To begin the annual assessment process for the Novato Business Improvement District in a partnership with the Downtown Novato Business Association.
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1 STAFF REPORT MEETING DATE: October 29, 2013 TO: City Council 75 Rowland Way #200 Novato, CA (415) FAX (415) FROM: SUBJECT: Peggy Flynn, Public Communications Coordinator Cathy Capriola, Assistant City Manager DOWNTOWN NOVATO BUSINESS IMPROVEMENT DISTRICT ANNUAL RENEWAL FOR THE 2014 CALENDAR YEAR -- RESOLUTION OF INTENTION TO LEVY AN ANNUAL ASSESSMENT AND SET PUBLIC HEARING FOR NOVEMBER 12, 2013 REQUEST To begin the annual assessment process for the Novato Business Improvement District in a partnership with the Downtown Novato Business Association. RECOMMENDATION A. Review and approve an Annual Report and Budget for the Downtown Novato Business Improvement District (BID) for calendar year B. Adopt Resolution of Intention to Levy an Annual Assessment and set a public hearing for November 12, DISCUSSION In 1989, the State Legislature passed legislation called the Parking and Business Improvement Area Law of This legislation was based on the finding that businesses located and operating within the business districts of this state's communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. The Legislature also found that assessments levied for the purpose of providing improvement and promoting activities which benefit individual businesses may also benefit the property within the area directly or indirectly and that those assessments are not taxes for the general benefit of a city, but are assessments for the improvements and activities which confer special benefits upon the businesses for which the improvements and activities are provided. Based on this background, law was passed and codified as Section of the California Streets and CC13_171.docx; 10/24/ Novato City Council Agenda Staff Report Date: File No. Page 1
2 Highways which outlines implementation details for the creation and annual processing of business improvement districts. Novato s Downtown Business Improvement District In 1999, a group of merchants (the BID Formation Committee) worked with the City to create the Business Improvement District. The goal was to attract more business Downtown and enhance the customer and visitor experience. The BID was seen as an important part of the continued revitalization of Downtown Novato. In partnership with the merchants, the Novato City Council formed the Novato Downtown Business Improvement District (BID) in 1999 which was incorporated into the Novato Municipal Code as Section 2-25 Downtown Novato Business Improvement District. The Municipal Code allows the City and the BID Board of Directors to establish agreements for the administration of the district. This is a typical structure used by cities across the nation. Since 1999, the City Council has contracted with the Downtown Novato Business Association (DNBA) to serve as the BID advisory board and to administer and manage BID activities and funding since the creation of the BID (Agreement #3929). The DNBA is a non-profit organization with a volunteer Board of Directors and no paid staff. It has adopted bylaws to govern the DNBA Board activities and functions. BID Boundaries and Assessment There are approximately 400 businesses in the BID which self-assess an annual fee that generates up to $58,000 for the purposes of enhancing the downtown including advertising, marketing, improvements, and promotions. In 2005, the BID fee was increased by five percent and the BID boundary was expanded to include the two retail centers at Seventh and Grant Avenues (Lucky's and DMV centers), northward along Redwood Avenue from Vallejo Avenue to Golden Gate Place (Trader Joe's and Atherton Ranch commercial areas), and eastward the area around Whole Foods was changed from a Zone B to a Zone A. Exhibit A shows the boundaries of the BID with Zone A and B. The current total anticipated BID assessment for the 2013 calendar year is approximately $50,000. As shown below and on Exhibit B, the assessment schedule is as follows: Type of Business Benefit Assessment Zone A Zone B Retailers/Restaurants 1-3 Employees $158 $ Employees $263 $ Employees $368 $184 Service Businesses $158 $79 Professional Businesses $131 $65 Financial Institutions $525 $525 Lodging (Bed and Breakfast) $158 $158 Lodging (Hotels and Motels) $263 $263 2 Page 2
