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APPROVE RENEWAL OF THE MIRACLE MILE PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
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RECOMMENDATION
It is recommended that the City Council adopt a Resolution of Intention:
1. Approving the renewal of the Miracle Mile Property and Business Improvement District;
2. Accepting the Petition of Property Owners;
3. Preliminarily approving the Management District Plan and Engineer’s Report;
4. Approving the proposed Boundary Map;
5. Setting a date for a Public Hearing of Protest for December 5, 2017;
6. Providing for property owner ballots provided by the District to be mailed by the City; and
7. Authorizing the City Manager to sign the ballot for City-owned property in favor of the renewal.
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Summary
A Property and Business Improvement District (PBID) is a flexible financing tool for creating private-sector, self-governed management districts. Currently, the City has two such districts, the Downtown Stockton Alliance and the Miracle Mile Improvement District. The Miracle Mile Property and Improvement District (MMPBID) has requested that the City of Stockton consider reestablishing the district for a term of five (5) years beginning January 1, 2018.
DISCUSSION
Background
Local and state governments are often unable to provide specialized services to meet an area’s unique needs. A Property and Business Improvement District (PBID) is a flexible financing tool for creating private-sector, self-governed management districts. These districts provide the means for enhanced maintenance, safety, marketing, management, and advocacy services through property assessments. These assessments are paid directly by property owners as part of their annual tax bill. Funds raised through a PBID cannot be diverted to government programs. The MMPBID is one of two existing Property and Business Improvement Districts within the City of Stockton. The second is the Downtown Stockton Alliance, which successfully renewed its district earlier this year. The MMPBID was established by Council Resolution No. 07-0310 on July 17, 2007, with an initial term of five years. It was subsequently renewed by Council Resolution No. 2012-06-26-1601 for an additional five-year term with an expiration date of December 31, 2017.
On May 23, 2017, the City Council adopted Resolution No. 2017-05-23-1402, stating its intention to renew the MMPBID, accepting the petition of property owners, preliminarily approving the Management District Plan and Engineer’s Report, approving a proposed boundary map, setting a date for a public hearing of protests on July 25, 2017, providing for property owner ballots, and authorizing the City Manager to sign the ballot for all City-owned property which was proposed to be assessed in favor of the renewal of the MMPBID. On July 11, 2017, the Resolution of Intention adopted by the City Council was rescinded, and the votes were not tabulated, for a variety of reasons including a clerical error in mailing out the official ballots and the need for additional collaboration among the stakeholders. The rescission allowed the MMID Board and property owners to continue discussions and make modifications to the proposed Management District Plan.
MMPBID has been continuing to provide supplemental services to the Miracle Mile and Harding Way commercial corridors since its inception in 2007, including enhanced security and maintenance, landscape beautification, and marketing and events. Some of its more recent accomplishments and future plans include:
• Increased dedicated patrols from the Stockton Police Department and plans for signal upgrades.
• Harding Way beautification improvements to begin in the Fall of 2017.
• Recruited The StockMarket to the Miracle Mile, resulting in 2,500 visitors to the district.
• Partnered with the City of Stockton in improving parking lots along the Mile, including new asphalt for some lots, filing pot holes and restriping.
• Increased security patrol (averaging 96+ hours weekly) without an increase in assessments.
Present Situation
After discussions with property owners within the proposed MMPBID boundary, the following are revisions the MMID Board made to the Management District Plan:
• The term of the MMPBID was changed from 10 years to 5 years.
• The annual assessment will remain the same for the 5-year term; the ability to increase the assessment by 4% each year was removed.
• Zone 3 was added to reduce the annual assessment paid by Harding Way property owners to 80% of the zone they were previously in.
• Property owners will be able to nominate and vote for new MMID Board members as vacancies occur.
The MMPBID has requested that the City consider reestablishing the district for a five-year (5) term beginning January 1, 2018, as provided under the law. To initiate the process, the MMPBID has complied with the required provisions of the Property and Business Improvement District Law of 1994, including the preparation of a Boundary Map (Exhibit 1 to the resolution) showing the territory proposed to be included within the district. Properties that are zoned residential and used exclusively for residential purposes are exempt from the MMPBID assessments.
PBID Law, specifically California Streets & Highways Code Section 36621 also requires that property owners1 located within the proposed MMPBID boundary be petitioned to determine if more than 50% support the formation, or renewal in this case, of the district. The petitions are weighted based upon the assessment amount each property owner will pay. Once the more than 50% threshold has been met, a Resolution of Intention to renew the district is presented to the City Council for consideration.
If the Council approves the Resolution of Intention, assessment ballots and notice of public hearing are mailed to property owners within the district in accordance with California Government Code Section 53753. That section also requires that the notice contain the total amount of the proposed assessment chargeable to the entire district, the amount chargeable to the record owner's parcel, the duration of the payments, the reason for the assessment and the basis upon which the amount of the proposed assessment was calculated, and the date, time, and location of a public hearing on the proposed assessment.; A public hearing is held forty-five (45) days or later from the date of the initial Council meeting to renew the district to receive public testimony and tabulate the ballots received. If the majority of the ballots received are in favor of the renewal, then the City Council may adopt a resolution approving the renewal of the district.
