HomeMy WebLinkAbout2003-11-17 City Council (8)City of Palo Alto
City Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER
lol
DEPARTMENT: City Manager
November 17, 2003 CMR: 505:03
REPORT ON BID 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.
No
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 Advisory Board (Board), appointed on October 7, 2003, submitted its report to
City Council on October 27, 2003, 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 the 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
Environment Quality Act.
ATTACHMENTS
not considered a project under the California
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: CMR 436:03 9/22/03
B.: CMR 457:03 10/7/03
C: CMR481:03 10/22/03
CMR:505:03 Page 3 of 4
PREPARED BY:
Su~an Arpan, Economic Development Manager
CITY MANAGER APPROVAL:
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 CONNECTION WITH
THE PROPOSED ESTABLISHNENT OF THE DOWNTOWN
BUSINESS IMPROVEMENT 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
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 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, downtown 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 Council 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 Counci! on the
expenditure of revenues derived from the levy of assessments, on
031112 sm 0100160 1
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 levy of assessments; and
WHEREAS, fol!owing 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 i. 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 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. 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 Council
Chambers at 250 Hamilton Avenue, Palo Alto, California.
SECTION 3. The City Clerk is directed to give notice of
the rescheduled public meeting and the public hearing as
required by law.
//
//
//
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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
031112 sm 0100160
3
Attachment 2: Downtown Palo Alto Business Improvement District
Su_cl_qested 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) (5o%)
$250.00 (4 to under 7 FTE employees) (75%)
$340.00 (7+ FTE employees) (lO0%)
$130.00
$190.00
$250.00
Professional
Businesses
(50%)
EXEMPT (25% or less FTE employee, including the business owner)
$ 60.00 (26% FTE to 1 FTE employee) (25%)$ 50.00
$120.00 (2 to 4 FTE employees) (5o%)$ 90.00
$170.00 (5 to 9 FTE employees) (75%)$130.00
$225.00 (10+ FTE employees) (lOO%)$170.00
Lodging
Businesses $225.00 (up to 20 rooms) (50%)$170.00
(10o%)$340.00 (21 to 40 rooms) (75%)$250.00
$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 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:
City
Attachment 3A
City of Palo Alto
Manager’s Report
DATE:
SUB~CT:
CITY MANAGER DEP2a_RT~NT: CITY !~WL .<,NAGER
SEPTEMBER_.~, ~O0a C~:
~CO?~N~ATiON TO .~OPT A P~SOLUTION TO APPOinT
T~E _~ ~OC _~]SORY COMmiTTEE 5{E~ERS AS T~
FOK~ .~¢SORY BO~ THAT ~L P~PA~
~PORT ~ ~COg~NDATIONS TO CITY CO~C~ ON A
D~,CT T~ DO~TOS~ B~ ~SqSORY BO_~ TO
P~P~ T~ REPORT TO T~ C!TY COU~C~ T~&T
~QU~D BY B~ LAW; ~ND SET THE PLACE tN~ TtS~ FOR
A PE~LIC ~ETBWG (OCTOBER 27, 2003) ~N~ PUNLIC
HEA~-G {NOVEMBER 17, 2003) ON T~ EST.~L!SH~NT OF
A DOX~TOWN B~
~COMM~E. NDAT!ON
Staff recom2aends that the CiB, Council:
1. Adopt the resolution, which appoints flae Ad Hoc Advisow Commi~ee Members
as the Advisow Board that will prepare the requh-ed Report and
Recommendations to City Council on a Downtown BID.
Direct the Downtown BID Advisory Board to prepare the report to City Council
required by B!D 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 thereaker as is practicable) in the
Council Chmnbers as the time and place for a public meeting on the proposed
BID. The Council may also consider approval of the Report of the Advisow
Board on the BID and Resolution of Intention to Establish a Downtown BiD on
that date.
3. Set November 17, 2003 at 7:00 p.m. (or as soon thereafter as is practicable) in the
CMR:436:03 Page 1 of 7
City Council Chambers as the place and time i%r a public heaffmg to hear
cormments, protests and testimony on the establishn~ent of a downtown BID.
B ACKGROL~-D
Downtown _Merchmm~ have been -"~ ~. ~ *l~e ~~e~iAo~m~ ~ oossibility of a B~ %r Downto~,m Palo
~to. The B~ will assess busMesses pro~dde a vmJety of semdces to e~ce the
economHc viability of Downtown Palo ~to. The formation of a B~ ~d ~e te~ of
assessments a_ams~ bus~esses ~ ~e B~ to ~c~ improvements and activities
benefit~g 5e bus~esses ~e au~oz~zed by state law (CMiz%~Ja S~eeis ~d Highway
Code Section 3~500 ~d fo!!ow~g). The pu~ose of a B!D is to promote ~d ~prove a
specific geo~ap~c area for the benefit of ~e bus~esses M the identified BID aea. A
BID Advisoo, Board makes recon~endafio~ to 5e Ci~ Comncil on ~e expenditure of
revenues dmived fiom ~e le~%, of assessments on 5e classification of businesses and ~e
me~od ~d basis of le~g,~g 5e ~"*"a~sessme~b and prepaes a repotl, ~clu~g a budget,
for each yea 5at assessments w~1 be levied
BIDs have been es~b,.shed in over 200 bus~ess areas in Califoh-n_ia including Mountain
View, San Jose and Burlingame.
Activities that can be funded with BID proceeds include:
o E~hanced Downtown maintenance
o Promotional events to draw customers to the Downtown
o Provision of banners, directional markers, etc.
o Paying for a staff person to coordinate Downtown activities
o Coordination of business, City. and community interests
o Provision of business h~%mmtion, marketing materials and maps to big!flight
Downtown businesses
DISCUSSION
Downtown Palo Alto has long been known as a tlmiving, dynamic business disU-ict. To
the credit of many local merchants, the success of the Downtown has been aaained
through the efforts of volunteers such as those who participate in the Downtown
Marke.ting Co~_m:Mttee of the Palo Alto Chamber of Commerce. While the efforts of
these volunteers have made a positive impact on the area, it is dear fl~at many
oppo~ties to increase the viability of th~ Downtown are missed because business
CMR:-,a6.0a Page. 2 of 7
owners and operators cannot successfully run businesses and provide the marketing and
other sen:ices needed to strengthen *~he Downtown. For this reason, the Downtown
Marketing Comm:ittee of the Chamber (Committee), representing both members and non-
members of the Chamber, identified the need x%r a Downtown BID.
