RECOMMENDATION 1) Authorize the City Manager to sign the City s petitions and ballots in favor of the PBID (Exhibit A); and if approved then,

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1 DATE: May 8, 2018 TO: FROM: Ron Davis, City Manager Patrick Prescott, Community Development Director Via: Simone McFarland, Asst. Community Development Director Business and Economic Development / Public Information Office Communications Manager By: Mary Hamzoian, Economic Development Manager SUBJECT: Authorize the City Manager to Sign the City s Petitions and Ballots and Approve the Resolution of Intention to Renew the Downtown Burbank Property-Based Business Improvement District RECOMMENDATION 1) Authorize the City Manager to sign the City s petitions and ballots in favor of the PBID (Exhibit A); and if approved then, 2) Adopt a RESOLUTION OF INTENTION OF THE COUNCIL OF THE CITY OF BURBANK TO FORM A BUSINESS IMPROVEMENT DISTRICT PURSUANT TO THE PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994 (Exhibit B). BACKGROUND The Downtown Burbank Property-Based Business Improvement District (PBID) was originally established by City Council in July 2003 as part of the City s efforts to revitalize Downtown Burbank (Downtown) and has since been renewed twice, each for a new five-year term. The goal of the PBID is to fund and manage improvements in collaboration with Downtown property owners, and to increase consumer spending and visitation to Downtown. Currently in its 15th year of operation, the PBID has invested approximately $10 million into Downtown to help create a vibrant, mixed-use, urban neighborhood with entertainment, shopping, and dining establishments for residents, visitors, and employees. Since 2003, the PBID has provided an enhanced level of power washing and porter services, capital improvement projects that create place making, event production and marketing campaigns that reach more than 12 million people annually and attracted thousands of visitors to the area. None of which would be possible without the investment and dedication of the property owners and the Downtown Burbank Partnership (Partnership) 1. 1 The non-profit organization with a Board of Directors that oversee the operation of the PBID.

2 During the past five years alone, the PBID has: Invested more than $1.16 million in capital improvements including upgrades to paseos, new street furniture, drought tolerant plants, lighting installations, holiday decor and the addition of six murals through the Art and Mural Program; Attracted more than 247,000 visitors to Downtown via events such as the Car Classic, The Winter Wine Walk, The Burbank Beer Festival, and more; Increased power washing and street sweeping to include 40 power washes to sidewalks per year, above and beyond what the City s baseline services provide; Developed the award winning MUD Paseo Enhancement Project and the Downtown Burbank Art and Mural Program; and Provided leasing support to brokers and property owners to facilitate merchant attraction bringing in new retailers and restaurants including: Color Me Mine, European Wax Center, Gyu-Kaku Japanese BBQ, Tender Greens, The Boiling Crab, Touchstone Climbing, Urban Press Winery, Wood Ranch BBQ & Grill, Yard House, and more. DISCUSSION PBID Renewal To initiate the renewal process, a Steering Committee comprised of property owners and merchants in the PBID was formed in 2017 and Civitas Advisors, a Business Improvement District consultant was hired by the Partnership. Property owner outreach and feedback is essential to the renewal process. Staff reached out to all property owners within the PBID utilizing a variety of communication methods, four newsletters with information regarding the renewal process and the PBID s Annual Report was sent to all of the property owners, three open-house meetings were held in Downtown and eleven individual one-on-one meetings were held with property owners and merchants to receive feedback and input on existing services and the addition of new programs. This information was compiled into the new draft Management District Plan (MDP) 2 attached as Exhibit C. Changes to the Management District Plan The draft MDP outlines the major components of the PBID including: the proposed boundaries; service plan and budget; and the assessment formula. Below are the proposed MDP changes: 1. Expansion of the boundary - The new boundary is proposed to be from Burbank Boulevard to the north and Alameda Avenue to the south, Glenoaks Boulevard to the I-5, and the Metrolink Parcel on Front Street. Extending the district six blocks to the South towards Alameda Avenue will harness the energy of retailers including IKEA, Tesla Motors, SpringHill Suites, and the Hilton Garden Inn. The PBID was previously one assessment zone and is now separated into three assessment zones. 2. Service Plan Categories - The existing MDP for the PBID includes the following categories: capital improvements and maintenance, marketing and events, advocacy and administration, and contingency reserve. The proposed MDP maintains the existing 2 A plan required by Section of the California Street and Highways Code which outlines essential functions of the District including a description of improvements or activities. 2

