.
Policy B-20 Support and enhance the University Avenue~owntown area as a vital mixed
use area containing retail, personal service, office,, restaurant, and entertainment uses.
Recognize the importance of an appropriate retail mix, including small local businesses,
to the continued vitality of Downtown.
ENVIRONMENTAL REVIEW
This action by the City Council is not considered a project under the California
Environment Quality Act.
ATTACHMENTS
Attachment 1
Report of the Advisory Board With Regard to the Proposed Downtown Palo Alto
Business Improvement District for Fiscal Year 2003-04
Attachment 2
Resolution of Intention to Establish a Downto~m Business Improvement District
PREPARED BY:
Sfisan Arpan, Econo}nic Development Manager
CITY MANAGER APPROVAL:Em~~’tv arr~son, Assistant City Manager
CMR:551:03 Page 5 of 5
Attachment I
Report of the Advisory Board
With Regard to the
Proposed Downtown Palo Alto
Business :Improvement District
For Fiscal Year 2003-2004
As approved by the Advisory
December 3, 2003
Board on
December 10, 2003
Introduction
The Advisory Board for the Downtown Palo Alto Business
Improvement District (BID) was directed by City Council on
September 22, 2003 to prepare a report and recommendations
pursuant to Section 36533 of the Parking and Business
Improvement Law of 1989 (Section 36500 and following of the
California Streets and Highways code) (the "Law"). This report is
for the proposed initial fiscal year for the BID commencing July 1,
2003 and ending June 30, 2004. ("Fiscal year 2003-04")
However, because the activities will be provided and an
assessment will be levied only during the period commencing
January 1, 2004 and ending June 30, 2004, estimates in this
report with regard to expenses and assessment proceeds relate
only to that period.
As required by the Law, this report contains the following
information:
BID boundaries and benefit zones within the BID;
The improvements and activities to be provided for Fiscal
Year 2003-04;
An estimate of the cost of providing the improvements
and the activities for that fiscal year;
The method and basis of levying the assessment in
sufficient detail to allow each business owner to estimate
the amount of the assessment to be levied against his or
her business for Fiscal Year 2003-04.
The amount of any surplus or deficit revenues to be
carried over from a previous fiscal year.
The amount of any contributions to be made from
sources other than assessments levied pursuant to the
law.
Submitted by Stephanie Wansek, Chair, on behalf of the Advisory
Board of the Downtown Palo Alto Business Improvement District
December 3, 2003.
The Board approved this Report December 3, 2003 at a publicly
noticed meeting of the Advisory Board.
Received on file in the Office of the City Clerk of the City of Palo
Alto on December 10, 2003.
1
Section 1: Identification of the boundaries of the BID or any
benefit zones within the BID.
The boundaries of the BID are within the City limits of the City of
Palo Alto. The approximate boundaries of the BID encompass
the greater downtown area of Palo Alto and extend from El
Camino Real in the West, to Webster Street in the East and from
Lytton Avenue in the North to Addison Avenue in the South (East
of Emerson Street, the boundaries extend only to Forest Avenue
in the South).
Two benefit zones have been identified based on several reviews
by the Advisory Board on the BID and through discussions with
the BID consultant who als0 walked the BID. These benefit
Zones are A and B. Zone A encompasses the primary benefit
zone that is approximately the East side of El Camino Real on the
West to the West side of Webster Street on the East. It extends
from the South side of Lytton Avenue in the North to Forest
Avenue in the South. Zone B encompasses the balance of
businesses in the district, not in Zone A. First floor businesses in
Zone A are in the area of primary benefit. Second floor
businesses in Zone A as well as all businesses in Zone B receive a
secondary benefit and are classified as Zone B businesses for the
purposes of the BID.
A map of the BID Boundaries and benefit zones is available in
Attachment I of this report.
Section 2: The improvements and activities to be provided for
Fiscal Year 2003-04.
No capital improvements are proposed to be provided for Fiscal
Year 2003-04. The activities listed in Attachment 2 of this Report
are proposed to be provided annually. Because the BID will exist
only during a portion of Fiscal Year 2003-04, not all of these
activities may be provided during that Fiscal Year though work
may be done on any or all of the activities during the Fiscal Year.
Section 3: An estimate of the cost of providing the
improvements and activities for Fiscal Year 2003-04.
The total funds available for activities for this fiscal year are
estimated to be: $76,957. * The budget for providing the
activities is set forth in Attachment 2 of this Report.
