REPORT TO THE CITY COUNCIL
FROM: JERRY DYER, Mayor
Office of Mayor & City Manager
BY: GREGORY A. BARFIELD, Assistant City Manager
Office of Mayor and City Manager
LUPE PEREZ, Director
Economic Development Department
SUBJECT
Title
HEARING to approve items related to the renewal of the Downtown Fresno Property and Business Improvement District (DFPBID) upon verification of sufficient number of valid petitions collected to support the renewal of the district:
1. RESOLUTION - of Intention to Renew the DFPBID; and setting the public hearing for THURSDAY, JULY 21, 2022, at 9:00 am.
Body
RECOMMENDATION
Staff recommends that the Council approve the attached Resolution of Intention to renew the Downtown Fresno Property and Business Improvement District (DFPBID) and set a public hearing thereon for July 21, 2022, at 9:00 A.M.
EXECUTIVE SUMMARY
The DFPBID was formed in 2010 for a five (5) year term ending on December 31, 2015. The DFPBID was subsequently renewed for another seven (7) year term. As the DFPBID reaches the end of its term, property owners have expressed a desire to renew the program. The DFPBID will continue to provide a steady funding source to the Downtown Fresno Partnership (DFP) through an assessment levied on property owners within the DFPBID. The Property and Business Improvement District Law of 1994 authorized creation of the DFPBID, and requires that a municipal entity renew the DFPBID. The DFP will continue to serve as the DFPBID’s Owner’s Association. The Owner’s Association is charged with managing funds and implementing programs in accordance with the attached PBID Management District Plan.
BACKGROUND
The Property and Business Improvement District (PBID) is a common and important tool for downtown revitalization throughout the U.S. Through a PBID, property owners pool their resources, talents, and energy to address the unique needs of a defined area. PBID revenues generated through special assessments on property are expended in accordance with the proposed Management District Plan (MDP).
PBIDs are found in all the state’s largest urban areas, including the downtowns of comparably sized cities such as Sacramento, San Jose, Stockton, and Long Beach. PBIDs have also been an important component of revitalization in downtowns nearby such as Visalia and Tulare. PBIDs provide two fundamental benefits to the downtowns they serve; the more tangible of these is the services which range from economic development to greater cleanliness to enhanced safety, or for physical improvements such as signage or façade improvement. The scope of services provided in any PBID is a function of the assessment level supported by the property owners, and the MDP the owners adopt to guide the use of funds. The less tangible, but equally important, benefit of a PBID is the effect of uniting property owners in a common purpose.
Under the provisions of Proposition 218 in the California Constitution, government agencies must pay assessments in PBIDs and other special benefit districts, just like private property owners, unless they receive no benefit. In the case of the DFPBID, the City of Fresno and the County of Fresno have dedicated board seats and are included in the assessment.
State law establishes an initial limit of five years on the existence of a new PBID. After five (5) years, PBIDs can be renewed through a majority vote of the assessed property owners for a term of up to ten (10) years. The PBID can only be renewed by a governing municipal agency. The law requires that property owners who pay more than fifty percent (50%) of the assessment sign petitions indicating their desire to renew the PBID. Upon receipt of sufficient petitions, if the City Council chooses to proceed, it must pass a Resolution of Intent to Renew the District and initiate a Proposition 218 ballot process.
Downtown Fresno PBID
Since the creation of the DFPBID, it has provided visible and valuable benefits to Downtown properties. The DFPBID provides services above and beyond City services. The DFPBID funds have been used for a variety of purposes, including but not limited to hosting host community meetings about the importance of revitalizing downtown, the production of 520 Core events including State of Downtown, Market on Kern, and more, and the launch of the Park Mobile app to assist with parking services in partnership with the City. The DFPBID also assisted businesses with applications for COVID Re-start grants in the wake of the pandemic and re-launched the Downtown Fresno Partnership website with all new branding. Furthermore, the DFPBID hosted regular meetings with downtown merchants to facilitate the sharing of information between law enforcement, City staff, event producers, and more. By dividing Downtown into three distinct services zones, the DFPBID ensures that services are provided when and where needed. These services help make Downtown cleaner, safer, and more prosperous.
In May 2021, a petition drive was launched to renew the DFPBID. These petitions stated precise assessment levels based on a PBID Management District Plan (Plan) which was prepared in collaboration with Civitas. During the petition drive petitions were mailed, emailed, and/or hand-delivered to the respective property owner, along with a map of the proposed district boundary, and a summary of the Plan showing how assessments were calculated and how the DFPBID budget would be composed.
The renewed DFPBID includes parcels in the portion of Downtown Fresno shown on the map in the Plan. The DFPBID is designed to provide specific benefits directly to payors through the following programs: Economic Enhancements, Clean and Safe Initiatives, and Fulton Zone Activation. The goal of these programs will be to improve the economic vitality and physical maintenance of the district, attract new businesses, support existing businesses, and create jobs within the DFPBID boundary.
These services will be funded through the levy of a benefit assessment on real properties within the DFPBID boundary. The DFPBID annual assessment budget for the initial year of its ten (10) year operation is anticipated to be $826,760.82. The annual budget may be subject to an increase in assessment rates of no more than three percent (3%) per year. The assessment funds will be supplemented by non-assessment funds (such as grants and event income), so that the total budget for the initial year is estimated at $863,166.73.
As of today, the DFPBID petitions have been received from the private and public property owners in the district who pay more than fifty percent (50%) of the assessments to be levied indicating their desire to renew the DFPBID. The actions requested of City today is to pass a resolution of intention of the City to renew the DFPBID and to initiate the ballot process and set a public hearing on July 21, 2022. The Council’s approval of the Resolution on May 26, 2022 does not formally renew, or bind the Council to renew, the DFPBID. At the public hearing, the Council may adopt a resolution renewing the DFPBID so long as there is no majority protest among the ballots returned; ballots can be submitted until the time set for the public hearing.
ENVIRONMENTAL FINDINGS
This is not a project for CEQA purposes.
LOCAL PREFERENCE
This action is not subject to local preference.
FISCAL IMPACT
There is no fiscal impact to proceed with the public hearing. All necessary actions to mail ballots to affected parties will be paid by the DFP. If the DFPBID is renewed, under state PBID Law, these funds must be directed to the DFP for administration under the Management District Plan adopted by the property owners. Under the agreement the City will receive and disburse the PBID funds in trust to DFP, after deducting any reasonable and necessary administrative expenses.
The City’s estimated annual PBID assessment would be $112,280.50 in the initial year. This amount may increase up to three percent (3%) per year thereafter. Due to minor changes in zone boundaries and the parking lot assessment rate, this amount is slightly lower than in previous years. The assessment payments would be appropriated during the annual budget cycles. By helping to revitalize the Downtown economy, the PBID funded activities performed under the Agreement have the potential to increase revenues to the City in the form of tax increment, tax receipts, and user fees that could be used to offset annual PBID assessment(s).
Attachments: Resolution of Intention to Renew Downtown Fresno PBID
Management District Plan
DFPBID Boundary Map