On December 2, 2002, the representatives of the Committee formally presented a petition
sig-ned by over 50 do’,a,-ntov~ businesses dur~mg CiD, Council oral co~urdcations. The
petkion requested that the City Co ",uncil agendize the discussion of ti~e Down~own B!D
and consider passing a Resolution of Intention to Estabiish a Downtown BiD at a
subsequent meeting.
On March 17, ~.00~, Ci-~.-Council appointed an Ad Hoc Advisoo, Commi~ee for the
BID. Atunetime _0 ~. . ~ .¯~.~-~’o~ th,. appomm_em, fl~e group was ~dena>.ed as an ad hoc commi~ee to
explore the ~%asibility of creating a BID and to make recon~endations to the City..
Council. The BID law requires a formal Advisor-y Board to be established that will
submit annual reports and reco~nmendations to City Council with respect to the BID
assessment mad expenditures. The BID taw authorizes appointment of the
Board prior to establishment of the BID. As the Ad Hoc Connn~i~ee has been meeting
regularly since March and has provided the leadership for ins initiative, staff
recon-nmaends that this co~-ma~ittee be formalized and named as the Advisory Board to
prepare the armual repots and recozm-nendations to City Council on a Downtown BID.
In July and August of 2003, an intern was hired by the City to develop a database of
businesses located in the BID area. The intern waE~:ed the district several times and
~ctentln~Ct every address and business in the district. "~~.met nnam~s supported prior work
on t_he BID database of businesses and resulted in the identification of 9 !3 businesses.
To be ce~-cain that all businesses in the BID were informed and could become involved in
the planning of the BID, the Conmxittee sent letters to each bushaess owner in the
proposed area, identifying the proposed BID boundaries, benefits of the BID, activities
that could be accomplished and an estimate of revenues that could be anticipated fi-om the
co!lection of a downtown BID assessment. Multiple discussions at monthly Downtown
Marketing meetings and several additional meetings were held to discuss the BID for
Downtown Paio Alto with affected merchants. Meetings were held.on tSe *hi!owing
dates and times:
August 21 8
August 28, 2002 6pm
September 18, 2002 gum
Cardinal Hotel
Blue Chalk Cafe
Cardi~al Hotel
CNfR:436:03 Page 3 of 7
September 18, 2002
November 20, 2002
July 30, 2003 9am
Blue Chalk Care
Chamber Mixer @ Zibibbo Resmuranl
Cardinal Hotel
For the meetha.g that was he!d on July 30, 2003, a flyer was t~:e= to eveu business
within 5e proposed BID bound~es to b~z%i,_-n each business of the date, time and
!ocation of the business outreach meeting and invite them to hi=rag any concerns or
con~_nents for 5m÷&er consideration.
An additional business outreach meeting is schedMed for October 8, 2003 at 9:00 am at
the C~dinal Hotel to Once again hear any comments and answer any- quesiions
concerning the proposed BID.
A noticed public meeting set and a~ended by the City Council is also required according
to BID law. The attached resolution sets the punic mee5ng to hear colm~nents on the
proposed establishment of a BID on October 27, 2003. Fo!lowing the punic meeting,
Ci~ Council may approve the report of the Advisow Board and may consider adopting a
Resolution of Ixatention to Establish a Business Improvement Diswict.
The Resolution of Intention to Establish a Downtown B!D must include the following:
Description of the boundaries of the area and identification of an5, separate ben,~nt
zones.
Name of the proposed area.
Type or b’pes of improvements and activities to be fmnded by the levy of
assessments.
Statement that, except where funds are othe~-~dse available, an assessment wi!l be
levied armually to pay for ai1 improvements and activities in.the area.
Identification of the proposed method and basis of levying the assessment, ~
sufficient detail to allow each business owner to estimate the amount of the
assessment to be ievied against his/her business.
Determination of whether new businesses will be exempt fiom 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 CiD" Council chooses to adopt the Resolution of Intention, the following actions
must be taken:
CMR:436:03 Page 4 of 7
A public hearing (noticed according to BID law) must be held not less than 10 or
more fi~an 30 days after ~he adoption of the reso~,udon o~ ~n~on. (Th~ a~ached
resolution wo~d set ~s h~a~g for November 17, 2003).
At ~e hea~g, ie Ci) Co~cil must consider the test~ony of a!l ~terested
perso~ for and a~t the establisNnent of the BID, ~e extent of ~e mea wi~n
¯ e B~, ~d on ~e ~s~ng of specified b~es of hnprovemems or activities by
ie B~.
~y ~terested person may make protests orally or N writNg. Wi~en protests
must be Ned wi~ ~e Ci~ Clerk aI or before te t~e fixed for ie pub!ic he~mg.
If wfi~en protests to ie estab!isNnent of a BID se received ~om ~e owners of
businesses ~ the proposed sea, wNch will pay 50% or more of ~e iota1 BID
assessment, no ~mier procee~gs to create te business ffmprovement area or to
Ie~y flae proposed assessment shai1 be considered for at least a year.
At te conclusion of ~e public heaz~g to establish ~e BID, the CiD, Council may
adopt, revise, ch~ge, reduce or modi~ ie proposed assessment or ~e
~provements ~d activities proposed.
I~ me Ci~ Com~cil. ~ollowmg the pubi~c he~g, decides to establish te B~, it
w~l adopt ~ or~ce to ~at effect. The ord~ce will contain ff~o~ation
requked by BID law ~cluding the ma~er of collecion and Iev7 of assessments.
In subsequent ysss the Advisoo~ Board will file an a~ual repo~ m~g
recon~enaanons on ~e ~o!lowm_:
o Expendi~e of revenues deived ~om ~e le~D, of assessments
o Classification ofbus~esses
o Meiod and basis of lex%-~g assessments
The attached resolution sets the place and time for the public hearb~Z on the proposed
BID to hear continents, protests and testimony on the establisMnent 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, the extent of the
area and activities proposed shai1 be described.
RESOURCE IM[PACT
The Economic Development Division in the Cib7 Manager’s Office has provided staff
suppor~ to the Advisory Comani~ee. Economic Development staff have overseen the
creation of a business database and cross referenced it with Reference USA, an elecnonic
database, to ensme that all downto~n bushaesses wiUhin the BID boundaries are
identified. In addition, staff have assisted in the preparation of the budget identi~dng
proposed BID activities, prepared a comprehensive reference booklet for distribution to
CM-R:436:03 Page 5 of 7
businesses .and worked with a consultant to develop the cost benefit analysis and
a~s,~s~me~t~ ~ ~ -" ~%rmula for BID assessments. Staff wi!l also prepare and ma~J inHvidual
notices to each business located in ~" ~m,~ BID pplor to the pub~c meeting.