Section 4: The method and basis of levying the assessment in
sufficient detail to allow each business owner to estimate the
amount of the assessment to be levied against his or her
business for Fiscal Year 2003-04.
Attachment 3 describes the method of calculation used to
determine the cost and benefit to each business located in the
BID. The BID assessments are based on three criteria: the type
of business, the location of the business and the size of the
business.
]:t has been consistently demonstrated that the typical BID
Program places a higher priority on activities such as commercial
marketing. As a result, the retail and restaurant establishments
in the BID are assessed more than service and professional
businesses in the district.
While service-oriented businesses benefit from a BID less than
retailers and restaurateurs, they benefit more than professional
businesses such as medical, dental, architectural, consultant and
legal offices with their minimal advertising and promotion needs.
For these reasons, various business types are assessed according
to the benefit that they receive from the BID, as follows:
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 char.ged by total rooms.
*Based on a calculation that assumes that 40% of businesses in the .26-4 categories for
professional businesses will be single-person businesses (will be adjusted when actual
numbers are available)
The location of a business also determines the degree of benefit
that accrues to that business. Centrally located businesses tend
to benefit more, as do businesses located on the ground floor.
For this reason, A and B benefit zones have been identified for
the BID.
In Palo Alto, Zone A benefit businesses are assessed 100% of the
base benefit assessment while Zone B businesses are assessed
75%.
A third criterion is used in the BID to determine benefit. This
criterion, the size of the business, takes into consideration the
number of full time employees employed by the business. Please
refer to Attachment 3 for a more complete understanding of the
application of these three variables to establish BID benefit.
Attachment 4 is the BID assessment for each business located
within the BID boundaries. Applying the criteria identified in
Attachment 3, a summary of the assessment that applies to each
business by size, type and location is outlined. This outline
provides information by which a business can determine its
annual assessment based on objective criteria. In addition, City
staff mailed an estimated assessment to each business located in
the Downtown Palo Alto BID.
Following the October 27, 2003 City Council meeting, the
Advisory Board recommended several changes to the
assessments for "single person businesses" in the professional
business category.
These included the following revisions:
Establish an exemption for "single person professional
businesses" that have 25% or fewer full time
equivalent (FTE), including the business owner. This
covers employees who work less than10 hours a week
(based on a 40 hour work week (A full FTE equals
approximately 2000 hours annually)
4
Establish an assessment specifically for "single person
businesses" that have 26% FTE to :[ FTE in the
professional business category of the B]:D (A full FTE
equals approximately 2000 hours annually)
Tier other professional businesses by size based
(according to benefit) on the new "single person
business" criteria
Advisory Board members with a unanimous vote affirmed that
they favor this new breakdown. The Board considered a similar
breakdown for other business categories (such as retail~
restaurants, banks, hotels and service businesses), but felt that it
was justified only for the professional business classification
because professional businesses will receive the smallest benefit
from the B~[D.
The Board also explored increasing the assessment for
Downtown’s largest businesses. Their recommendation is that
the assessment as presently tiered represents the nexus between
the assessment and the benefit accruing to the business. At this
time, the recommendation is to leave the largest businesses’
assessment as originally proposed. Following the first six months
of operation (.January 1, 2004-]une 30, 2004), the Advisory
Board will review the database and assessments and will
recommend any changes to City Council at the time of the annual
reauthorization of the B~[D.
Except where otherwise defined, all terms shall have the
meanings identified below:
Definitions of Business Types in the Downtown Business
Zrnprovement District (BID)
Retailers and Restaurants: Businesses that buy or resell goods
such as clothing stores, shoe stores, office supplies as well as
businesses that sell prepared food and drink.
Service Businesses: Businesses that sell services such as
beauty or barber shops, repair shops, most automotive
businesses, dry cleaners, art and dance studios, printing firms,
film processing companies, travel agencies, entertainment
businesses such as theatres, etc.
Hotel and Lodaina: These include businesses that have as their
main business the lodging of customers. This is restricted to
residential businesses that provide lodging services to customers
for less than 30 days.
Professional Businesses: Businesses that require advanced
and/or specialized licenses or academic degrees such as
architects, engineers, attorneys, chiropractors, dentists, doctors,
accountants, optometrists, realtors, insurance brokers, venture
capital firms, consultants, advertising and marketing
professionals and mortgage brokers and similar professions.
Financial Institutions: Includes banking, savings and loan
institutions and credit unions.