3 categories and adds economic enhancements to include programs such as homeless services and street performer management. 3. Zone 1, 2, and 3 - With the expansion of the PBID South to Alameda, the PBID has been separated into three zones. Each zone will pay a slightly different assessment commensurate with the services that they receive (Exhibit D). The proposed 2019 Assessment rate for Parcels in Zones 1, 2, and 3 are as follows: Initial Parcel Assessment Rates Zone 1 Zone 2 Zone 3 Parcel Size Parcel Size Parcel Size (sq. ft.) (sq. ft.) (sq. ft.) 3 Parcel Frontage Along San Fernando Blvd. (In ft.) Parcel Frontage Along San Fernando Blvd. (In ft.) Commercial $0.170 $0.208 $2.60 $0.160 $2.00 Governmental $0.119 $ $1.82 $0.112 $1.40 Industrial $0.085 $ $1.30 $0.08 $ Increase in assessment in Zone 2 - After fifteen years with no increases in assessment, and challenges with maintaining the same level of services, the Partnership agreed that in order to continue providing the level of services the property owners and merchants have become accustomed to while also addressing the needs of an evolving Downtown, an increase in assessments is necessary. This increase is proposed only for the core area identified on the map as Zone 2 (Exhibit D - Map) and the increase is commensurate with the additional services Zone 2 will be receiving such as homelessness services, street performer management, and Business Assistance Programs. Renewal Next Steps The draft MDP and petition were mailed out to all property owners within the PBID. In order to move forward with the renewal process, property owners representing greater than 50 percent of properties in the PBID must sign a petition of approval. At the time of this staff report, a total of percent of the assessed properties have signed a petition (Exhibit E) in in favor of initiating the renewal and expansion of the PBID and moving forward to the ballot process. This percentage does not include the City s petitions which represents a total of 7.51 percent (Exhibit A). Should the City Council authorize the City Manager to sign the City s petition, the 7.51 percent representing the total City s assessment will be added to the current total of assessed properties in favor of renewing and expanding the PBID. Thereafter, if the Resolution of Intention is approved by the City Council, property owners within the PBID will be sent a ballot to formally vote on the renewal. Additionally, by approving the Resolution of Intention, the City Council is directing staff to set a noticed hearing for the Resolution of Formation of the proposed PBID for June 26, At

4 this hearing, the City Council will open the ballots and should a majority of ballots be in favor of renewing the PBID, the City Council will consider final approval. Should a majority of the current property owners no longer wish to participate, the PBID would dissolve on December 31, City Assessment Obligation The City is a property owner within the PBID. PBID law states that governmental agencies are not exempt from paying assessments; therefore, the City is obligated to pay its share of the assessments. The City parcels benefit from the PBID s increased maintenance, capital improvements, marketing, promotions, events, and increased sales tax. The City parcels will be assessed at 70 percent of the standard commercial assessment rate which is proportional to the benefit they receive. The new rate of assessment to City parcels is $85, (Exhibit A). As in previous years, the City will be credited for its costs related to the collection and disbursement of the assessment (Financial Services Department), City Attorney services, and operational costs for rent, telephone, supplies, postage, and other general office expenses. With the PBID s expansion and added programs, the City will provide more of the services mentioned above. These services will be valued at $79, The City is credited for a majority of these services and therefore will be responsible for paying a total of $5, annually ($85, $79,804.95=$5,853.38). Economic Development funds will be used to cover the annual assessment for the City. In addition to the $79, that the City is credited for the services mentioned above, the PBID has a separate City Services Agreement (Agreement) with the City where it reimburses the City for economic development staffing costs. Should the PBID be renewed, the Agreement will be brought back for City Council consideration at a later time. FISCAL IMPACT Should the PBID be renewed for a new term, the Economic Development Budget (General Fund) would be utilized to pay the City s assessment obligation in the amount of $5, annually. CONCLUSION Throughout its 15-year history, the PBID has provided a stable funding mechanism to progressively improve infrastructure, increase maintenance, attract new tenants, and expand the area s customer base. With the goal of increasing value for property owners and increasing sales for merchants, the PBID has shaped the evolution of Downtown to become an urban, entertainment destination with new retailer s, restaurants, special events and marketing, and a welcoming, clean, and safe neighborhood. The renewal of the PBID is crucial to continuing the progression of Downtown. At the Public Hearing of the City Council on June 26, 2018, if a majority of ballots received are in favor of renewing the PBID, and with City Council in favor of the renewal and expansion, the PBID would be renewed for another ten-year term commencing January

5 EXHIBITS Exhibit A City s Petitions Exhibit B Resolution of Intention Exhibit C Draft Management District Plan Exhibit D Detailed Budget with Services and Map Exhibit E Signed Petitions Exhibit F Downtown Burbank Annual Report 5