The City A~omey’s ~-~o~,~ce has provided legN oversight and direction regardin~
noticing and scheduling of required BID actions.
There are s~dll a number of issues to be resolved before a Downtown BID could become
operational. For example, since ~e City collects the assessment, impacts to the
AdaJnistrafive Services Department must be considered. The Ci~ of Palo Alto does not
have a business license taz<, so there was not an existing database available for the
coltection of BID assessments. Now that the City. has created a database of downtown
businesses, a methodolog7 for the collection of the BID assessments must be developed.
Ci~ staff ~om affected depmmaents will reconcile these issues, gauge hnpacts to City
resomces and make recommendations to the City Council. These inapacts and
recon~mendations wilt be a part of ~e staff report to City Council at the tinae of the
Downtown BID public healing. BID law provides that costs for the establishment of the
BID may be recouped. Staff has not made a recommendation regarding the
reimbursement of costs that the City has incu~ed. This will be discussed in more detail
at the time of the Pubiic Hearing.
The establishment of a Downtown BID is "a~ -;cons~en, with Comprehensive Plan Policies
mad -was a pat~ of the recorn_n_~endations for Downtown Palo Alto identified in the Retail
Strategy for the City of Palo Alto prepared by Sedway aid Associates in June 2000.
The estab!ist~nent of a BID supports the following Comprehensive Plan Policies:
Policy ~-4 Nmture and support established businesses as well as new businesses
Program ~8-~ Initiate assessment disU-icts or other programs to facilitate neighborhood
shopping center improvements such as landscaping, parking and access to public
transportation.
Policy Y-f I Encore-age the use of puNic/private pm-merships as a means of redeveloping
and revitalizing selected areas.
Policy B-20 Suppor~ and e-~hance the University Avenue/Downtown area as a vital nSxed
use area contaiNng retail, personal service, office, restaurant, and entertainment uses.
Recognize the importance of an appropriate retail mix, including smali !ocal businesses,
to the continued vitality of Downtown.
CMR.4.~o.0o Page 6 of 7
TMs action by the Ci~ Council is not conslaered a p~,j~t under me Ca!ifomia
Environment Quaii~ Act.
Su~an :Q-pan, E.c6no ~m~ Deve!opm~nt Manager
CITY !vL-~NAGER .MPPROVAL:
CIvEP.:436:03 Page 7 of 7
P~ES OLUTi ON NO
P~ESOLUTiON OF THE COUNCIL OF THE CITY OF P-~-~O .~-LTO
APPOINTING ~!~ .~._DV! S ORY B0~HR~D, DIRECTING THE
PREPg-n-~.TION OF A REPORT FOR F!SC.~_E~ YE.h_R 2003-2004,
~IN~-D DIRECTING TH_~.T NOTICE BE GI%~EN OF A PUBLIC
!~_EETING 9_ND PUBLIC HE_~_RING IN CO~-TECTiON WiTH THE
PROPOSED ESTg~BLISIt!M_ENT OF THE DOW!~TOWN BUSINESS
IMPROVEMENT DISTRICT .~!TO THE BROPOSED LED~/_ OF 9~N
ASSESSI~_~IgT /aGAINST BUSiI~ESSES WITHIN SUCH DISTRICT
~zRmAS the City of Paio Alto (the "City") is a charter
city organized and existing under the laws o~ the State of
California; and
~,~EREAS, it is in the public interest to promote the
economic vitality and physica! maintenance of business districts
the City in order to prevent erosion of t~=~ business
districts and to attract and retain businesses; and
~{EREAS, 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 ~ea for the purpose of providing im_mrovements
and promoting activities within a business district and may !e%~ an
assessment against businesses within a Parking and .Business
improvement Area to fund improvements and activities; and
~THmP~EAS,_@obm.~ow_~ business merchants have been exm!or{r,g
.... ~__~d~_s~r±c~ for downto~the moss~m~!~_ty
Pa!o Alto; and
~IEREAS, the City has received a petition signed by the
owners or authorized representatives of over fifty dom~tob~
businesses requesting that the City initiate proceedings for the
formation of a Parking and Business Improvement Area for the
do%~tom~ area; and
Z%ImR~AS the City wishes to _n~e proceedings rot the
formation of a Parking and Business Improvement Area for the
dove_town area pursuant to the Law; and
030917 syn 0100126
~EREAS, the Law recmires the City Counci! to appoint an
adviso<~ board ~ich shal! make recommendations to the City Co~nci!
on the expenditure of revenues derived from the !e~r_w of
assessments, on the class~=’_~ic=czon-~’ of businesses, as aop!icab!e,_
and on the method and basis of levying the assessments; and
¼nmREAS on March 17 2003 the City Counci! appointed a
Do%~_tov~_ BID Ad Hoc Committee to review options and make
recommendations to the City Council in connection with a proposed
Business i~mrovement Area for the dowm~to~ area;
~n~r~u~,s, n~ Counci! of the City of Pa!o Alto does
RmSOLVE as fol!ows:
SECTION !. The Co~ncil hereby appoints the Do~m~to~m_ BID Ad
Hoc Co~m~ittee to serve as the advisory board for the proposed
Dov~_to~m Business improvement District (the "District") pursu~-±t to
Section 36530 of the Law (the "Advisory Board").
SECTION 2. The Council hereby directs the Advisory Board
to prepare and file with the City Clerk, in accordance with Section
36533 of the Law a report for fiscal year 2003-2004 in connection
with the proposed establishment of the District.
SECTION 3. The Counci! hereby sets October 27, 2003 as the
date for a public meeting on the estab!is~ment of the District and
the !em~ of assessments and November 17, 2003 as the date for a
public hearing on the estab!is~ment of the District and the !e~ of
assessments. Both the public meeting and the public hearing wil!
beheld at 7:00 p.m., or as soon thereafter as practicable, in the
City Council Chambers at 250 H~milton Avenue, Pa!o Alto,
California.
SECTION 4. The City Clerk is directed to give notice of
the public meeting and the public hearing as required by law.
//
//
//
//
//
//
//
//
030917 syn 0100126
SECTION 5. The Counci! finds that this is not a project
under the California Environmenta! Quality Act and, therefore, no
enviro~n_menta! impact assessment is necessary.