Additional clarification on business definitions will be defined
according to Section 18.04.030 (Definitions) of the Palo Alto
Municipal Code.
The Advisory Board recommends that the following businesses be
exempt from the BID assessment"
New businesses established in the BID area following
the annual assessment for the year in which they
locate in the BID area
Non-profit organizations
Newspapers
"Single person professional businesses" that have
25% or less full time equivalent (FTE), including the
business owner
The Assessment calculated shall be paid to the City no later 30
days after receipt of the invoice with the amount of the annual
assessment sent by the City. A second notice will be mailed as a
reminder to businesses that have not remitted payment by that
date.
6
Section 5’ The amount of any surplus or deficit revenues to be
carried over from a previous fiscal year.
Because the BID is a newly proposed district, there is not surplus
or deficit.
Section 6" The amount of any contributions to be made from
sources other than assessments levied pursuant to the law.
Assessment proceeds are estimated to be approximately
$76,957* for Fiscal Year 2003-04. Assessment proceeds will be
spent only on activities authorized in the resolutions of the City
Council of the City of Palo Alto establishing the BID and/or
levying the assessments.
In this first year of operations, there will not be any additional
contributions from any source other than the BID assessments.
Attachments’
Attachment :1: Recommended BID Boundaries
Attachment 2: Budget of Recommended FY 2003-04 BID
Activities
Attachment 3: BID Cost Benefit Analysis
Attachment 4: BIDAssessment Schedule
Attachment 5: BID Advisory Board Members by Business Type
7
*Based on a calculation that assumes that 40% of businesses in the .26-4 categories for
professional businesses will be single-person businesses (will be adjusted when actual
numbers are available)
8
ATTACHMENT I
The City of
Palo Alto
¯
Proposed
Downtown Palo Alto
Business Improvement District
This map is a product of the
City of Paio Alto GIS
Attachment 2
Proposed BID Budget
January 1-3une 30, 2004
Harketing and Promotions including
Business Directory, development of
directional signs, special events planning
Graphic Design (logo design,
banner design, branding, ad designs,
website)
Promotions including banners and hardware
18,000
Beautification (Planning for signage,
enhanced tree lighting
$13,000
$18,000
$5,857
Operations
Staff (Salary for six months, incl. Benefits)
Printing, supplies
Mailing ($370 x 6)
Phone
Travel
One time start-up costs (computer,
printer, fax, copy machine, furniture,
etc.) online access
Audit
Collection costs
Contingencies
Anticipated BID Budget (6 months)
$23,000
$1,000
$2,ooo
$600
$5oo
$5,000
$3,000
$5,OOO
$o
76, 957* * *
*Funds spent for activities will be reduced as needed to pay for overhead, administration and/or coflection
costs
~ As much as possible, the intention of the BID is to spend BID dollars locally within the BID
*~Calculated based on estimate that 40% of BID professional businesses currently classified as under 4
will fall into the "single person professional business" category
Attachment 3
A General Statement Regarding Cost-Benefit Analysis For
BID Businesses Using The Traditional Three 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 after reviewing over 100 BIDs in California, 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 fiat
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) Location 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 benefit 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, i.e., 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.
ATI’ACH!vlENT 4
Downtown Paio Alto Business Improvement District
Suggested Annual BID Assessment
Retailers and
Restaurants
(loo%)
ZONE A ZONE B
(75~
$225.00 (Under 6 FTE employees) (50%)
$340.00 (6 to under 11 FTE employees) (75%)
$450.00 (11+ FTE employees) (I00%)
$170.00
$260.00
$340.00
Service
Businesses
(75%)
$170.00 (Under 4 FTE employees) (50%)
$260.00 (4 to under 7 FTE employees) (75%)
$340.00 (7+ FTE employees) (lOO%)
$130.00
$200.00
$260.00
Professional
Businesses
~o%)
EXEMPT (25% or fewer FTE employees, including the business owner)
$ 60.00 (26% FTE to 1 FTE employees) (25%)$ 50.00
$110.00 (2 to 4 FTE employees) (50%)$ 90.00
$170.00 (5 to 9 FTE employees) (75%)$130.00
$225.00 (10+ FTE employees) (Ioo%)$170.00
Lodging
Businesses $225.00 (up to 20 rooms) (50%)$170.00
doo%)$340.00 (21 to 40 rooms) (75%)$260.00
$450.00 (41+ rooms) (loo%)$340.00
Financial
Institutions $500.00 $500.00
Note 1: For retail, restaurant, service, and professional businesses, size will be determined by
number of employees either full-time or equivalent (FTE) made up of multiples of part-time
employees. A full FTE equals approximately 2000 hours annually. Lodging facilities will be
charged by number of rooms available and financial institutions will be charged a flat fee.
Note 2: Second floor (and higher) businesses located within Zone A will be assessed the same
as similar street-level businesses located within Zone B.
Note 3: Assessment amounts are rounded to the nearest ten dollars. The minimum
assessment will be $50.00.
Attachment 5
Downtown BTD Advisory Board Members by Type of Business
Retailers and Restaurants
Georgie Gleim, Gleim the Jeweler
Cornelia Pendleton, University Art
Faith Bell, Bell’s Books
]:srael Zehavi, Diamonds of Palo Alto
John Aylward, Caf~ Niebaum Coppola
Alex Resnik, Spago
Hotel and Lodqinq
Stephanie Wansek, Cardinal Hotel
Barbara Gross, Garden Court Hotel
Professional
Sunny Dykwel, Alain Pinel Realtors
Warren Thoits, Thoits Brothers ]:nsurance
Jim Maliksi, Jim Naliksi Architects
Beth Rosenthal, Psychologist
Victoria Lukanovich, F1 ]:T Consulting
Financial Tnstitutions
Steve Warden, Union Bank
Chamber of Commerce
Sandra Lonnquist, PA Chamber of Commerce
NOT YET APPROVED ATTACHMENT 2
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PAL0
ALTO CONFIRMING THE REVISED REPORT OF THE
ADVISORY BOARD IN CONNECTION WITH THE
ESTABLISPLMENT OF THE PROPOSED DOWNTOWN PALOALTO
BUSINESS IMPROVEMENT DISTRICT,DECLARING ITS
INTENTION TO ESTABLISH SAID DISTRICT, DECLARING
ITS INTENTION TO LEVY AN ASSESSMENT ON
BUSINESSES WITHIN 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
WHEREAS, the City of Pa!o Alto (the "City") is a
charter city organized and existing under the laws of the State
of California; and
WHEREAS, it is in the public interest to promote the
economic vitality and physical maintenance of business districts
within the City in order to prevent erosion of the business
districts and to attract and retain businesses; and
WHEREAS, the Parking and Business Improvement Area Law
of 1989 (California Streets and Highways Code Sections 36500 et
seq.) (the "Law") provides that the City may establish a parking
and business improvement area (a "PBIA") for the purpose of
providing improvements and promoting activities within a PBIA
and may levy an assessment against businesses within a PBIA to
fund improvements and activities; and
WHEREAS, downtown businesses have been exploring the
possibility of a PBIA for downtown Pa!o Alto; and
Z~EREAS, the City has received a petition signed by the
owners or authorized representatives of over fifty downtown
businesses requesting that the City initiate proceedings for the
formation of a PBIA for the downtown area; and
~iEREAS, pursuant to its Resolution No. 8339 adopted on
September 22, 2003, as amended by its Resolution No. 8341,
adopted on October 7, 2003, the City Council (i) appointed an
Advisory Board (the "Advisory Board") for the proposed Downtown
Pa!o Alto Business Improvement District, a proposed PBIA, (ii)
directed the preparation of a report by the Advisory Board
pursuant to Section 36533(b) 0f the Law; and, (iii) set October
27, 2003 the date for a public meeting and November 24, 2003
as the date for a public hearing to receive testimony on the
031209 sm 0100172 1
NOT YET APPROVED
proposed establishment of the Downtown Business Improvement
District and the proposed assessment; and
WHEREAS, on October 27, 2003, in accordance with Section
36533 of the Law, the Advisory Board prepared and filed with the
City Clerk a report and the City Council held a public meeting
on the establishment of the District and the levy of
assessments; and
WHEREAS, following the public meeting on October 27,
2003, the City Council by its Resolution No. 8360 directed the
Advisory Board to review the proposed assessments on businesses
in the District and submit a revised report and set December 15,
2003 as the date for a rescheduled public meeting on the
establishment of the District and the levy of assessments and
January 12, 2004 as the date for a rescheduled public hearing on
the establishment of the District and the levy of assessments;
and
WHEREAS, in accordance with Section 36533 of the Law,
the Advisory Board prepared and filed with the City Clerk a
revised report entitled, "Report of the Advisory Board with
Regard to the Proposed Downtown Business District for Fiscal
Year 2003-04" (the ~Revised Report"). The Revised Report is on
file in the office of the City Clerk and open to public
inspection.