3 Annual Assessment Process As part of the annual renewal process for the BID, the BID Board is required to prepare an annual report each year on or before November 1. The annual report includes a detailed budget, summary of accomplishments and proposed work plan for the coming year. This report is for the calendar year in which assessments are to be levied (2014) and collected to pay the costs of the improvements and activities described in the report. For this BID, the DNBA prepares the annual report and serves as the DBID Advisory Board. Below is the established annual assessment process for the BID which requires City actions-- including two City Council meetings, legislative actions by the Council, and public and member notification. 1 st Council Meeting (October 29, 2013) Approval of Resolution of Intention to Levy o Review of the BID annual report (includes budget and work plan) o Approval of Annual Report o Adopt Resolution of Intention to Levy an Annual Assessment Public Notice and Member Mailing o Mailing to each member of the DBID (at least 7 days prior to the public hearing) with materials including: cover letter from DNBA, Annual Report, Budget, Assessment Amounts, BID Map, and Resolution of Intention to Levy an Annual Assessment; inform members about the public hearing at the 2 nd Council Meeting o Publish Resolution of Intention to Levy an Annual Assessment in the newspaper (at least 7 days prior to the public hearing); 2 nd Council Meeting (November 12, 2013) Public Hearing o Public hearing on the Annual Assessment o Council action on Resolution Confirming the Annual Report (approves the levy of assessments) After the assessments are approved, City Finance staff incorporates the BID levies into the business licenses bills which are distributed in mid-november to all members Annual BID Report Each year, City staff works with DNBA to review the process, timeline and information needed for the annual assessment process outlined above. This year, the DNBA, acting as the DBID Board of Directors, approved the 2013 Annual BID Report which was submitted to the City (Exhibit C). In the cover letter to the 2013 Annual BID Report and budget, the DNBA Board is recommending a member outreach program and a commitment to collect ideas and feedback from members. The Board recommends that funds for various programmatic elements including marketing and beautification will be expended only after outreach has occurred. Staff Recommendation Throughout this partnership, the City has supported the activities of the DNBA and its management of the DBID, and has provided oversight without extensive intrusion into and control over the daily management of the DBID. During the past few years, we have heard 3 Page 3
4 growing concerns over the management of the DBID and requests for more oversight by the City. The DNBA also acknowledges the need for greater outreach and consistent communication to their members, as outlined in their cover letter. Staff believes that the original intent of the BID in 1999 is still valid and integral to the economic health of Downtown. To address these concerns, staff recommends the forging of a stronger partnership among the City, DNBA, and merchants with more active involvement by the City to manage the DBID over the next year. The goal is to strengthen the management and effectiveness of the DBID and to support the DNBA and its members. During the next year, the City Manager recommends that City staff work with the DNBA and the DBID members to achieve that goal, which will include: 1. increasing outreach, dialogue and communication with members, 2. increasing transparency and administrative efficiency and effectiveness, 3. developing a multi-year DBID budget and work plan, 4. increasing member involvement in the management of the BID and the DNBA, and 5. updating the current Memorandum of Understanding agreement between the DNBA and the City. Specifically for the 2014 budget, staff recommends two adjustments to the DBID budget submitted by the DNBA: 1. Reduce Marketing/Promotions by $20,000 and Beautification/Capital Improvement by $11,500 until further discussions can occur with members. a. Engage with businesses to review the strategic direction of the BID, its work plan and budget. 2. Add $18,000 to Member Services in order to contract for a part-time Downtown Manager who can manage the DBID and related activities including support member communications and planning for the DNBA. a. A paid staff position is critical to the long-term success and effectiveness of the BID funds and investments. Working with the DNBA, the position can maximize the investment by the DBID members. Staff recommends that the City provide office space for this position. Staff recommends that the Council approve the Annual Report, with the above recommendations, and Resolution of Intention to Levy. FISCAL IMPACT The Business Improvement District encourages economic development in Downtown Novato. Since the businesses within the BID assess themselves, there is no direct cost to the City. The City provides, at no cost to the BID, billing and collection of the annual benefit assessments, as well as administration of the annual BID renewal including staff time, mailing costs, and notification costs. Staff is recommending City staff support to strengthen the DBID and DNBA over the next year. This investment of City staff time is in line with one of the Council s strategic objectives to enhance and improve Downtown. Page 4 4