INTRODUCED ~_ND PASSED:
AYES:
NOES:
9~SENT:
9~STENT!0NS:
ATTEST:APPROVED:
City Clerk
APPR0%~D AS TO FO~:
Senior Asst. City Attorney
Hayor
City Hanager
Director of Administrative
Services
030~I7 syn 0100126
TO:
FROM:
DATE:
SUBJECT:
Attachment 3B
City of Palo Alto
City Manager’s ort
HONORABLE CITY COUNCIL
CITY MANAGER
October 7, 2003
RECOMMENDATIONTO ADOPT
DEPARTMENT: City Manager
CMR: 457:03
A RESOLUTION AMENDING
RESOLUTION NO. 8339, TO APPOINT THREE ADDITIONAL
PROFESSIONAL BUSINESS MEMBERS TO THE BUSINESS
IMPROVEMENT (BID) ADVISORY BOARD AND TO CHANGE
THE DATE OF THE PUBIC HEARING ON THE
ESTABLISHMENT OF THE DOWNTOWN BID FROM
NOVEMBER 17, 2003 TO NOVEMBER 24, 2003.
RECOMMENDATION
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) Advisory
Board at a maximum of 15 members
o Appoint the following individuals to the BID Advisory Board:
[] Victoria S. Lukanovich Professiona! Business
Website design, computer assistance
[]Jim Maliksi Professional Business
Architect
[]Beth Rosenthal Professional Business
Psychologist
o Set November 24, 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 heating to hear
comments, protests and testimony on the establishment of a downtown BID.
,BACKGROUND
At the September 22, 2003 City Council meeting, the City Council approved the
following actions:
CMR:457:03 Page 1 of 5
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:
Expenditure of revenues derived from the levy of assessments
Classification of businesses
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.
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
City Council added to the first action that the Advisory Board includes the appointment
of additional BID Advisory Board Mernbers to include a geater 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
submit annual reports and recommendations to City Counci! 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
Advisory Board add more professional businesses to its membership. City Council also
requested that the Committee recommend the size of the Commi~ee.
CMR:457:03 Page 2 of 5
The members of the Ad Hoc Advisory Committee were:
Stephanie Wansek
Cornelia Pendleton
Georgie Gleim
Warren Thoits
Israel Zehavi
Steve Warden
John Aywald
Alex Resnick
Faith Bell
Sandra Lonnquist
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
Alain 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 the 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 psychologist.
The BID Advisory recommends the appointment of the following individuals to the
formal Advisory Board:
Beth ,Rosenthal, PhD, a licensed psychologist 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
[]Victoria S. Lukanovich, F1 IT Consulting, a web design and computer consultant,
at 425 Alma Street, Palo Alto
CMSR: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, psychologist, 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:
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/Downtown area as a vital mixed
use area containing retail, personal service, office, restaurant, and entertainment uses.
CMR:457:03 Page 4 of 5
Recog’nize 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
Environment Quality Act.
Attachment 1: CMR: 436:03 from September 22, 2003
Attachmem 2: Resolution
PREPARED BY:
a project under the California
S san~~an, Ec~lopment Manager
CITY MANAGER APPROVAL:
City er
CIvlR:457:03 Page 5 of 5
ATTACHMENT.I
TO:
City of Palo Alto
City Manager’s Report
FROL~:
DATE:
S<n3~CT:
CI~7 ]~£%~NAGER DEPARTI%fEAqh CITY I~NAGER
SEPTEMBER._~, ~00~C~: 4~6:0~
~CO~N~AT!ON .TO .~OFT A ~SOLUTION TO
T~ ~ HOC ~qSORY COh~TTEE ~~ERS AS T~
FO~ ~XqSORY BO~2~ T~AT ~L PP~P~ THE
~PORT _MND ~.COb~NDATIONS TO CITY COU~C~ ON A
DO~TO~’~ BUS~SS ~RO~,~NT DIST~CT ~);
D~CT T~ DO~’~TO~%~ B~ .~SORY BO.~ TO
P~P~ T~ ~.PORT TO T~E CITY COU~C~ T~&T IS
~Q~-D BY BID LAW; _Mh~ SET T~ PLACE .~ND TI~ FOR
A PL~LIC ~ETLNG (OCTOBER 27, 2003) ~b~ PL~LIC
~E.~G ~O~ER 17, 2003) ON T~ EST:~LIS~5~NT OF
A DO~%~TOWN BID
~CO~{M3{NDATION
S m~i recommends that the ~i~ Counci!:
I. Adopt the resolution, which mppoints the Ad Hoc Advisory Commi~ee Members
as the Advisor Board that will prepare the required Repo~ and
Recommendatio~ to City Council on a Downtov, m BLD.
Direct the Downtown BID Advisory Board to prepare the repor~ to City- Co~cil
required by B~A) law and provide recormnendations that will " " ~
o Expenditure of revenues derived fi-om the levy of assessments
o C!assification of businesses
o Method and basis of lewing 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 atso consider approval of the Report o~ the
Board on the BID and Resolution of J~tention to Establish a Downtown BID on
that date.
3. Set November !7, 2003 at 7:00 p.m. (or as soon thereaker as is practicable) in the
Page 1 of 7
City Council Chambers as the place and t~ne for a public hea~ing to hear
commems~ protests and testimony on the est~,bHshment of a downtown BID.
BACKGROL~TD
Downtown Merchan’~ have been exploring the possibility of a BID for Do,zmto~n Palo
Alto. The BID will assess businesses provide a vmdety of sendces to enhance the
economic viabiii~ of Downtown Palo _A!to. The formation of a BID and the levy of
assessments against businesses in the B!D to finance improvements and activities
benefiting the businesses are authorized by state law (Califorc.ia Streets and Highway
Code Section 36500 and following). The pu~ose of a BID is to promote and improve a
specific geo~aphic area for ~e 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 le~ of assessments on the classification of businesses and ~e
method .and basis of levying the assessments and prepares a report, including a budget,
for each year that assessments wi!l be levied
BIDs have been established in over 200 business areas in California including Mountain
View, San Jose and B~tingame.
¯ Ac*dvi~ies that can be funded wi~da BID proceeds include:
o Enhanced Downtown m~dntenance
o Promomona! events to ~aw customers to the Do~town
o Provision of banners, directionN markers; etc.
o Paying for a stuff person to coordinate DOwntown activities
o Coordination of business, City and community interests
o Provision of business information, markeing materials and maps to higNight
Downtown businesses
DISCUSSION
Dowmown Palo ~dto has long been l~own as a thriving, d?mamic business district. To
the cre~i of many !ocal merchants, the success of the Do;~ntown has been a~ained ¯
through the efforts of volunteers such as those who participate in the Downtown
Marketing Committee of ~&e Palo Alto Chamber of Commerce. While the efforts of
these vo!unteers have made a positive in, pact on the area, it is clear that man?,
oppo~nmities to increase the viabiliD, of the Downtown are missed because business
CMR:436:03 Page 2 of 7
owners and operators cannot successfl.t]_ly run businesses and provide the marketing and
other sen~ices needed to strengthen the Downto~m. For "d~is reason, the Do-~mtown
Market~g Committee of the C ~ham. ~ber (Committee), representing both members and non-
members of the Chamber, identified the need for a Downtown BiD.
