MEMORANDUM DATE: November 4, 2009 TO: City Council Members FROM: Russell Weeks RE: Notice of Intention to Designate Central Business Assessment Area (CBIA-10) CC: Cindy Gust-Jenson, David Everitt, Ed Rutan, Frank Gray, Dan Mulé, Gordon Hoskins, Mary De La Mare-Schaefer, Bob Farrington, Jennifer Bruno, Boyd Ferguson, Marina Scott, Brent Beck, Garth Limburg, Susan Finlayson This memorandum pertains to a proposed resolution that would start a process to designate an area encompassing downtown Salt Lake City as an “assessment area.” Monetary assessments on property within the area would be used for economic promotion activities aimed at benefiting the assessed properties. The City Council will hold a briefing on the proposed resolution at its November 10 work session. The work session is scheduled to start at 4 p.m. or immediately after the monthly meeting of the Salt Lake City Redevelopment Agency Board of Directors. The work session will be held in Room 326 of the City & County Building, 451 South State Street. The City Council will formally consider the resolution at its November 17 meeting. Adopting the resolution would set the stage for the Administration to notify property owners about the proposed assessment area and set a January 12, 2010, date where property owners may protest the designation of the area. It should be noted that Salt Lake City has designated downtown assessment areas for economic promotion purposes since 1991. Two other things should be noted. First, the assessment area’s borders would expand under the Administration’s proposal. Second, the City will issue a request for proposals to interested parties to manage economic promotion activities in the assessment area, if the City Council ultimately decides to desginate the area. The Downtown Alliance has managed economic promotion activities in all previous and current downtown assessment areas. OPTIONS o Adopt the proposed resolution. o Do not adopt the proposed resolution. POTENTIAL MOTIONS o I move the City Council adopt the resolution declaring the City’s intention to designate an assessment area to promote business and economic development activity within the borders described in the Notice of Intention to Designate an Assessment Area attached to the resolution and setting the date of January 12, 2010, to receive or hear protests to the creation of the assessment area. 1 o I move that the City Council consider the next item on the agenda. KEY POINTS • The current assessment area expires April 15, 2010. • According to the Administration transmittal, the proposed assessment area would generate about $2,850,922 over a three-year period – roughly $950,000 per year. Of that $2,612,757 would be used by the entity awarded the contract to manage the district. The City would use $152,638 of the assessments for its own management fees, legal fees, and publishing, postage, and recording costs over three years. In addition, $85,527 would be held in reserve. • The current assessment rate is .0014726949. The proposed assessment rate is .001411402. • The proposed assessment rate is based on two things – an increase in value of properties within the proposed area between 2007 and now, and a proposed expansion of the assessment area. • The current area’s boundaries are: North Temple from State Street to 500 West Street. 500 West Street from North Temple to 400 South Street. 400 South Street from 500 West Street to 200 East Street. 200 East Street from 400 South Street to 100 South Street. 100 South Street from 200 East Street to State Street. State Street from 100 South Street to North Temple. 200 South Street from 200 East Street to 300 East Street. • The proposed area’s boundaries are: North Temple from State Street to 700 West 700 West from North Temple to 500 South 500 South from 700 West to 600 West 600 West from 500 South to 400 South 400 South from 600 West to 200 East – including parcels on both sides of the street 200 East from 400 South to South Temple Street – including parcels on both sides of the street. South Temple from 200 East to State Street State Street from South Temple to North Temple • Under state law, properties cannot be added to the assessment area if they were not included in the Notice of Intention Resolution. However, the City Council can delete properties at its discretion. • If property owners making up 50 percent or more of a proposed area protest its designation, the area cannot be designated as an assessment area. • Property parcels valued at less than $15,000 as well as residential, ecclesiastical, and government- owned properties are exempt from assessment, except those that agree in writing to be assessed.i • The economic improvement district first was created in 1991, and the City Council renewed the district in 1994, 1997, 2000, 2003, and 2007. The Administration is following procedure and policy in seeking bids from interested parties to manage economic promotion activities in the assessment area. Since 1991 the City has awarded a three-year contract with an option to renew the contract for three more years. 