5 ALTERNATIVES 1. Do not accept and approve BID annual report and budget, or Resolution of Intention to Levy an Annual Assessment as proposed. Give direction to staff. ATTACHMENTS 1. Resolution of Intention to Levy an Annual Assessment 2. Exhibit A BID Map 3. Exhibit B BID Assessment Formula 4. Exhibit C Annual BID Report (Letter from the Downtown Novato Business Association, DBID Annual Report and Proposed DBID Budget) 5 Page 5
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7 CITY COUNCIL OF THE CITY OF NOVATO RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NOVATO DECLARING ITS INTENTION TO LEVY AN ANNUAL ASSESSMENT WITHIN THE DOWNTOWN NOVATO BUSINESS IMPROVEMENT DISTRICT WHEREAS, the California Streets and Highways Code Section et seq, authorizes cities to establish parking and business improvement areas for the purpose of promoting economic revitalization and physical maintenance of business districts in order to create jobs, attract new business and prevent erosion of the new business district, and WHEREAS, the Downtown Novato Business Improvement District (BID) was established in 1999 by Ordinance No. 1414; and WHEREAS, pursuant to Ordinance No and the California Streets and Highways Code the Board of Directors of the BID shall prepare an annual report for each calendar year in which assessments are to be levied which the City Council shall review. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Novato, does hereby resolve, determine, and find as follows: 1. The City Council has received and approved the 2013 Annual Report as modified. 2. It is the intent of the City Council to levy and collect benefit assessments within the BID for the 2014 calendar year. 3. The boundaries of the entire BID, and the boundaries of each separate benefit zone within the BID, are set forth in the map, attached hereto as Exhibit A, and incorporated herein by reference. A true and correct copy of the map is on file with the City Clerk of the City of Novato. 4. The types of improvements and activities proposed to be funded by the levy of assessment on businesses in the BID set forth in the 2013 Annual BID Report, attached hereto as Exhibit C, and incorporated herein by reference. 5. The City Council intends to levy an annual benefit assessment on businesses in the BID, except where funds are otherwise available, to pay for certain improvements and activities described herein occurring within the BID. 6. All funds of the BID shall be expended on improvements and activities within the BID. Page 7
8 7. The method and the basis for levying the assessment on all the businesses within the BID are set forth in the BID Assessment Formula, attached hereto as Exhibit B, and incorporated herein by reference. 8. New businesses shall be exempt from payment of the assessment until the next billing period following the date on which their establishment occurs. 9. A public hearing on the levy of assessment is hereby set for November 12, 2013, at 6:30 p.m. before the City Council of the City of Novato, at the City Council Chambers, 901 Sherman Avenue, Novato, California. 10. At the public hearing the testimony of all persons, for or against the assessments to be levied, will be heard. Written comments for or against the benefit assessments to be levied can be mailed by November 7, 2013, to the City Clerk of the City of Novato at 75 Rowland Way, Suite 110, Novato, California 94945, or submitted to the City Clerk at the public hearing on November 13, A protest against the levy of assessments may be made orally or in writing. An oral protest shall be made at the said public hearing. To count in the majority protest against the BID, a protest must be in writing. A written protest may be withdrawn from record at any time before the conclusion of the public hearing. Each written protest shall contain a written description of the business in which the person signing the protest is interested, sufficient to identify the business, and its address. If the person signing the protest is not shown on the official records of the City of Novato as the owner of the business, then the protest shall contain or be accompanied by written evidence that the person is the owner of the business. Any written protest as to the regularity or sufficiency of the proceedings shall be in writing and clearly state the irregularity or defect to which objection is made. 12. If at the conclusion of the public hearing there are of record a majority of written protests by the owners of the businesses within the BID that will pay fifty percent (50%) or more of the total assessments of the entire BID, no further proceedings to levy the assessments shall occur. New proceedings to levy assessments shall not be undertaken again for a period of at least one (1) year from the date of the finding of the majority written protest by the City Council. If the majority written protest is only as to an improvement or activity proposed, then that type of improvement or activity shall not be included in the BID. 13. Interested persons may view the Board of Directors Report on file with the City Clerk for a full and detailed description of the improvements and activities to be provided for in the 2014 calendar year, the boundaries of the area and any benefit zones within the area, and the proposed assessments to be levied upon the businesses within the area for the 2014 calendar year. 14. Further information regarding the Downtown Novato Business Improvement District may be obtained from the City Clerk of the City of Novato, at 75 Rowland Way, Suite 110, Novato, California, 94945, from 9:00 a.m. - 5:00 p.m., Monday through Thursday, or telephone All written comments shall be mailed and/or delivered to said address. Page 8
9 15. The City Clerk is instructed to provide notice of the public hearing as follows: a. Publish this Resolution of Intention in a newspaper of general circulation in the City of Novato once, at least seven (7) days before the hearing. b. Mail a complete copy of this Resolution of Intention to each and every business owner in the District within seven (7) days of the adoption of this Resolution by the City Council. 16. This Resolution is effective on its adoption. * * * * * * I HEREBY CERTIFY that the foregoing resolution was duly and regularly adopted by the City Council of the City of Novato, Marin County, California, at a meeting thereof, held on the day of, by the following vote, to wit: AYES: NOES: ABSTAIN: ABSENT: Councilmembers Councilmembers Councilmembers Councilmembers Sheri Hartz, City Clerk Approved as to form: City Attorney of the City of Novato Page 9
10 EXHIBIT A DISTRICT ZONES OF BENEFIT BOUNDARIES ZONE A: ZONE B: All businesses located within the area shown on the attached map as Zone A. All businesses located within the area shown on the attached map as Zone B. Page 10
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13 EXHIBIT B DOWNTOWN BUSINESS IMPROVEMENT DISTRICT BID ASSESSMENT FORMULA Type of Business Benefit Assessment Zone A Zone B Retailers/Restaurants 1-3 Employees $158 $ Employees $263 $ Employees $368 $184 Service Businesses $158 $79 Professional Businesses $131 $65 Financial Institutions $525 $525 Lodging (Bed and Breakfast) $158 $158 Lodging (Hotels and Motels) $263 $263 Page 13
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15 October 21, 2013 Dear DNBA Members: My name is Tom Atkin, your current interim President of the Downtown Novato Business Association (DNBA). For those of you who do not know me, I ve been an active participant and volunteer with the DNBA for 16 years. I am now Chairman of the Marketing and Promotions Committee and Interim President of the Association. I want to use this letter to provide you with a brief update of our organization. This past year the DNBA website has continued to grow with 2,000 visitors per month. blasting and social media has continued. We contracted with Comcast TV and three newspapers, all with online presence. As noted in the attached Annual Report, this past year DNBA hosted and partnered on many successful downtown events like the Spring Celebration, Farmers Market, Safe Trick or Treat, Holiday Tree Lighting Event and Nostalgia Days Car Show. We are very excited to see the 999 Grant building completed and the Mills restaurant property developed and open for business. There is action inside our Novato Theater and the brand new City Offices building is nearing completion. These are all wonderful additions to our downtown energy. Now it is time to regroup for 2014, check our marketing plan and check in with all of you. We will soon be conducting a Member Outreach Program utilizing surveys, blasts, website and other online tools. We want to know how you, our business owners and managers, feel about how the DNBA is utilizing your funds. We want to collect your ideas and suggestions. For this reason on the Budget, you will see the line item called Marketing Expense wrapped into one lump sum. We want to make sure what we are doing is working for you and is what you want before allocating. Attached to this letter is an update on the activities of the DNBA through the Downtown Novato Improvement District (BID) and the legally required annual BID notification from the City. The enclosed materials (BID Annual Report, BID Budget, BID Map, and BID Assessment Formula) are required for the annual renewal of the Downtown Novato BID. As noted in the attached resolution, the City Council will hold a public hearing on November 12 th, 2013 at the City Council Chambers at 901 Sherman to discuss these materials and levy assessments for the upcoming calendar year. It was stated gracefully in last year s report, Please realize that things will not change overnight, but we promise you they will change IF we are all patient and we ALL get involved. Participation is key to a lively and prosperous downtown. Thank you, Tom Atkin DNBA President DowntownNovato.com Page 15
