PURPOSE

The purpose of this agenda item is for the City of Burbank to continue procedures and finalize proceedings on the proposed Property-based Business Improvement District (P-BID), and authorize the opening of ballots. If upon the conclusion of the hearing, the submitted ballots (which shall be weighted according to the proportional financial obligation of the affected properties) are in favor of the assessment exceed the ballots submitted in opposition, then the Council can adopt the resolution establishing the District and levying the first assessment. The City shall not impose an assessment if there is a majority protest. A majority protest exists if, upon the conclusion of the hearing, ballots submitted in opposition to the assessment exceed the ballots submitted in favor of the assessment. The purpose of the PBID is to provide special services and improvements to enhance Magnolia Park.

BACKGROUND

In September 2004, staff presented the Magnolia Park Action Plan to the City Council that included the results from five survey groups, a 3,000 residential survey, and input from the Magnolia Park Community Advisory Committee. The Action Plan findings recommended numerous improvements and programs such as retail leasing, parking, promotions and events, and other miscellaneous improvements. These various activities were recommended to be funded by a proposed P-BID.

A Steering Committee was subsequently formed to work with staff and Downtown Resources to develop the Magnolia Park Management District Plan. The Steering Committee met monthly and numerous property owner meetings were conducted to develop a draft management plan. Three public, large-group meetings were conducted with property owners to share the draft plan with them and receive feedback.

A final District Plan was made available to the property owners as well as a bullet point brochure outlining the improvements in the plan. Two public meetings were held during the petition drive to answer additional questions and draw support. In addition, a letter with the accompanying petition was sent to the property owners on two occasions.

Property owners representing more than 50% of the proposed assessment have signed a petition to initiate the special assessment proceedings and were presented to City Council on June 20, 2006. Council accepted the petitions and directed staff to send out the ballots for the final step to form a P-BID.

ANALYSIS

On June 20, 2006, the City Council reviewed the proposed Management District Plan in conjunction with the formation of a P-BID. The Magnolia Park Management District Plan describes the District boundary, services and improvements, budget, cost, formation, and duration (Exhibit A).

The Plan can be summarized as follows:

• District Boundary is proposed to include commercial properties along Magnolia Blvd. and Hollywood way, bound by Chandler Blvd. to the north, Clark Ave. to the south, the City limits to the west, and Buena Vista to the east (See Map, Exhibit B).

• Services and Improvements include a parking program with a goal to create or make available at least 150 new or newly managed spaces in Magnolia Park.

• Maintenance Services to clean debris from street trees and increase the frequency of litter removal along with an Urban Reforestation program.

• Promotions, Advertising, Events, and Business Recruitment to support and attract more desirable businesses.

• Advocacy to promote business interests and allow the business community to speak with one voice.

• The total District budget for each year of its five (5) year operation is a base of approximately $250,000 per year with a maximum 3% increase per year.

• Assessments formulas for the District are divided between two zones. Zone 1 runs from Buena Vista Ave. and Magnolia Blvd. to Pass Ave. including Hollywood Way from Clark Ave. to Chandler Blvd. Zone 2 runs from Pass Ave. to Ledge St. on Magnolia Blvd. The cost to the property owners in Zone 1 is $0.12 per lot square foot per year plus $0.05 per building square foot per year.  Because of fewer services and reduced benefit, the cost to owners in Zone 2 is $0.06 per lot square foot per year plus $0.025 per building square foot per year.  Because of the commercial nature of the improvement programs, residential and non-profit properties are not assessed. 

• District Term for the proposed District will be five years.  After five (5) years, the petition process, ballot process, and City Council public hearing process must be repeated for the District to be reestablished.

Annual Budget Summary

Parking Improvement                                                                         $  67,500

Maintenance                                                                                        $  57,500

Promotion, Advertising, Events, and Business Recruitment          $  55,000

Advocacy and Administration                                                            $  65,000

Contingency Reserve                                                                               $     5,000

Total                                                                                                     $250,000

Magnolia Park P-BID Governance

The proposed District shall be governed by a private non-profit corporation with oversight from the Burbank City Council.  The Board of Directors of the non-profit organization and its staff are charged with the day-to-day operations of the Property-based, Business Improvement District.  In addition the state law requires that the nonprofit corporation provide an annual report to City Council to report on revenue received, expenditures made, and budgets for the upcoming year.

This plan proposes that the Board of Directors of the non-profit corporation be comprised of a large majority of property owners paying the proposed assessment.  In addition, the Board of Directors should represent a variety of interests within the District and respond to the needs of property and business owners. In order to achieve this diverse representation, the initial Board of Directors as outlined in the Plan is proposed to be comprised of the following board seats:

            6   Property Owners (Could also be business owners)

            2   Residential Representatives

            2   City Representatives

            1   Business Owner

The Board of Directors shall act in the best interests of all of the properties and businesses within the proposed District.  The diverse representation described above ensures that the interests of all of the properties and business in the District shall be fairly represented. Should the City Council approve the formation of a P-BID, it is recommended that the City Council direct staff to solicit applications for the P-BID Board.

FISCAL IMPACT      

If the City Council approves the proposed P-BID, the Parking Authority would be assessed $1,807 per year for five years, or a total of $9,035 for the parking lots it owns in the District. In addition, per a license agreement with the Los Angeles Department of Water and Power, the Parking Authority is required to pay their assessment for a property that they use as a public parking lot in the amount of $1,518 per year or $7,590 over five years. Also, staff is in the process of working with the LADWP on leasing a second property for a public parking lot. The terms and potential partnership with the P-BID are still to be determined; however, like the other agreement with LADWP, it is anticipated that the terms will be on a �triple net basis�, thus the Parking Authority would be responsible for this assessment as well. However, the proposed transaction with the P-BID may allow this cost to be paid by the P-BID. It is estimated that the annual assessment for this property will be $4,860.

The private property owners would be assessed approximately $250,000 per year over five years. The total district-wide budget would therefore be $1,250,000 over the five year period.

CONCLUSION

 A comprehensive strategy for improvements for the Magnolia Park area will require a broad level of property and business owner support including a dedicated funding source to be successfully implemented. The proposed P-BID offers a voice to owners and businesses, backed-up with funding to support a vital retail area. Should the property owners at the end of the five-year Plan no longer want to participate in the P-BID, the district would automatically dissolve, unless a majority of the owners wished to continue the P-BID. In that case, the full three step process to form a P-BID would have to be completed again for renewal (petition process, Council approval, and the ballot process). Thus, it is in the collective interest to see that the Plan is ultimately successful.

RECOMMENDATION:

Subject to the ballots results, it is recommended that the City Council approve the proposed Magnolia Park P-BID. If the City Council approves the formation of the P-BID, it is recommended that the City Council direct staff to advertise to solicit applications for the proposed P-BID Board.

EXHIBITS:

A         Management District Plan

B          Map of Proposed BID

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