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ADOPT AN ORDINANCE AMENDING TITLE 3, CHAPTER 3.96, SECTIONS 3.96.020 AND 3.96.030 AND ADDING SECTIONS 3.96.040, 3.96.050, 3.96.060, 3.96.070, 3.96.080, 3.96.090, 3.96.100, 3.96.110, 3.96.120, AND 3.96.130 OF THE STOCKTON MUNICIPAL CODE, RELATING TO THE ESTABLISHMENT OF COMMUNITY IMPROVEMENT DISTRICTS
recommended action
RECOMMENDATION
It is recommended that the City Council adopt an ordinance amending Title 3, Chapter 3.96, sections 3.96.020 and 3.96.030 and adding sections 3.96.040, 3.96.050, 3.96.060, 3.96.070, 3.96.080, 3.96.090, 3.96.100, 3.96.110, 3.96.120, and 3.96.130 of the Stockton Municipal Code, relating to the establishment of Community Improvement Districts.
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Summary
City staff recommends Council enact the attached proposed revisions to Chapter 3.96 of the Stockton Municipal Code (“SMC”) relating to Community Improvement Districts (Attachment A - Redline Ordinance). Considering the elimination of the Stockton Redevelopment Agency, this amendment will allow existing Stockton business districts new mechanisms to establish innovative ways of attracting, retaining, and expanding their businesses to remain competitive with other areas in the region. One way to create such a district is through a Community Improvement District (CID) which provides greater flexibility to meet local needs than other tools. City staff recommends that the SMC Chapter 3.96 be revised to support the above, which allows for the creation of a CID within the boundaries of the City of Stockton.
DISCUSSION
Background
Considering the elimination of California Redevelopment Agencies, the City of Stockton is proposing an amendment to the existing ordinance to improve the overall environment for its residents, property owners, and business owners and allow new methods for long-term economic development. Stockton contains many neighborhoods and downtown mixed-use (residential and commercial) property owners that could benefit from property-based assessment districts to enhance the security, safety, appearance, and economic viability.
A CID is a community driven partnership with the City to improve the quality of life in neighborhoods and mixed-use commercial districts. They are enacted through a local enabling ordinance that allows for establishing a new special benefit district. Allowing CID’s provides cities greater flexibility to neighborhoods and corridors that have existing districts or those that wish to form new districts. It also serves as a response to the needs of businesses and property owners. It can provide a funding mechanism for economic development programs and initiatives through community-driven partnerships.
Existing Property and Business Improvement Districts (PBID), the Downtown Stockton Alliance and the Miracle Mile Improvement District both currently provide a strong unified voice for their respective districts and represent the business and community interests to local government agencies and investors. Much like PBIDs, authorized by the Streets and Highways code, a CID is a voluntary funding mechanism where property owners, business owners, or a combination of the two are levied a special assessment to fund services that benefit the district. Benefits to businesses or residents may include the development of public space, marketing efforts, organization and promotion of special community events, business attraction and retention initiatives, beautification and decorations and advocacy. In addition, maintenance may include landscaping, cleaning of public rights of way, additional trash removal, security services over and above local police, installation of security cameras, graffiti removal and special lighting. Districts could also include residential property owners in areas with mixed-use developments. The ordinance will allow the inclusion of residential properties at initial formation or a later date. The funds and services are administered by an existing or newly established non-profit entity that pays the assessments, including merchants, property owners, residents, and stakeholder organizations.
Historically, the two PBIDs in Stockton, the Miracle Mile Improvement District and the Downtown Stockton Alliance, have been able to provide additional maintenance, safety measures, and economic development activity such as organized events that drive traffic and recruitment of small businesses into the district. Districts have the ability to prioritize initiatives that best serve their neighborhood.
Present Situation
The establishment and presence of a PBID are beneficial to an area served to enhance and provide additional security, improve appearance with added maintenance, enrichment of marketing efforts, and overall economic viability. This ordinance amendment would provide a greater level of flexibility for the potential to form additional districts that could be either strictly business, residential, or a mix of business and residential. A CID can be created for a longer period of time than a PBID thus allowing longer-term certainty for future planning and investment. CID’s can also include residential and mixed-use areas, providing flexibility in creating districts that reflect the changing face of neighborhoods.
Business districts support the City’s recently approved Economic Development Strategic Action Plan (EDSAP) and aid in the development of Investment Area 1 to strengthen the local business climate to drive economic activity. The benefits of the establishment and presence of districts can retain existing businesses and attract desired businesses to Stockton. It can serve as a unifying mechanism for all stakeholders in a business district (merchants, property owners, and residents) to voluntarily work toward a common goal, that of an economically revitalized business district which is enjoyable to visit and shop and meets the community’s needs while also attracting repeat visitors from other areas. Districts can help facilitate increased sales to existing businesses with marketing campaigns and by developing a vibrant environment.
With the amendment of Title 3, Chapter 3.96, four primary changes will occur to our existing ordinance:
• 3.96.070 lowers the percentage of ownership interest that needs to initially petition the Council to form a district (from 50 percent to 30 percent). Likewise, 3.96.120 provides an equally lowered percentage of ownership to petition Council to disestablish the district pursuant to Streets and Highway Code Section 36670(a)(2).
• 3.96.080 allows new cost categories to be included in the assessment for the district. These cost categories are those related to district formation.
• 3.96.090 allows the Council to advance City funds to operate the district initially. The Resolution of Intention would dictate the terms of the advance (interest rate, duration, etc.)
• 3.96.100 and 110 allow for longer terms & renewal terms, up from 10 to 20 years. This will reduce expenses associated with a renewal for the City and District.
It is recommended that the Stockton City Council adopt the proposed changes to SMC Chapter 3.96 relating to the establishment of Community Improvement Districts, providing greater flexibility to meet local needs.
FINANCIAL SUMMARY
There is no financial impact concerning the proposed amendment to SMC Chapter 3.96.
Attachment A - Redline Ordinance