16 2014 Annual BID Report Exhibit B List of Officers Tom Atkin President Mark Dawson - Vice President Randy Stemmer Secretary Connie Medeiros Treasurer Board of Directors Tom Atkin AE Video & Web Designs Mark Dawson - Giant Properties Randy Stemmer - MarinMarket.com Connie Medeiros - Distinct Advantage Real Estate Aldo Gigliotti - CPA Loren Roberts - North Bay Chiropractic Phil Schlenker - Continental Jewelers Vision: Our vision for Downtown Novato enjoys a vibrant, dynamic and fun downtown. Residents and visitors from all over the world come to Stroll Our Avenues and enjoy our many shops, eateries and to experience the ambience of our fantastic downtown. Mission: The purpose of the DNBA is to promote and improve the common business interest of business owners and merchants of downtown Novato. Improvements & Activities Improvements No capital improvements to the street although monies were allocated to assist with the beautification. Activities - Commercial Media Program: A robust marketing program was created in the 4 th quarter of 2012 and continued through 2013, consisting of television commercials (Comcast), advertising in varied newspapers including Novato Advance, Marin IJ and SF Chronicle and a full DNBA Internet environment including a website, (DowntownNovato.com), print websites (Comcast.net, MarinIJ.com and SFGate.com) and various Social Media venues that promote Downtown Novato as a destination for shopping, dining, recreation and services. The 2013 Expense Budget of $92,360 was approved by the City Council in Our Expense Budget projection for 2014 is $109,167. You will notice on the 2014 budget the Marketing amount of $35,000. This is much less than last year and hasn t been broken out yet pending some Community Outreach to find out how the merchants feel about the current management and usage of DNBA assessments. We are also looking at a Member Services position for This position could be a person taking DNBA related calls, answering questions and helping with DNBA administration. We have also talked about this person taking over the maintenance of our website and Social Media environments. Our Marketing and Ad campaign have been targeting specific categories of businesses through out the year. For Spring Celebration we brought attention to bakeries and restaurants. With tax time, we targeted Financial Institutions and Tax Preparation. The list includes Automotive, Music, Services, Restaurants, Our Events, etc. Television This year for our Comcast Xfinity schedule, we produced a higher end commercial for Spring and Fall with an outsourced production company. The spot is a general spot targeting most of the business categories in the downtown. We are getting ready to launch our Holiday season again and will produce another holiday spot soon. Our online presence out at Comcast.net has been successful. We have our ad on the home page that when clicked folds out and plays the commercial. After the commercial is done, provides links to our website display. They include a link to our Business Listing, Home Page and Events Print Our marketing committee has contracted with the San Francisco Chronicle (Annual), Marin (First half of 2013), and Marin IJ (Second half of 2013). The same ad has been running in all of our print and television venues to keep our sense of continuity throughout our marketing efforts. Website Starting at the beginning of the 4th quarter of 2012, a very robust website went into construction for the Downtown Novato Business Association. In 2013 the website has been continually improved and maintained to provide a powerful tool for our downtown marketing efforts. One of the main objectives of our over all marketing effort is to bring visitors to DowntownNovato.com to provide Information about our downtown and our events, Visibility for our downtown and Communication to our downtown merchants, to our local communities and beyond. This effort in-turn gets them excited about coming to our downtown. We have seen an increase of activity in our downtown as well as on our website which we can now measure through online website statistics. Downtown Events & Promotions: The following events and promotions are supported, sponsored or produced by the Association to reinforce the Downtown as the Novato community s center: Spring Celebration Brought a record number of children participants to the Easter Egg Hunt and festivities. Novato Farmers Market In 2013 the Marketing and Promotions committee put out bids, interviewed and chose Agricultural Community Events to run our new market. The new manager, Kelly, is very energetic and present. All the vendors are very happy. This past year Kelly has run very smooth and tight ship. School Fuel, Tour of Novato The new event is very well attended with focus on bicycles and walking / jogging. Art & Wine DNBA didn t participate this year, but we sponsored the Chamber golf tournament. 4 th of July Parade The Parade is now their own Non-Profit. Their event was very successful. Nostalgia Days Record turn-out of participating cars (280), 20 vendors, 14 vendor booths. The largest show to date Page 16
