PURPOSE:

The purpose of this agenda item is for the City of Burbank to accept the submission of a petition from downtown property owners, and authorize the initiation of proceedings to form the PBID.

BACKGROUND:

In August of 2002, the Agency conducted a Study Session to review a comprehensive strategy for the revitalization of Downtown Burbank.  The strategy included marketing efforts, a leasing strategy and a Downtown Tenant Assistance Program to attract quality tenants to fill existing vacancies.  Infrastructure improvements were also recommended such as the installation of �Smart Parking� technology, and a Wayfinding/Signage Program to direct motorists and pedestrian to and around the downtown.  Finally, the strategy outlined a reformatted Business Improvement District that includes a substantially expanded program and broader participation from downtown businesses and property owners.

The successful implementation of this strategy requires a broad level of support including a dedicated funding source and staffing.  The existing tenant-based Business Improvement District generates revenues of approximately $70,000 annually.  This level of funding cannot support the activities and improvements necessary to maximize the potential of Burbank�s downtown.  Also, while the current BID is comprised of core downtown businesses, it excludes major regional draws such as IKEA and the Media City Center.

Staff has received suggestions from members of the existing BID to consider the formation of a new Property-based Business Improvement District.  Staff had further meetings with local business leaders regarding the feasibility of transitioning from a tenant-based to a property-based BID in order to expand participation and increased funding.  As a result, in September of 2002, the Burbank Redevelopment Agency approved the funding for a contract with Downtown Resources, a firm that has successfully developed PBIDS throughout California.

A Downtown Burbank PBID Steering Committee was subsequently formed to work with Downtown Resources on the development of a Downtown Burbank Management District Plan. The Steering Committee held monthly meetings to develop the plan.  In addition, there were numerous meetings with key stakeholders throughout Downtown. In April 2003, the Steering Committee and Downtown Resources presented a draft Management District Plan to property owners to receive their final feedback regarding the plan.  Downtown Resources then made final refinements to the Management District Plan to reflect many of the property owners� comments and suggestions.

A final District Plan was made available and property owners representing 51% of the proposed assessment have signed a petition to initiate the special assessment proceedings (Exhibit �A�). The map shown as Exhibit �B� illustrates the location of the owners who have signed the petition. In addition, the City and Redevelopment Agency have approved the development of two projects on what was known as �Old Police Block.  As part of the agreements with the two developers (the Olson Company, and Cusumano Real Estate Group), they are to participate in the proposed PBID.  However, since these properties are currently still owned by the Agency, the two entities were unable to sign the petition.  Their proposed assessment would represent an addition 1.1% towards the proposed petition. 

It is also recognized that the PBID is a partnership relationship with the City and Redevelopment Agency.  In fact, state law requires public agencies to participate in the PBID, if approved, including the payment of assessments (see Management District Plan section below).  If the Agency and City sign off on the petition, the total percentage of petitioners would represent 66.33% of the entire district.

If the City approves the initiation of proceedings, ballots will be sent out to all property owners within the proposed District to vote on whether to approve the formation of the PBID. The City will also be authorizing the setting of a noticed hearing on the proposed PBID on July 22, 2003.  At that time, the City Council will accept the ballots and consider the final approval of the PBID.

MANAGEMENT DISTRICT PLAN

The Management District Plan outlines major components of the PBID including: the proposed boundaries; service plan and budget; the proposed assessment formula (engineer�s report); and, the proposed governance of the organization (Exhibit �C�).

District Boundaries

As shown in Exhibit �D�, the proposed boundaries include all of Downtown as generally described as Burbank Boulevard to the north, Glenoaks Boulevard to the east, Verdugo Avenue to the south and the I-5 freeway to the west.  In addition, it includes the area known as the Downtown Burbank Station (formerly the Regional Intermodal Transportation Center, or RITC).

Service Plan and Budget

The Plan proposes a number of capital improvements as well as service programs such as maintenance, promotions and administration.  The Plan proposes a 5-year budget, which is the maximum length that a PBID may be established, before a PBID needs to be reestablished.   While some of the capital improvements may be installed during the first year, the budget illustrates them over a five year period.  It is also anticipated that the Redevelopment Agency will supplement the cost for two capital items, Smart Parking and Wayfinding/Signage.  Therefore, while the PBID will pay $300,000 toward Smart Parking ($60,000 per year), the Agency is anticipated to pay an additional $350,000 toward Smart Signage for a total amount of $650,000.  (The Agency/City is planning to obtain grant funding).  In addition, the Agency is paying $100,000 toward preparing the sign poles for the new wayfinding signs. The following summarizes the budget on an annual basis:

            CAPITAL IMPROVEMENTS

                        Smart Parking                                                            $  60,000

