AGENDA REPORT
TO: Jestin D. Johnson FROM: Ashleigh Kanat
City Administrator Director, Economic &
Workforce Development
Department
SUBJECT: Temescal/Telegraph Business
Improvement District – Public
Hearing
DATE: June 25, 2024
City Administrator Approval Date:
RECOMMENDATION
Staff Recommends That The City Council Conduct A Public Hearing And Upon Conclusion Adopt A Resolution Making A Determination Regarding Any Protests Received For The Temescal/Telegraph Business Improvement District (Temescal/Telegraph BID), Approving The Temescal/Telegraph BID Management District Plan, Approving The Assessments For The Temescal/Telegraph BID, Directing Recording Of The Proposed Assessment District Boundary Description, Establishing The Temescal/Telegraph Business Improvement District, And Appointing The Advisory Board For The Temescal/Telegraph BID.
EXECUTIVE SUMMARY
Adoption of the proposed resolution will enable the formation of the Temescal/Telegraph Business Improvement Management District (Temescal/Telegraph BID). These types of property-based Business Improvement Districts (BIDs) provide opportunities for property owners to support the vitality of their commercial neighborhoods. The Temescal/Telegraph BID was formed in 2005, pursuant to Resolution No. 78730 C.M.S. for a period of 10 years, ending in 2014. The Temescal/Telegraph BID was renewed in 2015, pursuant to Resolution No. 85148 C.M.S., for a period of 10 years, ending in 2024.
The proposed Temescal/Telegraph BID would generate special assessment revenues of approximately $815,958.00 per year, with possible annual increases up to seven (7) percent, for a period of 10 years, or up to approximately $11.2 million over the 10-year life of the district.
Effective dates of the assessment will be from January 1, 2025, through December 31, 2034.
The use of these funds would be consistent with the Temescal/Telegraph Business Improvement District Management District Plan (Exhibit A to the proposed resolution) and could include but is not limited to safety, cleaning, marketing, government/community relations, administration and management services within the district.
Jestin Johnson (Jul 2, 2024 13:03 PDT)
Jul 2, 2024
Jestin D. Johnson, City Administrator
Subject: Temescal/Telegraph Business Improvement District – Public Hearing Date: June 25, 2024 Page 2
City Council
July 16, 2024
The City Council may approve formation of the Temescal/Telegraph BID and the assessment if, at the close of the July 16, 2024 Public Hearing, a majority protest is not established. A majority protest exists if, upon the conclusion of the Public Hearing, ballots submitted in opposition to the establishment of the Temescal/Telegraph BID and corresponding property assessment exceed the ballots submitted in favor. In tabulating the ballots, the votes must be weighted according to the proportional financial obligation upon the affected property. If, however, a majority protest does not exist, then the City Council may consider adopting the proposed resolution to establish the proposed BID.
BACKGROUND / LEGISLATIVE HISTORY
In 1999, the City Council adopted the City of Oakland (City) Business Improvement Management District Ordinance (Ordinance No. 12190 C.M.S., codified as Chapter 4.48 of the Oakland Municipal Code) which allows for the formation of property-based special assessment areas, called BIDs. BIDs are geographically defined and are managed through a private/public partnership which administers and oversees enhancement services, activities and programs above the existing municipal services. The management of the BID services are paid for through the special assessment charged to all property members within the district.
The City Council also authorized initiation of the Neighborhood Business Improvement District Program in 1999 (Resolution No. 75323 C.M.S.) to assist neighborhood representatives in their efforts to form such districts.
On July 20, 2004, the City Council adopted Resolution No. 78730 C.M.S. to form the Temescal/Telegraph BID in 2005, for a period of 10 years, ending December 31, 2014. On July 29, 2014, the City Council adopted Resolution No. 85148 C.M.S. to renew the Temescal/Telegraph BID of 2015. The Temescal/Telegraph BID has been providing services above the City’s baseline level of service to improve the neighborhood experience within the boundary of the district by making the area cleaner and more inviting and enhancing the economic vitality of the Temescal commercial district for 20 years.
Pursuant to those efforts, on May 21, 2024, the City Council adopted Resolution No. 90256 C.M.S., a Resolution of Intention (1) Declaring An Intention To Form The Temescal/Telegraph Business Improvement District (Temescal/Telegraph BID); (2) Granting Preliminary Approval Of The Temescal/Telegraph BID Management Plan; (3) Directing Filing Of The Proposed Temescal/Telegraph BID Assessment District Boundary Description With The City Clerk; (4) Directing Distribution Of A Ballot To All Affected Property Owners In The Proposed Temescal/Telegraph BID To Determine Whether A Majority Protest Exists; (5) Scheduling A Public Hearing For July 16, 2024.
Section 4.48.190 of the Oakland Municipal Code requires the City Council to appoint an Advisory Board which shall make a recommendation to the City Council on the expenditure of revenues derived from the levy of assessments, on the classification of properties applicable, and on the method and basis of levying the assessments. The Oakland Municipal Code allows the City Council to designate existing advisory boards or to create a new advisory board for that purpose. The proposed Advisory Board for the proposed Temescal/Telegraph BID will be the Board of Directors that administers the existing Temescal/Telegraph Business Improvement District; the recommended new Temescal/Telegraph BID was prepared at its direction.
Jestin D. Johnson, City Administrator
Subject: Temescal/Telegraph Business Improvement District – Public Hearing Date: June 25, 2024 Page 3
City Council
July 16, 2024
ANALYSIS AND POLICY ALTERNATIVES
The Temescal/Telegraph BID has played a key role in the on-going economic development of the Temescal/Telegraph commercial district.