On December 2, 2002, the representatives of the Co,tree fom~ai!y presented a petition
signed by over fi0 downtown businesses during Ci~ Councit oral communications. The
petfiion requested that the City Council agendize the discussion of the Do~-ntown B!D
and consider passing a Resolution of Intention to Establish a Dm~-ntown BID at a
subsequent meeting.
On March 17. -00~, City Council appoLnted an Ad Hoc Aav~sow Commi~ee for the
BID. At the time of the appoflntmcnt., the ~oup was identified as an ad hoc committee to
explore the ~%asibi!it3~ of crea’d_nZ a BID and to make recommendations to ‘.die City
Council. The BID lave requires a formal Adviso~ Board to be established that wi!l
submit annual reports and recommendations to Cir~ Council.~.~m respect to the BD
assessment and expenditures. The BID !aw authorizes appointment of the Advisor7
Board prior to estabtist~.-nent of the B!D. As the Ad Hoc Committee has been mee*dng
re~alarly since March and has provided the leadersl~ip for this initiative, staff
recorr-m~ends that this committee be fonrmlized and named as the Advisory Board to
~.,~.~ e me ,annual repo!-ts and recormmendatmns to City Council on a Downtown BD.
In July and August of 2003, an intern was hired by the City to develop a database of
~ ~"-the BiD "busm~ located ~ ~ea. The totem wa~ed ~e dis~ct several ~es ~d
identified evew ad&ess ~d bus~ess in ~e dis~ct. Her ~d~gs supposed prior work
on ~e B!D database of bus~esses ~d resulted ~ ~e idenfificadon of 913 bus~esses.
To be ce~-tain *kat all businesses in the BID were fn_fo~--med and could become involved in
the planning of the BID, the Committee sent letters to each bush~ess owner in the
proposed area, identifying the proposed BD botmda~-ies, benefits of the BID, activities
that could be accomplished and an estimate of revenues that could be anticipated from ~e
collection of a downtown BID assessment. MulLfiple discussions at monthiy
Markeffng meetings and several additional meetin_~s were held to discuss the BID
Downtown Pa!o Alto wi~ affected merchant. Meeffngs were held on the foEowing
dates and times:
Aug-ust 21 8anl
August~.~$, 2002 6pro
September 18.. 2002 gain
CardLnal Hotel
Blue Chalk Care
Cardinal Hotel
September 18, 2012
_November 20, 2002
July 30.. 2003
@m
9am
Blue Chalk Care
Chamber Mixer @ Zibibbo Resta,~ant
Cardina! Hotel
For the meeting that was held on July 30, 2003, a flyer was taken to eveU business
within the proposed BID boundaries to irffo~’~n each business of the date, ff~,-ne and
location ..¯
~oz ~e business outreach meet~ ana invite them to ,~ ~~b.m~ any concertos or
comments for fur~&er consideration.
A_n additional business outreach mee ,ttng is scheduled for October 8, 2003 at 9:00 a_m at
the Cardinal Hotel to once again hem any comments and answer any questions
concerning the proposed BID.
A noticed public meeting set and attended by the City Council is adso requL-ed according
to BID law. The attached resolution sets the public meetin~ to hear comments on the
proposed establis"t:cnent of a BID on October 27, 2003. Following the public mee ~ting,
City Council may approve the repor~ of the Adviso~ Board and may consider adopting a
~esolution of Intention to Establish a Business Improvement District.
The Resolution of Intention to Establish a Downto;.’n BID must include .the foilowing:
¯Description of the boundmJes ofhhe m-ea and identiilcation of any separate benefit
zones.
¯Name of the proposed mea.
~Type or b~es of:
assessments.
Statement that, except where ~nds
levied ~uaHv to pa~ £or ~1 ~p=ovem~nts ~d ac~vi~s ~ ~e ~-~a.
¯ . Identmca~mn of ~e proposed me~o~ ~d basis
su~ScJ~nt d~tail to ~low ~ach b~ess owner to ~s~at~ ~e ~o~t of th~
assessment to be levied ag~st Ms~r bus~ss.
Detestation of whe~er new bus~esses will be exempt from ~e lew of the
assessment for a period not to exceed one ye~ from ~e date ~e business
co~enced opera.g, p~su~t to S~ee~ and Highways Code Section 36531.
If the City Council chooses to adopt the Resolu~on of Intention, the following actions
must be tM<en:
C1\Q<:436:03 Page 4 of 7
A public hearing (noticed according to BID law) must be held not less than 20 or
more than 30 days after the adoption of the resolution of intention. (The auached
resolution would set this hearing for November 17, 2003).
At the hearb~g, the City Counci! must consider the testimony of a!l interested
persons for ~d against the establisb_ment of the BID, the extent of the area within
the BiD, and on the fimfishing of specified )-pes of improvements or activities by
the BiD.
.amy interested person may make protests orally or in Writing. Wri~en protests
must be flied with the Ci~ Clerk at or before the time fixed for the public hearing.
If aMtten protests to the establislxnent of a BiD are received fi-om the o,a~ers of
businesses in the proposed area, which wN pay 50% or more of the total BID
assessment, no further proceedings to create the business improvement area or to
Ie~%: the proposed assessment sha!! be considered .r%r at least a year.
At the conclusion of the punic hea_~mg to establish the BID, the Cilt, Counci! may
adopt, revise, change, reduce or modify the proposed assessment or the
",~Lm. provements and activities proposed.
If the Cib~ Co,ancil, following the public hearing, decides to establish t_he BID, it
wilI adopt an or~-----------------dnance to that = " ~"e~xect. The or ~dinance will contain m~ormat~on
required by BiD law including the manner of co!lection and Iev-), of assessments.
in subsequent ?,ears the A&4soD~ Board wi!l file an annual report m "aking
recon~endations on the following:
o Expenditure of revenues derived from the leKy of assessments
o Classification ofbnsinesses
o Method and basis of le~5~ing assessments
-The a~ached resolution sets the place and time for the public hearing 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 o’a~ners against the establishment of a B!D, the extent of the
area and activities proposed shalI be described.