2 ISSUES/QUESTIONS FOR CONSIDERATION • In conjunction with the proposed designation of the assessment area, the Administration plans to issue a request for proposals to manage the assessment area (subject to City Council adoption of the mechanisms designating the area). As of the writing of this memorandum, the details of the timetable for issuing the request for proposals remained to be addressed. The Administration has indicated that it will know more about the timetable next week, probably as early as Monday. • The current management organization merged with the Salt Lake Chamber in 2003. If the City selects another management entity, how will the entity work with all parties to promote economic development? DISCUSSION/BACKGROUND The current practice of creating assessment areas downtown to promote business and economic development stems from the efforts of downtown businesses to find a way to increase business and economic development there. The 1988 Regional/Urban Design Assistance Team study noted that an “unfortunate combination of factors” in years previous to 1988 had “discouraged” the construction of new office and mixed use buildings in the city’s core. One of the factors the study listed was, “The lack of an organized constituency that promotes continuous and serious renewal in the downtown in a determined and unrelenting way.” The original group to create an organized constituency to address downtown issues was led in part by Snow, Christensen and Martineau partner John Gates and the late John Schumann of Schumann Capital Management. At the time Mr. Schumann was the chair of the Salt Lake City Planning Commission. Mr. Gates, Mr. Schumann and others sought to establish a broad-based organization to address downtown issues and “to strengthen our Downtown area by promoting growth, fostering development, encouraging activities, and improving the general environment of the downtown area through open communication between property owners, business owners, tenants, residents, and governmental agencies involved in the downtown district.” The resulting group sought to consolidate the efforts of several organizations that represented downtown business interests including the Capital City Committee, which had organized to find a consensus about how to develop what has become Gallivan Square, and the Central Business Improvement District. The Downtown Merchants Association and the Salt Lake Chamber of Commerce retained their own organizational structures, but the chair of the Retail Merchants Association, and the president and CEO of the Chamber of Commerce were made voting trustees of the Alliance, as was the Mayor of Salt Lake City. In 1991, the Utah Legislature enacted a law allowing municipalities to create assessment areas to promote economic activities, and the City Council created the first assessment area. To receive the annual assessment, the management organization must sign a contract with the City. In turn, the City has a responsibility to see that assessment funds are well-managed. It should be noted that the current organization under contract with the City – The Downtown Alliance – augments revenue from the City assessment with revenue derived from sponsorships, earned income, grants, foundations and other sources. The Administration estimates that about 35 percent of The Downtown Alliance’s total revenue comes from sources other than assessments.ii In July 2003, the Downtown Alliance Board of Trustees adopted a motion to merge the Alliance with the Salt Lake Chamber of Commerce after several months of negotiations. Since the merger, the Alliance has continued to promote the downtown as a regional shopping and entertainment area. It has developed and manages events such as First Night and the Farmer’s Market. It also has worked with the City in commissioning and 3 working on a variety of studies including the Downtown in Motion ransportation master plan study and the Downtown Rising initiative. i Administration transmittal, October 27, 2009, Page 3. ii Ibid. 4 FRANK l9. GRAY RALPH BEEKER DIRCUYUR DEPARTMENT OF COMMUNITY ECONUMIC DEVELOPMENT - MAmR OFFICE [3F THE DIRECTOR MARY PE LA MAREBCHAEFER aEFUlY DIREUTOA ROBERT FARRlhIOTOH, JR. UKPUTY DIRECTOR CITY COUNCIL TRANSMITTAL *--/ Date Received: DtbLrab! -dl Date Sent to City CounciI: 10 4 I TO: SaIt Lake City CounciI DATE: October 26,2009 Carlton Christensen, Chair FROM: Frank Gray, Community & Econ Development Department Director RE: Notice of Intention to Create Central Businessy mprovement Area (CBIA - 10) STAFF CONTACT: Bob Farrington, Economic Development Director and CED Deputy Director, at 80 1-535-7945 or bob. [email protected] RECOMMENDATION: The City CounciI adopts the Notice of Intention to create the Central Business Improvement ha1 0 (CBXA- 1 0) DOCUMENT TYPE: BUDGET IMPACT: Funding for the Area wilI be provided by property owner assessments. The anticipated total income from the three-year assessment for the Area is approximately $2,850,922.