17 Safe Trick or Treat Joined with City of Novato Parks and Rec. Dept. to use new pocket park on Grant. Activities include jumpies, police fingerprinting, balloons and pictures store participants will give out candy. Tree Lighting and Store Decorating This year will be the same as usual, big stage and tent with musical acts, Santa s Village, non-profit vendors and backed goodies booths. Hot chocolate and hot apple cider. Always a very well attended and great event. Holiday Marketing Event To coincide with downtown merchant efforts, the DNBA will be working with them to help bring more visibility to the downtown. We will sponsor Carriage Rides and music on the bulb outs. For 2014 we will be looking at a new Music Series event that will bring bands in to play on the bulb outs and on the Civic Green. Committees Marketing Committee: A weekly or bi-weekly meeting who manages a marketing plan based on the yearly budget plan approved by our City Council. The committee works on events and promotional ideas and brain storms new ways to use our marketing venues to the best of their capability. Our marketing plan is robust in that it has put into place three different areas of communication. Television, Print and Internet including more focus on a Social Media campaign. There are many more ways to market our downtown and we are looking at them along with community outreach, researching and discussing to make sure they stay within our budget and are viable and aligned with our vision. Website Committee: The website venue has been moved into the care of the Marketing and Promotions committee. We have been working to improve the way we communicate with our DNBA membership, downtown as a whole, city of Novato and surrounding communities. We are in the process of finishing the creation of DowntownNovato.com with the last phase including Associate Membership, BID Member access to posting events, BID Member posting Calendar Events and Advertising packages on our website. This will include Credit Card processing. The website environment utilizes top notch technologies and Social Media. It has been designed and constructed to adhere to new and ever changing communication devices such as computers, smart phones and ipad s. We have reworked the DNBA logo to more reflect our Downtown Business Association. Our blasting with the new website environment to both our membership and to the public is now available and in use. We have full robust website statistics and are working to create a procedure with the downtown businesses to find out how the customers are finding us. The new website is the main hub of our overall marketing plan. DowntownNovato.com has many new technology features such as giving all BID members a login to allow them into their page to up-date their business information, add pictures, descriptions and keywords for Search Engine Optimization in a timely manner to reflect business changes or promotional offers. More features include; multiple calendars of events, media display engines for Videos, Commercials and Photographs. A live Facebook and Twitter feed on the home page will help bring the businesses and public together to create a community of value. This idea is to bring the people to the website and keep them coming back along with telling their friends to visit us. General Meetings: Location is at Druids Hall. Meetings are held on the first Wednesday of every month to provide a forum for members, property owners and city representatives to work together in creating a dynamic downtown business district. Board Meetings: Up to 15 directors, chosen by membership, meet on the third Wednesday of the month. The Board sets policy, approves contracts and oversees disbursement of the assessments provided by the BID, as well as votes on recommendations of the committees Communications: This year the relationship with the Chamber of Commerce continues to improve. We formed a stronger alliance with the Chamber to promote common goals for our City and Downtown. The Chamber Director and DNBA representatives had frequent meetings and shared columns in each other s papers and newsletters. Consistent communication and meetings held throughout the year on key issues such as parking, zoning, signage, etc. Discussion of joint Ribbon cutting ceremonies with Bid/Chamber members is in discussions. Our communication with the BID members, City of Novato and surrounding cities will continue to be at the forefront of the DNBA vision. We will continue to work on improving our transparency and integrity though the implementation of our marketing and communication environments. EXHIBIT C BID Assessment Formula All assessments are based on the rates approved in 2012, which will be carried forward for the 2013 calendar year. There is no more increase requested this year. Please refer to the BID Boundary map for definitions of Zone A and B. Type of Business Benefit Assessment Retailers/Restaurants Zone A Zone B 1-3 Employees $158 $ Employees $263 $ Employees $368 $184 Service Businesses $158 $79 Professional Businesses $131 $65 Financial Institutions $525 $525 Lodging (Bed and Breakfast) $158 $158 Lodging (Hotels and Motels) $263 $ Page 17
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