NOW, THEREFORE, the Council of the City of Palo Alto
does RESOLVE as follows:
SECTION i. The City Council hereby approves the Revised
Report as filed by the Advisory Board and, pursuant to the Law,
the City Council declares its intention to establish the
Downto~ Pa!o Alto Business Improvement District (the
"District") and to levy and collect an assessment against
businesses within the District for Fiscal Year 2003-2004 (July
i, 2003 through June 30, 2004). Such assessment shall be in
addition to any assessments, fees, charges or taxes imposed by
the City.
SECTION 2. The boundaries of the District are within
the City limits of the City of Pa!o Alto (the "City") and
encompass the greater downtown area of the City, generally
extending from E! Camino Real to the West, 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
031209 sm 0100172 2
NOT YET APPROVED
the District attached hereto as Exhibit ~A" and incorporated
herein by reference for a complete description of the boundaries
of the District.
SECTION 3. The types of i~Drovements to be funded by
the levy of an assessment against businesses within the District
are the acquisition, construction, installation or maintenance
of any tangible property with an estimated useful life of five
years or more. The types of activities to be funded by the levy
of an assessment against businesses within the District are the
promotion of public events which benefit businesses in the area
and which take place on or in public places within the District;
the furnishing of music in any public place in the District; and
activities which benefit businesses located and operating in the
District. No improvements are proposed to be funded in Fiscal
Year 2003-04. Reference is made to the Revised Report for a
description of the activities to be funded by the District in
Fiscal Year 2003-04.
SECTION 4. Except where funds are otherwise available,
an assessment will be levied annually to pay for all
improvements and activities within the District commencing, with
Fiscal Year 2003-04.
SECTION5. The proposed method and basis of levying the
assessment is set forth in Exhibit "B" attached hereto and
incorporated herein by reference. Assessments for Fisca! Year
2003-04 are proposed to be prorated, with businesses within the
District assessed one-half of the proposed amount of the annua!
assessment.
As set forth in Exhibit "B", 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 E1 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. Reference is hereby made to the map of the District
attached hereto as Exhibit "A" for a description of the zones.
SECTION 6. New businesses established in the District
after the beginning of any fiscal year shal! be exempt from the
le~ of the assessment for that fiscal year. In addition, non-
031209 sm 0100172 3
NOT YET APPROVED
profit organizations, newspapers and professional ~single-person
businesses," defined as those businesses which 25% or fewer full
time equivalent employees, including the business owner, shal!
be exempt from the assessment.
SECTION 7. On December 15, 2003, the City Council held
a noticed Public Meeting regarding the establishment of the
District and the levy of the assessment against businesses
located in the District. At the Public Meeting, al! persons had
an opportunity to give public testimony regarding the
establishment of the District and the Zones therein, and the
levy of the assessment.
SECTION 8. The City Council will hold a Public Hearing
on January 12, 2004 at 7:00 p.m. or as soon thereafter as
practicable, in the City Council Chambers at 250 Hamilton
Avenue, Palo Alto, California, 94301.
At the Public Hearing, the testimony of all interested
persons regarding the establishment of the District, the extent
of the District, the Assessment, the furnishing of specific
types of improvements and activities by the District or the
Fiscal Year 2003-2004 levy of the assessment shall be heard. A
protest may be made orally or in writing by any interested
person.
Any protest pertaining to the regularity or sufficiency
of the proceedings must be in writing and shal! clearly set
forth the irregularity or defect to which the objection is made.
Every written protest must be filed with the City Clerk
at or before the time fixed for the Public Hearing. The City
Council may waive any irregularity in the form or content of any
written protest and at the Public Hearing may correct minor
defects in the proceedings. A written protest may be withdrawn
in writing at any time before the conclusion of the Public
Hearing.
Each written protest must contain a description of the
business in which the person subscribing the protest is
interested sufficient to identify the business and, if a person
subscribing is not shown on the official records of the City as
the owner of the business, the protest shal! contain or be
accompanied by written evidence that the person subscribing is
the owner of the business. A written protest which does not
comply with the requirements set forth in this Section will not
be counted in determining a majority protest (as defined below).