                        Wayfinding                                                                  $  60,000

                        Street/Paseo Upgrades & Holiday Decorations    $120,000                                    

            MAINTENANCE/SECURITY                                                $110,000

            PROMOTIONS, ADVERTISING, EVENTS, ETC.              $250,000

            ADMINISTRATION and ADVOCACY                                  $  95,000

            CONTINGENCY RESERVE                                                  $  25,000

                        TOTAL ANNUAL BUDGET                                    $720,000

Assessment Formula

The assessment formula should be designed to be fair, balanced, and commensurate with benefits received.  The assessment formula can be in many forms such as land square footage, building square footage, and linear front footage.  For this PBID, it is proposed that the PBID be primarily based on land square footage.  An additional linear front footage assessment is proposed for the properties along San Fernando Boulevard between Magnolia Boulevard and Verdugo Avenue recognizing they may have some additional benefit per the plan.

The proposed assessment is $.16 per square foot of land per year, and $2.00 per linear front footage along San Fernando Boulevard south of Magnolia Boulevard.  For example, an owner with a 10,000 square foot parcel and 50 feet of front footage on San Fernando Boulevard would pay $1,600 (land), and $100 front footage, for a total of $1,700 per year.

It was also recognized that certain land uses should pay a lesser rate, and others should be exempted all together.  The Plan therefore proposes that industrial uses only pay 50% of the above assessment, and that residential uses and non-profits such as the YMCA and Salvation Army be exempted.

Finally, it is important to note that governments are not exempted from paying the assessments (even if they are non-profit) per the PBID law.  In addition, staff believes that it is important that the City and Agency demonstrate they are a partner in this PBID organization.  Therefore, the City, Redevelopment Agency and other government jurisdictions will be assessed at the same $.16 formula.  However, it is recommended that the Agency pick up the assessment costs for both the City of Burbank, and the Burbank Unified School District. The City�s annual assessment is estimated to be $81,100, and the School District�s assessment is approximately $6,700 per year.  With the Agency�s assessment of $35,200, the total annual cost to the Agency would therefore be approximately $123,000.   In other words, the Agency would pay a total of $615,000 over five years, while the private property owners would raise $2,985,000 over the same time.  As part of the City and Redevelopment Agency�s actions, it is recommended that they direct the City Manager and Executive Director to sign the proposed petition.

Governance

One of the issues that came up during the process of preparing the plan was how the various property owners would be represented as part of the PBID.  Some Village District owners were concerned that the large property owners in the Mall District (Crown Realty and Development and IKEA) may dominate the administration of the District.  Likewise, the large owners desired to have substantial representation, since they were paying a large share of the assessment.  It was also recognized that the City and Agency should have representation, and that there should be some at-large representation.  The Plan therefore recommends that the ultimate Board of Directors of the organization should have the following nine-member board.

            2 - Representing Businesses or Properties from the Village area

            2 - Representing the City and Redevelopment Agency

            2 � Representing the Mall area, (the Mall and IKEA)

            1- Representing at Large, Large Property Owners

            1 � Representing at Large, Small Property Owners

            1 � At Large, Representing the Broader Business Community

FISCAL IMPACT:

The City is being asked to consider initiating the proceedings for formation of the PBID, therefore, there will be no impact at this time.  Should at the actual hearing, the City Council approve the proposed PBID, the Redevelopment Agency would be assessed $123,000 per year for five years, or a total of $615,000.  The private property owners would be assessed $2,985,000 over five years.  The total district-wide budget would therefore be $3,600,000 over the five-year period.

CONCLUSIONS:

As mentioned before, a comprehensive strategy for the revitalization of Downtown Burbank will require a broad level of property and business owner support including a dedicated funding source to be successfully implemented.  The proposed PBID offers a downtown-wide voice to owners and businesses, backed-up with funding to ensure a vital downtown area.  Should the owners at the end of the five-year Plan no longer want to participate in the PBID, the district would automatically dissolve, unless a majority wished to continue the PBID.  Thus, it is in their collective interest to see that the Plan is ultimately successful.

RECOMMENDATION:

It is recommended that the City Council and Redevelopment Agency to take the following actions: 1) By motion, authorize the City Manager and Executive Director to sign the proposed petition on behalf of the City and Redevelopment Agency; 2) Direct the preparation of agreements for the Agency to pay the annual assessments on behalf of the City and School District; 3) Adopt the City Resolution of Intention to initiate the proceedings for the proposed Business Improvement District, and authorize the City Manager to vote for the District; and, 4) Adopt the Agency Resolution authorizing the Executive Director to vote for the District.

EXHIBITS:

A         List of Petition Signatories

B         Map of Signatories

C         Management District Plan

D         Map of Proposed BID

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