CITY COUNCIL NEW BUSINESS MAY 18, 2015

Transcription

1 CITY COUNCIL NEW BUSINESS MAY 18, 2015 SUBJECT: CONSIDERATION OF THE ANNUAL REPORT OF THE ADVISORY BOARD TO THE SUNSET STRIP BUSINESS IMPROVEMENT DISTRICT AND ADOPTION OF A RESOLUTION OF INTENTION TO LEVY AN ASSESSMENT FOR THE FISCAL YEAR INITIATED BY: CITY MANAGER'S DEPARTMENT - ARTS AND ECONOMIC DEVELOPMENT DIVISION (Paul Arevalo, City Manage~ (Maribel Louie, Arts and Economic Development ~ager~l2'c>...,,v( L (Laura Minnich, Economic Development Analyst)e/' F- STATEMENT ON THE SUBJECT: The City Council will initiate preliminary proceedings regarding the Sunset Strip Business Improvement District's operations, including consideration of approval of the annual report of the Advisory Board to the Sunset Strip Business Improvement District and adoption of a resolution of intention to levy an assessment for fiscal year and scheduling a public hearing for June 1, RECOMMENDATIONS: 1. Adopt Resolution No. 15 -, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST HOLLYWOOD APPROVING THE ANNUAL REPORT OF THE ADVISORY BOARD TO THE SUNSET STRIP BUSINESS IMPROVEMENT DISTRICT, DECLARING ITS INTENTION TO LEVY AN ASSESSMENT AGAINST BUSINESSES WITHIN THE SUNSET STRIP BUSINESS IMPROVEMENT DISTRICT FOR FISCAL YEAR , AND SETTING A TIME AND PLACE FOR PUBLIC HEARING" (Attachment B); 2. Direct staff to notice a public hearing to be held on June 1, 2015 to hear protests or objections to the District's proposed assessment and activities for fiscal year BACKGROUND ANALYSIS: On February 4, 2002, the City Council approved the formation of the Sunset Strip Business Improvement District (District). The Sunset Strip (The Strip) stretches 1.6 miles through the heart of the City of West Hollywood from Doheny Road on the west to Havenhurst Drive on the east. The Strip is an iconic locale where fashion, music, architecture, and a unique history have combined over the years. The Sunset Strip Business Association (SSBA) serves as the Advisory Board for the District. AGENDA ITEM 5 c

2 Page 2 of 5 While historically, the focus of the District has been on improving safety and cleanliness along The Strip, the formation ordinance for the District allows for the assessment funds to be used for the following improvements and activities: (a) The improvements that may be funded are the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more, including, but not limited to, the following: (i) parking facilities, (ii) benches, (iii) trash receptacles, (iv) street lighting, (v) decorations, (vi) parks, and (vii) fountains. (b) The activities that may be funded are the: (i) promotion of public events which benefit businesses in the District and which take place on or in public places within the District, (ii) furnishing of music in any public place in the District, (iii) promotion of tourism within the District, and (iv) activities which benefit businesses located in and operating in the District. Annual Levy of Assessment and Approval of Proposed Activities and Improvements Prior to the start of each fiscal year, the activities of the District and the revenue sources for those activities (assessments on businesses in the District and sponsorship funds) must be approved by the City Council. The annual renewal process includes Council's: 1. Receipt and approval of an Annual Report submitted by the District's Advisory Board (pursuant to Cal. Streets & Highways Code 36533, the Annual Report includes a summary of the prior year's activities and proposed activities and budget for the upcoming year); 2. Adoption of a Resolution of Intention to levy an assessment in the upcoming fiscal year to fund the activities detailed in the Annual Report and scheduling a public hearing; 3. Holding a public hearing (in this case, June 1, 2015) at which protests against the District, including its proposed activities, may be heard; and 4. If a majority protest is not made during the public hearing, adoption of a resolution granting final approval of the Annual Report, including any changes ordered by Council, and levying the assessment for the upcoming fiscal year. In accordance with the Parking and Business Improvement Area Law of 1989 (Cal. Streets & Highways Code et. seq.,), the Advisory Board submits an Annual Report to the City on May 1 of each year outlining any proposed changes to the District's boundaries or assessments, summarizing prior year activities and laying out a proposed work program and budget for the upcoming fiscal year. The City Council must approve the Annual Report before adopting a Resolution of Intention to approve the proposed work program and levy the assessment in the upcoming fiscal year. Approval of the work program and assessment is not final until a resolution is adopted upon the conclusion of a public hearing on the matter.