031209 sm 0100172 4
NOT YET APPROVED
If, at the conclusion of the Public Hearing, written
protests are received from the owners of businesses in the
District which will pay 50 percent or more of the assessment
proposed to be levied and protests are not withdrawn so as to
reduce the protests to less than that 50 percent (i.e., there is
a majority protest), no further proceedings to create the
District, or to levy the assessment, as described in this
Resolution, shall be taken for a period of one year from the
date of the finding of a majority protest by the City Council.
If the majority protest is only against the furnishing
of a specified type or types of improvement or activity within
the District, those types of improvements or activities must be
eliminated.
SECTION 9. The City Clerk is directed to give such
notice of the Public Hearing as is required by law.
SECTION i0. The Counci! finds that this is not a
project under the California Environmental Quality Act and,
therefore, no environmental impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
City Attorney City Manager
Director of Administrative
Services
031209 sm 0100172 5
The Cily of
Palo Alto
Proposed
Downtown Palo Alto
Business Improvement District
This map is a product of the
City of Palo Alto GIS
EXHIBIT "A"
Downtown Palo Alto Business Improvement District
Suqgested Annual BID Assessment
Retailers and
Restaurants
(lOO%)
ZONE A ZONE B
(~
$225.00 (Under 6 FTE employees) (50%)
$340.00 (6 to under 11 FTE employees) (75%)
$450.00 (11 + FTE employees) (~oo%)
$!70.00
$260.00
$340.00
Service
Businesses
(75%)
$170.00 (Under 4 FTE employees) (50%)
$260.00 (4 to under 7 FTE employees) (75%)
$340.00 (7+ FTE employees) (lOO%)
$130.00
$200.00
$260.00
Professional
Businesses
~o%)
EXEMPT (25% or fewer FTE employees, including the business owner)
$ 60.00 (26% FTE to 1 FTE employees) (25%)$ 50.00
$110.00 (2 to 4 FTE employees) (50%)$ 90.00
$170.00 (5 to 9 FTE employees) (75%)$130.00
$225.00 (1 O+ FTE employees) (lOO%)$170.00
Lodging
Businesses
(100%)
$225.00 (up to 20 rooms) (5o%)
$340.00 (21 to 40 rooms) (75%)
$450.00 (41+ rooms) (lOO%)
$170.00
$260.O0
$34O.O0
Financial
Institutions $500.00 $500.00
Note 1: For retail, restaurant, service, and professional businesses, size will be determined by
number of employees either full-time or equivalent (FTE) made up of multiples of part-time
employees. A full FTE equals approximately 2000 hours annually. Lodging facilities will be
charged by number of rooms available and financial institutions will be charged a flat fee.
Note 2: Second floor (and higher) businesses located within Zone A will be assessed the same
as similar street-level businesses located within Zone B.
Note 3: Assessment amounts are rounded to the nearest ten dollars. The minimum
assessment will be $50.00.
EXHIBIT
ATTACHMENT 4
NOT YET APPROVED
ORDINANCE NO.
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
follows:
SECTION i. Findings.The City Council finds and
declares that:
(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 within Said
District for Fisca! 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 within 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
within the proposed District, and regarding the levy of an
040107 sm 0100177 1
NOT YET APPROVED
assessment against businesses within 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 ofthe
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 fundedby 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 thebusiness. 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 E1 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, al! 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 E1 Camino Real to the West,
040107 sm 0100177 2
NOT YET APPROVED
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," 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" 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 i0th° 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 i0th, 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
040107 sm 0100177 3
NOT YET APPROVED
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 "received" 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
040107 sm 0100177
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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 ResolutionNo. 8387. No improvements
will be funded in fiscal year 2003-2004.
SECTION 7. Contract Services. The City 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 i0. 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 any one or more sections, sentences, clauses, or phrases
may be declared invalid or unconstitutional.
//
//
//
//
//
040107 sm 0100177 5
NOT YET APPROVED
SECTION ii. 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:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
Senior Assistant City Attorney City Manager
Director of Administrative
Services
040107 sm 0100177
@
The City of
Palo Alto
Proposed
Downtown Palo Alto
Business Improvement District
This map is a product of the
City of Palo Alto GIS
EXHIBIT "A"
EXHIBIT "B"
A General Statement Regarding Cost-Benefit Analysis For
BID Businesses Using The Traditional Three 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) Location 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 benefit 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, i.e., 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:50% of base assessment¯Medium: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+ F-I’E*
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.