In addition, a Management District Plan is prepared by the MMPBID that specifies how the assessment funds are to be spent. PBID spending priorities and limits are established by property owners through the Management District Plan. Further, the MMPBID must prepare an annual report to the City Council outlining its accomplishments for that year.
According to MMID, written petitions were distributed to property owners of record by e-mail on August 29, 2017, along with a Management District Plan summary describing the district boundary, assessment, and services of the MMPBID. On October 2, 2017, the City received the MMPBID signed petitions indicating support from more than fifty percent (50%) of the property owners. At the time of drafting this report, petitions in support of the district formation were submitted by 43 property owners, which represent 60.3% of the total proposed assessment. These petitions are on file with the City Clerk.
MANAGEMENT DISTRICT PLAN
The Management District Plan (Exhibit 2 to the resolution) includes the proposed boundary of the MMPBID, a service plan, assessment methodology for all benefit Zones 1, 2, and 3, budget, proposed means of governance, and Engineer’s Report. The MMPBID will include parcels in the Pacific Avenue area from Alpine Avenue on the north to Harding Way on the south, and all commercial parcels that front Harding Way between Lincoln Street on the west and North El Dorado Street on the east. A total of 158 properties with 94 property owners are included within the benefit zones, Zone 1, 2, and 3.
The MMPBID will continue to provide supplemental improvements and activities that are above and beyond those provided by the City and other government agencies, including:
• Environmental Enhancements: public safety, maintenance, and beautification;
• Marketing and Promotions: business recruitment and retention, marketing and promotion programs to attract patrons and new investment.
• Administration and Advocacy: advocate on policy issues concerning the district, provide daily management to carry out MMPBID operations.
If approved, the renewed MMPBID will have a five (5) year life. The assessment will be implemented beginning January 1, 2018. During the operation of the district, there shall be a 30-day period each year in which property owners paying more than fifty-percent (50%) of the assessment may protest and begin proceedings to terminate the MMPBID pursuant to California Streets and Highways Code Section 36670(a)(2).
The assessment will be collected by the County on an annual basis from each assessed property owner and forwarded to the City. The City shall forward the assessments to the Miracle Mile Improvement District, which will have the responsibility of managing MMPBID programs as provided in the Management District Plan. The City shall be paid a fee to cover its costs of collection and administration. The projected annual budget for operations for the MMPBID is $221,380, which will be funded by property assessments. This amount will be supplemented by non-assessment funds such as grants, fundraising and special events with the goal of increasing the annual budget to $261,426.
DISTRICT Renewal PROCESS
August 23, 2017 FINAL MANAGEMENT DISTRICT PLAN
August 29, 2017 PETITION DRIVE
Begin petition of property owners located within the district to determine those that are in favor of renewing the MMPBID.
October 2, 2017 SUBMITTAL OF PETITIONS
Petitions totaling more than fifty percent (50%) of the assessment proposed to be levied are submitted to the City Clerk’s Office.
October 17, 2017 RESOLUTION OF INTENTION (Current Step)
Upon the submission of a written petition, signed by the property owners in the proposed district who will pay more than fifty percent (50%) of the assessments proposed to be levied, the City Council may initiate proceedings to renew a district by the adoption of a resolution expressing its intention to renew a district.
October 18, 2017 NOTICE & PROPOSITION 218 BALLOT
The Property and Business Improvement District Law of 1994 and Proposition 218 require the City mail written notice and assessment ballots to the owners of all property proposed to be assessed within the district. Mailing the notice and assessment ballot begins a mandatory forty-five (45) day notification period.
December 5, 2017 FINAL PUBLIC HEARING
Council will open a public hearing and receive public testimony. At the end of testimony, Council will close the public hearing and direct tabulation of assessment ballots submitted and not withdrawn to determine whether there is a majority protest against the assessment. A majority protest exists if the ballots in opposition to the proposed assessment exceed the ballots in support of the proposed assessment, weighted by the amount each owner will pay. If there is no majority protest, Council may adopt a resolution declaring the results of the majority protest proceedings and renewing the MMPBID. A notice will be published in The Record announcing the Public Hearing set for December 5, 2017, at least fifteen (15) days prior to the hearing.
FINANCIAL SUMMARY
The Management District Plan requires that local governmental agencies, including the City of Stockton, will pay assessments for special benefits conferred to their property within the boundaries of the MMPBID, pursuant to Article XIIID of the State of California Constitution.
The proposed assessment rate is based on benefit zone, building square footage, and parcel square footage. The initial annual rate to each parcel is shown in the table below.
|
Proposed Initial Assessment |
|
|
Commercial |
School |
|
Benefit Zone |
Building S.F. + Parcel S.F. |
Building S.F. |
|
Zone 1 |
$0.1276 |
$0.1276 |
|
Zone 2 |
$0.0622 |
$0.0622 |
|
Zone 3 |
$0.1021 |
$0.1021 |
The annual assessment total for the City-owned property within the proposed district is $20,270.85 and will be funded from Account No. 010-0131-510.40-22 General Fund Non-Departmental Administration. The assessment will continue for a period of five (5) years.
1 California Streets & Highways Code Section 36615 provides:
“Property owner” means any person shown as the owner of the land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient.