Hawthorne City Council
May 28, 2024

Business Improvement
District Basics
May 28, 2024
Hawthorne City Council
Presented by
Andrew L. Jared
What is a BID/PBID?
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BID = generic term for Business Improvement Districts
PBID= Parking and Business Improvement District/
Property and Business Improvement District
A way for cities to collect revenue for specific purposes to help fund economic development Collected from businesses/property owners in a defined area 5/24/2024 © 2024 Colantuono, Highsmith & Whatley, PC 3
• ~200 BIDs in California
• ~100 Property based
• ~70 Tourism based
• ~30 Business based
• Los Angeles (40)
• San Francisco (15)
• Long Beach (11)
• Santa Monica (5)
• Pasadena, Pomona,
Glendale, Burbank,
Torrance (pending)
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• Security services
• Sanitation
• Graffiti removal • Transportation Alternatives
• Parking Management • Homeless Outreach
• Marketing
What is a BID/PBID? • District created by a city (Consultant hired) • Defined area (non-citywide; commercial focus)
• Management Plan
• Assessment levied on businesses and/or
property owners
• Collected on tax rolls
• Owner’s association created; non-profit
corporation
• Members are the businesses/property owners
• OA operates district through a contract with the
city
• Manages expenditure of funds for programs
• District is not a separate legal
entity
• Program of the city managed by OA
• District does not regulate the use
of property or conduct • City does not run the district, but works closely with the district • Formation costs recouped from assessments
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What is a BID/PBID?
Two Main Laws:
• Parking and Business Improvement Area Law of 1989 (the 1989 Law) • Streets and Highway Code section 36500
• Property and Business Improvement District Law of 1994 (the 1994 Law) • Streets and Highway Code section 36600 5/24/2024 © 2024 Colantuono, Highsmith & Whatley, PC 6
1989 Law vs. 1994 Law
• Assessment on businesses • Assessment on businesses,
properties, or both • No assessment on properties
zoned solely for residential or
agricultural use
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• Self-Assessment, not City-Assessments: Majority Vote Businesses/Properties • Augments city services; May not supplant city services • Term of years (10 yrs); Can be renewed
• Must define Improvements and Activities in Management Plan Laws Governing Expenditures
California
Constitution
Streets &
Highways Code
Management
District Plan
State Law re
Non-Profit
Corporations
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California Constitution
• Proposition 218
(assessments against
property)
v.
• Proposition 26
(assessments against
businesses)
“A charge imposed for a
specific benefit conferred
or privilege granted directly
to the payor that is not
provided to those not
charged, and which does
not exceed the
reasonable costs to the
local government of
conferring the benefit or
granting the privilege”
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Management District Plan (Example)
• 55% on Sales & Marketing
• Promote assessed businesses as
tourist, meeting, and event destinations
• 20% on Destination Development • E.g., similar to public works projects
• 20% on Administration
• Administrative staffing costs, other administrative costs (insurance, legal, accounting)
• NOT CITY COSTS
• 5% on Contingency / Reserve
• To account for uncollected
assessments
5/24/2024 © 2024 Colantuono, Highsmith & Whatley, PC 10 “Improvements” Include
• Parks
• Fountains
• Planting areas
• Placemaking
• Parking facilities
• Benches, booths, kiosks, display cases, pedestrian shelters and signs • Public Area Decorations
• Ramps, sidewalks, plazas, and pedestrian malls
5/24/2024 © 2024 Colantuono, Highsmith & Whatley, PC 11 • Trash receptacles and public restrooms
• Rehabilitation or removal of existing structures
• Facilities or equipment to enhance security • Closing, opening, widening, or narrowing of existing streets • Lighting and heating facilities
“Activities” Include
5/24/2024 © 2024 Colantuono, Highsmith & Whatley, PC 12 • District branding
• Marketing programs
(includes digital, social
media)
• Events: concerts,
festivals, attractions
“Destination Development” Includes
• Wayfinding signage
system
• Infrastructure
improvements
• Live music venue, to
attract overnight visitors
• Gateway enhancements
• Art and cultural projects, to attract overnight
visitors
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