RESOURCE IMPACT
_¢r5 providedThe Economic Development Division ~n the Ci~ M nanager’s O_nce has staff
support to the Advisov Committee. Economic Development staff have overseen the
crea~on of a business database and cross referenced it with Reference USA, an elecn-oNc
database, to ensure that aS downtown businesses within the BID boundm-ies are
identified. In addition, staff have assisted in the preparation of the budget identifying
proposed B!D activities, prepared a comprehensive reference bootdet for disn-ibution to
C1~<[R:436:03 Page 5 of 7
busin, esses and worked with a consultant to develop the cost benefit analysis and
assessment r%~-mula for BID .assessments. Staff will also prepare and mail individual
notices to each business located in the BiD prior to the public meeting.
The City Attorney’s office has provided lega! oversight and direction regm-ding the
noticing and schedttling of required BID ac~ons.
There m-e sf~ll a number of issues to be resolved bet%re a Dovmtown BID could become
operational. For example, since ~e City collects the assessment, impacts to the
A ~dministrative Sen,.-ices Depmm:nent must be considered. The City of Palo Aho does not
have a business Hcense tax, so there was not an existing database available for ~e
colIection of BID assessments. Now that the City has created a database of dovmtovm
businesses, a methodolo~, for the co!lection of the BID assessments must be deve!oped.
City staff from affected depm-tments will reconci!e these issues, gauge impacts to City
reso~ces and make recommendations to the City Council. These impacts and
recomamenda~ons wit1 be a pat of the staff" report to City Council at the time of the
Dox~ntown B!D pub,~c hearamg. BID law provmes that costs for the establishment of ~h~
BID may be recouped. Staff has not made a recommendation regarding the
reLmbursement of costs that t~he City has incuTed. This will be discussed in more detail
at the time of the Public Hearing.
The establist:a~ent of a Downtown BID is consistent with Comprehensive Pt~ Policies
~.~md was a pa~-t of the recommendations for Dov, mtovm Palo .Qto identified in the ~" ~ ’
Strateg-y for the City ofPalo .Qto prepared by Sedway and Associates in June 2000.
The establishment of a BID supports the i%!iowing Comprehensive Plan Policies:
Polfc.v B-4 Nm-ture and suppo,-t established businesses as well as new businesses
P~’o~’a~ B-I Initiate assessment dist,ficts or o*_.her progs.ms to facilitate neighborhood
shopping center improvements such as landscaping, parking and access to public
nansportation.
Polfc.v ~-77 Encourage the use of public/private parmerships as a means of redeveloping
and revitalizing seiected areas.
Poh:o~ B-20 Support and enhance the U~iversity Avenue/Downtown area as a vital mixed
use area containing retail, persona! service, of-flee, restaurant, and entertainment uses.
Reco~e the importance of an appropriate retail mix, including small local businesses,
to the continued vitality of Downtown.
Ch’~:436:03 Page 6 of 7
7Jars action by the City. Council is not considered a project under ~e Ciifomia
Environment Qualiq! Act.
PREP,~_ED BY:
Sv[an Arpan, ~conom]~ Developmen: _Manager
CITY M_~Q<-~GER _41. _<0¥ AL:
.~ HanJson, Assistant Ci~ Manazer
Ch’iR:436:03 Page 7 of 7
P~ESOLUTI ON _NO.
.RESOLUTION OF THE COUNCIL OF THE CITY OF P.~.L0 ~_~,TO
~b~O!NTiNG -~N .~_DV! SORY BO~RD., DiP~ECTiNG THE
PP~EP~C~TION OF A REPORT FOR r I~C:-", "I~.%_R 2003-2004,
AATD Di_R_ECT!NG T~T NOTICE ~__.m~ Gi~!q OF A PUBLIC
!:~.~Tmlg~ .~_bnO PUBLIC HE~uRiNG IN CO!~NECTION WITH Tns
PROPOSED ~:S.~_B,_,±SH/~ENT OF THE DO¼qqTOWN BUSINESS
IHPRO\~__~NT DISTRICT .~_\~D THE PROPOSED LE\~ OF ~_N
ASSESS!~--/NT AGAINST BUSI!TESSES WITHIN SUCH DISTRICT
W~EP=~EAS, the City of Pa!o Alto (the "City") is a charter
city organized and existing under the laws of the State of
California; and
v~nsREAS mz is in the public interes~ 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
Lq{EP~AS, 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 9~ea for the purpose of providing improvements
and promoting activities within a business district and may levy ~n
assessment against businesses within a Parking and Business
improvement Area to fund improvements ~nd activities; and
[%q~EPSAS dommtow~ business m~rch=n~s have been exqp!oring
~-sibil ~~ .........~ district~= pos ity of a ~"-iness ....~ .......e
Palo Alto; and
~EREAS, the City has received a petition signed by the
owners or authorized representatives of over fifty downto%~
businesses requesting that the City initiate proceedings for the
_m~_ ov~m~n ~ .__z orfo_~mataon of a Parking and Business 7 F~ = = ~ ~.rea the
do%~to%~_ area; and
~n--i~-~Ab, the City wishes to initiate proceedings for the
Imp_ovemenu ~r=a 9or the=orm~ion of a Parking and Business
area pursuant to the Law; and
030-917 syn 0100126
I,TiEP~AS, the Law re_cuires the City Counci! to appoint an
adviso~r board which shall make recomm=_ndations to the City Counci!
on the e~-~endizure of revenues derived from the !e~ of
assessments, on the classification of businesses, as applicable,
and on the method and basis of !etching the assessments; and
],Z~EREAS, on Harch 17, 2003, the City Counci! appointed a
Do’~m_tov~ BiD Ad Hoc Committee to review options and make
recommendations to the City Counci! in cos=nection with a proposed
Business !~Drovement Area for the domm.to%~ area;
NOW,
as fol!ows:
the Co~nci! of the City of Pa!o A!zo does
SECTION !. The Co~ncii hereby appoints the Do~to~m BID Ad
Hoc Committee to ser<,e as the advisory board for the proposed
Do%0~m_to~,~ Business improvement District (the "District" pursuam.t to
Section 36530 of the Law (the "Advisory Board").
SsCT!ON 2.~h= Counci~ hereby ~: ~ ~~ -. ....~=recus uhe Advisory Board
_"~w=uh Sectionto prepare and fi~e w~zn the City C!erk] in accordance -~
36533 of the Law a report for fiscal year 2003-2004 in cor~nection
with the proposed estab!isbzment of the District.
SECTION 3. The Co-~-±ci! hereby sets October 27, 2003 as the
date for a public meeting on the estabiisb_ment of the District and
the !e~ of assessments and November 17, 2003 as the date for a
public hearing on the estab!isb~ment of the District ~nd the le~Ty of
assessments. Both the public meeting and the public hearinz wil!
be held at 7:00 p.m., or as soon thereafter as practic-c~!e, in the
City Council Chambers at 250 H~miiton Avenue, Pa!o Alto,
California.