3 Page 3 of 5 Public Hearing During the public hearing, interested persons may protest any aspect of the District's reestablishment for fiscal year , including its boundaries, assessments and proposed activities. Protests may be made orally or in writing. If the City receives written protests from the owners of businesses which will pay 50 percent or more of the proposed assessment ("majority protest"), the District's activities and assessment cannot be approved for the upcoming fiscal year. If a majority protest is not received during the public hearing on June 1, 2015, Council may upon the conclusion of the public hearing either: (a) approve the Annual Report as filed by the Advisory Board or (b) order changes in any of the matters provided in the Annual Report, including the proposed assessments and the activities to be funded with the assessments, and approve the report as modified. During the proceedings, City Council may also consider changes to the Advisory Board. During the fiscal year, staff has received comments from the business community expressing concern regarding the recent addition to the Advisory Board of business owners that are not subject the assessment. Annual Report The Sunset Strip Business Improvement District's Annual Report, as submitted by the District's Advisory Board, is included as Attachment A. The proposed Advisory Board is listed on page 2. The report lists the assessment structure, which has not changed since the formation of the District in As part of the work program, the Advisory Board plans to review the assessment structure and explore opportunities to expand the District or revise the assessment structure. The sections in the Annual Report reporting on fiscal year can be found on pages 5-15; and the proposed work program and budget for can be found on pages The requested cash support from the City of West Hollywood may be found on page 17. The District has also provided the Program of Work Amendment for review, which includes revenue received from sponsorship outside of the assessment revenue (Attachment C). New activities proposed in the District for the fiscal year include daytime security ambassador service along The Strip, enhanced street cleaning/maintenance, Taste of the Sunset Strip, Sunset Strip Market - compressed timeframe, and website enhancements. During the fiscal year, The District welcomed several new businesses including Blind Dragon, Boxwood at the London, Poke Bar, Fork Food & Restaurant, Sunset Plaza Florist, Bar 20, and Wildfox Retail. Jack Daniel's continued its sponsorship as the sole banner sponsor for the street pole banners along Sunset Boulevard through June 2015 generating net revenue of $290,000 for the District. Request for City Support for Fiscal Year The District is requesting $140,000 in direct cash support for its work plan (Includes $108,000 for adding daytime security ambassador presence; $20,000 for increased maintenance/cleaning; and $12,000 for the Sunset Strip Market) in addition to fee waivers which City Council may approve at the June 1, 2015 public hearing. Any

4 Page 4 of 5 approved fee waivers or cash support will need to be added to the City of West Hollywood fiscal year budget. Financial Position of the District As of February 2015, the financial position of the District was $1.3 million in total liabilities, including the debt owed on the Sunset Strip Music Festival (SSMF). In fiscal year , the District will again end the year with negative total net assets. During the fiscal year, the District incurred significant losses on the Sunset Strip Music Festival. The 2014 SSMF lost approximately $1 million. The District serves as the managing partner of the SSMF, LLC. Over the past several years, SSMF has received several loans from the District as well as borrowed funds from a private lender to cover expenses. At the April 2015 District Board Meeting, the February 2015 financials were presented and adopted by the Advisory Board. The adopted financials reflected over $500,000 in outstanding debt owed to the District from SSMF. Repayment by SSMF of the loans from the District was not addressed in the submitted Annual Report. The Executive Director shared that discussions are being held with potential partners to address the SSMF debt and financial/liability responsibility for future Sunset Strip Music Festivals. For the fiscal year, the District will receive assessment revenue based on actual funds collected from businesses. The District will continue to work with local businesses and the City of West Hollywood to maximize assessment revenue collection and minimize the number of delinquent rate payers. CONFORMANCE WITH VISION 2020 AND THE GOALS OF THE WEST HOLLYWOOD GENERAL PLAN: This item is consistent with the Ongoing Strategic Program of: Promote Economic Development while maintaining Business Vitality and Diversity This item is also consistent with the following goal of the West Hollywood General Plan: ED-3.10: As feasible, support existing businesses by providing for the creation and enhancement of Business Improvement Districts. ED-7: Enhance the City as a regional, national and international destination for the entertainment, nightlife, dining and retail industries that are key to West Hollywood's fiscal health. LU-15: Maintain Sunset Boulevard as a regional, national, and international destination for entertainment, and the primary economic engine of the City. EVALUATION:

5 Page 5 of 5 Staff will monitor and review the progress of the District toward completion of its annual work plan goals through receipt of a semi-annual report and attendance at monthly board meetings. ENVIRONMENTAL SUSTAINABILITY & HEAL TH: NA OFFICE OF PRIMARY RESPONSIBILITY: City Manager's Department - Arts & Economic Development Division FISCAL IMPACT: The fiscal impact to the City of renewing the Sunset Strip Business Improvement District is approximately $3,000 in staff time for cost of billing the annual assessment, collecting and processing the payments and enforcing any penalties for non-payment. Any collection agency-related costs will be off-set against late assessments received. The District is requesting $140,000 in direct cash support for its work plan (Includes $108,000 for adding daytime security ambassador presence; $20,000 for increased maintenance/cleaning; and $12,000 for the Sunset Strip Market) in addition to fee waivers which City Council may approve at the June 1, 2015 public hearing. Any approved fee waivers or cash support will need to be added to the City of West Hollywood fiscal year budget. ATTACHMENTS: Attachment A - Sunset Strip Business Improvement District Annual Report including Program of Work for Attachment B -Resolution Approving the District's Annual Report and Declaring City Council's Intention to Levy an Assessment for the fiscal year Attachment C - Sunset Strip Program of Work Amendment for