On Feb. 13 Los Altos City Council rejected a proposal from downtown business interests that the City hire a consultant for $10,000 to research the feasibility of the formation of a Los Altos Business Improvement District (BID) in the downtown. City Council members explained to the proponents that Council didn’t know much about BIDs, but they were very willing to learn.
A BID, or rather its cousin, a PID (Property owners Investment District) could be used to fund capital investment “goodies” proposed in the Downtown Visioning process. These goodies include things like parking structures, place-making projects such as permanent green parklettes, imposing street monuments at entries to downtown, etc.
City Council members countered the proposal for Los Altos Business Improvement District study with the suggestion that the boards of directors of the three downtown business groups — the Los Altos Village Association (LAVA), the Chamber of Commerce (Chamber), and the Los Altos Property Owners Downtown (LAPOD) — collectively “educate” Council, the public, and the business interests downtown. If that “education” were to really require $10K, the City could conceivably put up a quarter of the cost.
In other words, Council members like exploring the formation of a Los Altos Business Improvement District just fine. However, Council doesn’t want the City to foot the bill for the exploration, because the beneficiaries are primarily downtown business interests.
What’s a BID?
Business owner assessed Improvement District
A Los Altos Business Improvement District would be a geographic area wherein business owners/merchants assess themselves a fee/tax to pay for services that directly benefit them. For example businesses might be interested in paying for the maintenance of flowers, plantings, and sidewalk cleanliness downtown.
State law says the fees need to be in proportion to the benefits received by each business. The devil is in the “tax” assessment details… would the individual’s share of the costs of beneficial services be based on square footage, number of employees or gross revenue, etc.? Where should the boundaries of the assessment area be drawn? Just Main & State…or the whole downtown triangle…or something in between?
Typically the City would collect the assessed fees, and hand the fees over to a third party which would provide the services…a third party like LAVA. BIDs are limited to a finite period, often just 5 years, and then they expire. Apparently events like parades and street shows cannot be paid for through a Los Altos Business Improvement District.
BID pros and cons
Lalahpolitico has discussed the pros and cons of BIDs with a few area merchants and observers of retail. The prevailing sentiment is that BIDs are a bad idea. In Palo Alto, different BID proposals over the years have been voted down at least three times. (A simple majority is required.)
One observer said that a BID just helps out an organization like LAVA financially by making voluntary membership dues look like a mandatory tax. [However not every City enforces the fee collection strenuously, and of course the City adds a processing fee to the basic fee!] So the problem of some merchants free-riding on the shared services can continue.
One merchant said that the last thing a retailer needs now — with the ascendancy of Amazon online shopping — is another tax assessment.
Lalahpolitico: On balance it seems it is best to just stick with the voluntary organizations downtown paying most costs for things like events – the parades, the First Fridays. And if Los Altos residential owners continue to get stuck with paying 100% for the downtown’s annual flowers and periodic sidewalk steaming…well, it just isn’t that much money…so as a resident who is paying for those things…I’m ok with it. So a Los Altos Business Improvement District? Nah, probably not.
What’s a PID?
Property owner assessed Improvement District
A Property owner-assessed Improvement District (PID) is a geographic area wherein property owners vote to assess themselves, often to pay for capital improvements like parking garages, or capital intensive place-making projects. [This is not the tenant/merchants.]
Theoretically property owners also could band together to pay for annual expenses like sidewalk niceties. In that way they could be in total control of the look and feel of the sidewalks, the way that a mall operator is. A PID could allow a majority of property owners to better compete with a mall operator like Santana Row and the Stanford Shopping Center. The property owners could just pass on these sidewalk and place-making costs to tenants in higher rents. Of course, the improvements need to succeed in measurably increasing foot traffic and retail revenue per square foot or else the tenant will move elsewhere.Council member Jeannie Bruins asked Kim Cranston, a LAPOD board member, if any of the three downtown Los Altos business organizations had strawpolled their members about the level of support [votes] for being assessed a special tax? Paraphrasing her, “Why explore this, it it’s not likely to be supported?”
Kim Cranston replied that as for LAPOD, its members “represented 80% of the parcels downtown”…implying the were supportive of a PID.
Mr. Cranston explained that the reason the downtown groups want to get started on forming a BID/PID now was to be ready to [help?] fund elements of the final “Downtown Vision.” [ The completion of the Downtown vision scenario recommendation by the RNN consultant has slipped to summer 2018].
PID pros… there are no cons
It’s all about the parking, parking, parking! – Lalahpoltico
LAPOD vs. An Assessment Area
Los Altos Business Improvement District or LA/PID
Kim Cranston and some other large property owners in the Main and State area now seem eager to pay for an expansion of parking through restriping or constructing a garage…but they haven’t always felt that way. In fact, some have been steaming mad over what they see as a loss of 100 or more parking stalls during the rebuilding of several projects on North First Street in 2008-2012.