SECTION 4. The City Clerk is directed to give notice of
the public meetin~ and the public hearing as req@ired by law.
//
//
//
//
//
//
//
//
030917 syn 0100126
2
S~,CT,-ON 5 The Counci7 finds that this is not a project
under the California ~v~o.nm=~,ta] Oua!itv ~ ~,............ .~.c~ and therefore, no
enviro_~_menta! impact assessment is necessary.
INTRODUCED .’A_b’-D PASSED :
AYES :
!qOES :
_~_BS ENT :
~STE~i~Ti ONS :
ATTEST :AP PRO\,-ED :
City Clerk
APPR0\~.-ED AS TO FOP!~ :
Senior Asst. City Attorney
l~ayor
City Manager
Director of A~ministrative
Services
030917 syn 0100126
ATTACHM_ENT 2
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO AMENDING RESOLUTION NO. 8339, APPOINTING AN
ADVISORY BOARD,DIRECTING THE PREPARATION OF
A REPORT FOR FISCAL YEAR 2003-2004, AND
DIRECTING T_~LAT 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 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 for the purpose of providing
improvements and promoting activities within a business district
and may levy an assessment against businesses within a Parking
and Buslne~ ~LLp~Ov~LL~I~ Area to fund improvements and
activities; and
WHEREAS, downtown business merchants have been exploring
the possibility of a business improvement district for downtown
Pa!o 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
downtow: area; and
WHEREAS, the City wishes to initiate proceedings for the
formation of a Parking and Business improvement Area for the
downtown area pursuant to the Law; and
WHEREAS, the Law requires the City. Council_ to =Dpo!nu-_ ’ ~ an
advisor,~s board which shall make recommendations to the City
Counci! on the expenditure of revenues derived from the levy of
031001 sm 0100135
assessments, on the classification of businesses, as applicable,
and on the method and basis o{ levying the assessments; and
WHEREAS, on March 17, 2003, the City Council appointed a
Downtown BID Ad Hoc Committee to review options and make
recommendations to the City Council in connection witha
proposed Business Improvement Area for the downtown area; and
WHEREAS, on September 22, 2003, the City Council adopted
Resolution No. 8339, appointing the Downtown BID AD Hoc
Committee to serve as the advisory board forthe proposed
Downtown Business Improvement District (the "District"),
directing the advisory board to prepare and filea report for
fisca! year 2003-04, and setting a public meeting and public
hearing on the establishment of the District and the levy of
assessments; and
WHEREAS, the City Council requested that the advisory
board make a recommendation to the City Counci! regarding the
addition of members to the advisory board to include greater
representation from the professional business category; and
WHEREAS, the advisory board met on October !, 2003 and
took action to recommend that the City Counci! appoint Victoria
S. Lukanovich, Jim Ma!iksi and Beth Rosentha! as members of the
advisory board; and
WHEREAS, staff recommends, in order to allow sufficient
time for new members o{ the advisory board to provide input
regarding the proposed District, that the public hearing on the
NOW, _HsRs~ORE the Council of the City of Palo Alto
does RESOLVE as follows:
SECTION !. Section I of Resolution No. 8339 is hereby
amended to read as fol!ows:
"SECTION !. The Council hereby appoints the members of
the Downtown BID Ad Hoc Committee, as identified in
attachment A to this Resolution, together with Victoria
S. Lukanovich, Jim Ma!iksi and Beth Rosenthai to serve
as the advisory board for the proposed Downtown Business
imorovement District (the u_~_mc~ ) pursuant to
Section 36530 of the Law (the "Advisory Board"). The
Downtown BID Advisory Board shall be limited to a
membership of fifteen members."
031001 sm 0100135 2
SECTION 2. Section 3 of Resolution No. 8339 is hereby
amended to read as fol!ows:
"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, }~’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 public
hearing wil! 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 finds that this is not a project
under the California Environmenta! Quality Act and, therefore,
no environmenta! impact assessment is necessary.
INTRODUCED AND ~A~SED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
Citv Attorney City Manager
Director of .~dmin!sar=~ive
Services
031001 sm0100135 3
ATTACItMENT "A"
Downtown Business Improvement 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
Caf~ Niebaum Coppola
Spago’s
Bell’s Books
Palo Alto Chamber of Commerce
Alain Pinel Realtors
Garden Court Hote!
Attachment 3C
City of Palo Alto
City Manager’s Report
13
TO:HONORABLE CITY COUNCIL
FROM:
DATE:
CITY MANAGER
October 27, 2003
DEPARTMENT: City Manager
CMR:481:03
SUBJECT:RECOMMENDATION TO CITY COUNCIL TO ACCEPT THE
REPORT ~ND 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 ~’~- -~- "~,,u uom~r-mmg 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.
BACKGROUND
Downtown merchants have been exploring the possibility of a BID for Downtown Palo
Alto. T’ne 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 ofbarmers, directional markers, etc.
Paying for a staff person 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
~t ulc um~ of the appointment, the group was identified as an ad hoc committee 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 ievying 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 heating, 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 wri~en 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.
A~’ " ~’^ul~ conclusion of the pt~blic 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 wi!! contain info..~-rnation
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
,~.,_, was a partut m~ recommendations for Downtown Paio 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 we!! as new businesses.
Program B-1 - Initiate assessment districts or other pro~ams 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.
Poli0, 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. Recognize the importance of an appropriate retail mix,. including small local
businesses, to the continued vitality of Downtown.
CMR:481:03 Page 5 of 6
ENW1RONMENTAL REVIEW
This action by the City
Environment Quality Act.
ATTACHMENTS
Council 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 APPROV .
EMIL-~f:IARRIS ON
Assistant City Manager
CMR:481:03 Page 6 of 6
ATTACHMENT1
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
October 20, 2003
Boa rd on
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 amountof 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,_,~,,~-’-’"~ 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
Paio 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 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 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 B!D Boundaries and benefit zones is available in
Attachment 1 of this report.
Section 2: 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.
The total funds available for activities for this fiscal year are
estimated to be $101,000. 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.
It 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 charged by total rooms.
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.
Except where otherwise defined, all terms shall have the
meanings identified below:
Definitions of Business "l’_~_ es
Improvement 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 Lodqinq: 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
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
~wper Street
|
The City of
Palo Alto
Proposed
Downtown Palo Alto
Business Improvement District
This map is a product of the
City of Palo Alto GIS
Attachment 2
Proposed BID Budget
January 1-June 30, 2004
Marketing and Promotions
Business Directory, conceptual
development of directional signs,
special events planning
Graphic Design (logo design,
banner design, branding, ad designs,
Website)
Banners and hardware (1 time)
Beautification (Planning for signage,
enhanced tree lighting
and seasonal planting)
$12,000
$ 8,000
$18,000
$12,000
Operations
Staff (Salary for six months, incl. Benefits)S27,500
Printing, supplies
Mailing ($370 x 6)
Phone
Travel
One *~^ ~’~ ........~u~ (~,,,,~ ~=, L-uw co~T, puter,
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
$I01,000
*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:
!00% 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. 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
e, ,,,,,, no less than u~u i~=~’son 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_cl_qested 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) (5o%)
$250.00 (4 to under 7 FTE employees) (75%)
$340.00 (7+ FTE employees) (lOO%)
$130.00
$190.00
$250.00
Professional
Businesses
(50%)
$170.00 (Under 5 FTE employees) (75%)
$225.00 (5+ FTE employees) (lOO%)
$130.00
$170.00
Lodging
Businesses
~ ~ ~.,/uI
$225.00 (up to 20 rooms) (5o%)
$450.00 (41+ rooms) (lOO%)
$170.00
$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 2
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
Ca!2fornia; 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
~HsREAS, 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 r-mr÷~np_o ~ ....g activities within a PBIA
-w_~hi., a PBIA toand may levy an assessment against businesses -~ ,n
~_~i~ i.~Lprove~Lents~u-- -~ act~_v~_t~_es; and
WHEREAS, downtown businesses have been exploring the
possibility of a PBIA for downtown Pa!o 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 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 Council (i) appointed an
Advisory Board (the "Advisory Board") for the proposed Downtown
Palo Alto Business improvement District, a proposed PB!A, (ii)
directed the preparation of a report by the Advisory Board
pursuant to Section 36533(b) of the Law; and, (iii) set the time
and place for a public meeting and public hearing to receive
testimony on the proposed est~b!ishment of the Downtown Business
improvement District and the proposed assessmen<; 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 Pa!o 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
Pa!o Alto Business Improvement District (the "District") and to
levy and collect an assessment against businesses within the
District for Fisca! Year 2003-2004 (July !, 2003 through June
30, 2004). Such assessment shal! be in addition to any other
assessments, fees, charges or taxes imposed by the City.
SECTION 2. The boundaries of the District are within
th~ City limits of the City of Pa!o Alto (the "City~) and
encompass the greater downtown area of the City, generally
extending from E1 Camino Rea! 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 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 improvements to be funded by
the levy of an assessment against businesses within the District
are the acquisition, construction, installation or maintenance
o{ any tangible property with an estimated useful life of five
years or more. The types of activities to be funded by the levy
o{ 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 ~u<n~shing of music in any mubl~c place in the D_s<rlc~; and
activities which benefit businesses located and operating in the
District. No improvements are proposed to be funded in Fisca!
Year 2003-04. Reference is made to the Report for a description
o{ the activities to be funded by the District in Fisca! Year
2003-04.
/!
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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
Fisca! 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 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 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 all businesses not located in Zone A. in addition, al!
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 fisca! year shal! be exempt from the
levy of the assessment for that fisca! year. In addition, non-
profit organizations and newspapers in the District shal! be
exempt from the assessment.
SECTION 7. On October 27, 2@@3, the City Council held
a noticed Public Heeting regarding the establishment of the
District and the levy of the assessment against businesses
located in the District. At the Public Heeting, a!! 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! Cha.mbers at 250 Hamilton
Avenue, Pa!o 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
031020 sm 0100142 3
types of improvements and ac<!v_~ies by the District for the
Fisca! 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
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 officia! 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 wil! 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 wil! pay 50 percent or more of the Assessment
-~ ~v-~ ~Ci di!L] _propos to be .....Drotests are not w!nn@rawn so as to
reduce the r = ~_ _.p_o~es~s to less than that 50 mercent (i.e , there is
a majority protest) , no further proceedings to create the
District, or to levy the assessment, as described in this
Resolution, shal! be taken for a period of one year from the
date of the {inding of a majority protest by the City Counci!.
if the majority protest is only against the furnishing
of a smecified 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.
031020 sm 0100142 4
SECTION !0. The Council finds that this is not a
project under the California Environmental Quality Act and,
therefore, no environmenta! impact assessment is necessary.
INTRODUCED AND PASSED:
~YES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
City Attorney City Manager
Director of A~ministrative
Services
031020 sm 0100142 5
EXHIBIT "A"
_ Emerson
Downtown Palo Alto Business Improvement District
Annual Assessment
Retailers
and
Restaurants
(ioo~)
ZONE A ZONE B
( 75 ~)
S225.00 (Under 6 FTE emp!oyees) (50%)$170.00
$340.00 (6 to under !! FTE employees)(75%)$250.00
$450.00 (!!+ FTE emp!oyees) (100%)$340.00
Service
Businesses $170.00 (Under 4 FTE employees) (50%) $130.00
$250.00 (4 to under 7 FTE employees) (75%) $190.00
$340.00 (7+ FTE employees) (100%) $250.00
Professional
Businesses
(50%)
$170.00 (Under 5 FTE employees) (75%)
$225.00 (5+ FTE employees) (100%)
$130.00
$170.00
Lodging
Businesses
(lOO%)
$225.00 (up to 20 rooms) (50%)
$340.00 (21 to 40 rooms) (75%)
$450.00 (41+ rooms) (100%)
$170.00
$250.00
$340.00
Financial
Institutions $500.00 $500.00
Note I: For retail, restaurant, service, and professional
businesses size wil! be determined by number of emp!oyees either
ful!-time or equivalent (FTE) made up of multiples of part-time
emp!oyees. Lodging businesses will be charged by number of
rooms available. Ful!-time emp!oyees are those working a tota!
of 2,000 hours per year. Part-time emm!oyees are grouped into
ful!-time job positions, i.e., two half-time emp!oyees tota! one
ful!-time.
Note 2: Second f!oor (and higher) businesses !ocated within Zone
A wil! be assessed the same as similar street-leve! businesses
!ocated within Zone B.
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Note 3: Assessment amounts are
dollars.
rounded to the nearest ten
Note 4: Retailers and Restaurants include: Businesses that
buy or resell goods such as clothing stores, shoe stores, office
supplies as wel! 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, trave! 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,
doctors, accountants, optometrists, realtors, insurance brokers,
venture capita! firms, consultants, advertising and marketing
professionals and mortgage brokers and simi!ar professions.
Financial institutions include:
institutions and credit unions.
Banking, savings and loan
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