KIM CRANSTON, speaking for himself not for LAPOD, speaking to Council in 2014:
“As a downtown property owner, I would not vote to form an assessment district to help finance this proposal [a parking garage proposal floated in 2014]. Let me explain why. The downtown parking problem was created by the city council that from 2008 and 2012 eliminated 139 parking spaces in the downtown Public Parking District and allowed two developments to provide 76 fewer parking spaces than required by code. That’s a total of 215 parking spaces effectively eliminated from the downtown Public Parking District. Attachment 1 shows exactly how that happened.
In conclusion, I urge you not to spend more time or money exploring the development of a parking garage that assumes property owner support for an assessment district until you first address the city’s management and planning problems that created the parking problem by developing a Specific Plan for the downtown and civic center.” – Kim Cranston
Lalahpolitico: Apparently, Cranston and others are now through the 7 stages of grieving for the loss of those 215 spaces, and are ready to move out of the anger paralysis…and get things done! But getting a Los Altos Business Improvement District or rather a PID.. formed to fund expansion of parking won’t be easy. We/They should try.
LaLahPolitico Analysis – Best to Unleash the Downtown Owners But Protect Neighbors from Overflow Parking
Most downtown Los Altos property owners probably support
- relaxing parking parking ratios downtown asap per the 2015 Parking Committee [These proposed changes may soon appear before the Planning Commission and perhaps before Council too. … Before the the Downtown Vision plan is done.]
- restriping city parking plazas to squeeze in more cars like in downtown Menlo Park
- establishing a lowish $20,000 per parking spot in lieu fee for owners who are remodeling their buildings, adding extra square footage and can’t build stalls on their narrow lots
- eventually constructing a parking garage on a city plaza
And perhaps most of the centrally-located owners of downtown Los Altos commercial parcels are willing to vote to assess themselves and fund items 2, 3, 4 through an assessment district… Whether it be a Los Altos Business Improvement District or a PID.
If the owners want to do that stuff, and they want to pay for it, let them loose. However make them ALSO pay for an item 5 … vastly expanded employee/resident permit program.
If any of the parking changes frustrate and drive away the “best” regular customers, and if foot traffic and sales decline, well too bad. It would be the owners’ consequences. Please don’t whine to the City. It was the idea of you owners in the Los Altos Business Improvement District!
However, it is more likely that congestion, er, I mean vibrancy, will increase a great deal.
The neighbors need to be protected from overflow parking from the actions taken by any Los Altos Business Improvement District. Who do you think constantly turns out at Planning and Council meeting to oppose – downtown parking ratio change, restriping, etc. – it’s often the close-in neighbors. And…commercial neighbors not within the boundaries of the assessment area might need overflow parking protection. And residential neighbors in the condos and single family homes near downtown will want to preserve their street parking.
Los Altos needs a beefed up permit program more along the lines of what Los Gatos has. Based on a very cursory examination … fees for employee parking there seem to be very high … around $1200 … and for residents low… around $40. Los Altos white dots have been priced too low and sold out too quickly. A new Los Altos Business Improvement District /PID should accept responsibility for mitigating overflow.
For reference, Palo Alto has two mature residential permit programs for residents near California Ave. and another one for those near downtown Palo Alto. A group, Palo Altans for Sensible zoning, has championed permit parking … and other things. Here is some recent press about the two programs
LAPOD: Some of the LAPOD links go to 404 not found …so ….here are links to presentations about parking structures and more from LAPOD website…http://propertyownersdowntownlosaltos.org/resources/
Kim Cranston’s 2014 interesting and informative detailed POV history of the loss of parking and generally bad planning. On LAPOD site.
36614.6. “Property-based assessment” means any assessment made pursuant to this part upon real property.
36614.7. “Property-based district” means any district in which a city levies a property-based assessment
(h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district.
Examples from southern California
click on Los Feliz Villagehttp://losfeliz.biz/blog/
Excerpt…”4. WHAT IS THE CITY’S ROLE IN PROVIDING THESE IMPROVEMENTS?
The City’s primary role is to exercise its municipal authority to levy the assessment on behalf of the [Los Altos Business Improvement District] community. By having the City assess all affected parties, the BID receives funds from everyone benefiting from the improvements. Persons or entities that would otherwise refuse to participate, thus burdening the remaining BID members, do participate. Similarly, the City’s BID billing process minimizes the number of members in the district who receive benefits without paying for them. The City requires that a nonprofit corporation be designated as the agent responsible for procuring the BID improvements. The nonprofit corporation (service provider) is then contractually obligated to provide to the City financial reports that disclose financial activity associated with use of the assessment funds. The City is also authorized to audit or otherwise review the financial condition of the BID. In this way, the City assists the BID membership with oversight and review, so that the special assessment is used according to the intentions of the business community.”