The Temescal/Telegraph BID is one of eight property-based BIDs in Oakland. Collectively, these districts have contributed to Oakland’s economic development and continue to contribute approximately $9.6 million per year in property tax assessments that are utilized for enhanced services and activities supporting marketing, placemaking, security, cleaning services, and economic development activities focused on retention and business attraction. As more mixed- use development occurs in Oakland commercial zones, residential property owners have also begun to benefit from special benefit services provided by BID special assessment districts. As such, the cumulative impact of BIDs continues to grow, making them an increasingly useful tool for supporting broader revitalization efforts in Oakland’s commercial neighborhoods.
The initiative taken by district stakeholders to continue the proposed special assessment district also represents a productive step towards community self-empowerment as well as a viable opportunity to cultivate additional public-private investment partnerships and enhanced economic development activity in the City’s core commercial neighborhoods.
If approved by the affected property owners under the procedure set forth primarily in Oakland Municipal Code section 4.48.070, the proposed Temescal/Telegraph BID will generate approximately $815,958.00 in Fiscal Year (FY) 2025-26, and up to approximately $11.2 million over the 10-year term of the district, if allowable seven percent annual increases to the assessments are taken starting in year two FY 2026-27.
Given the limitations on municipal funding and a growing need to identify alternate economic development revenue sources, the proposed special assessment district could be considered a reasonable leveraging of public funds. Special benefit services to be provided by the proposed district are intended to improve the conditions of the affected commercial corridor and to stimulate ongoing economic revitalization consistent with City Council goals and objectives.
Formation of the Temescal/Telegraph BID advances the Citywide Priority of housing, economic and cultural security.
FISCAL IMPACT
The one property within the proposed district for which the City would be obligated to pay the assessment in the initial approximate amount of $2,374 per year is APN 014-1219-003, Temescal Library. This expense will be paid from General Purpose Fund (1010), Economic Development Organization (85411), Taxes & Assessments Accounts (53511), Business Improvement District Project (1000147), Citywide Activities Program (IP50). If the City acquires additional affected properties during the course of the BID’s proposed 10-year term, then funding sources for related assessments owed will be identified as part of the City’s ongoing biannual and mid-cycle budget development processes.
There are costs of City staff time to provide technical assistance to the BID formation effort and to ongoing administration of the citywide BID Program which is part of the adopted City’s Budget supporting the BID Program. As the program continues to grow, additional resources or revenue offset from the BID agreements may need to be evaluated as part of the City agreements with Jestin D. Johnson, City Administrator
Subject: Temescal/Telegraph Business Improvement District – Public Hearing Date: June 25, 2024 Page 4
City Council
July 16, 2024
the business improvement districts and would also need to be included in future budget development processes.
If the Temescal/Telegraph BID and corresponding special property assessment are approved, the City Treasury Division would provide invoices to any tax-exempt entities that are not on the County of Alameda's property tax roll, which, in addition to the property owned by the City, include one owned by Pacific Gas & Electric, three by the San Francisco Bay Area Rapid Transit, three by the state of California, and one by Oakland Housing Authority. For taxable entities, the County of Alameda would add the assessment as a line item to the annual property tax bill of each affected property owner and remit the amount collected to the City and booked into Miscellaneous Trust Fund (7999), Treasury Operations Organization (08721), Pass Thru Assessments Account (24224), DP080 Administrative Project (1000007), Temescal BID Program (TBID). The City, in turn, will disburse the funds to the district, pursuant to a written agreement between the City and the district's designated non-profit management corporation.
The written agreement between the City and the designated non-profit BID management corporation also provides for an administrative fee to be charged to the Temescal/Telegraph BID to help recover the City's costs of administering the district, including costs incurred by the Treasury Division for providing the services described above.
Lastly, if the Temescal/Telegraph BID is formed, program guidelines state that the City is expected to maintain a base level of service within the district equivalent to the level prior to formation of the assessment district. Maintaining baseline services, however, commits no additional City funds beyond what already exists. Proportional reductions to baseline services may occur resulting from changes in the City's overall financial condition.
PUBLIC OUTREACH / INTEREST
For the City Council to adopt the proposed resolution establishing the Temescal/Telegraph BID, enabling legislation requires completion of a required public hearing, including legal noticing, and a majority protest procedure as described above. District stakeholders also performed the outreach needed to secure property owner petitions sufficient to trigger the above-referenced majority protest procedure (i.e. supportive petitions signed by property owners representing more than 30 percent of the total Temescal/Telegraph BID proposed assessments were submitted to the City in April 2024). City and district stakeholder outreach is also ongoing to answer any questions affected property owners may have regarding the district formation process and to encourage the highest level of participation possible for the related special election (i.e. the majority protest procedure).
COORDINATION
The City Controller and Revenue Management Bureaus of the Finance Department, the Office of the City Attorney and the City Clerk’s Office were consulted in the preparation of this report.
SUSTAINABLE OPPORTUNITIES
Economic: The proposed assessment will fund activities which are intended to support the eventual increase of property, sales, and business tax revenues, as well as increased job Jestin D. Johnson, City Administrator
Subject: Temescal/Telegraph Business Improvement District – Public Hearing Date: June 25, 2024 Page 5
City Council
July 16, 2024
opportunities and on-going economic development in the Temescal/Telegraph BID commercial district.
Environmental: The proposed levy will enable the district to provide a safe, clean and walkable district of the affected commercial neighborhood by providing special benefit services such as enhanced sidewalk cleaning, graffiti removal, and trash removal along the affected commercial corridor.
Race & Equity: The Temescal/Telegraph BID is not in an economically disadvantaged neighborhood under the Oakland Department of Transportation Equity Toolkit. However, in 2022, the City entered into a contract with Urban Place Consulting (UPC) to provide organizational assistance to underserved commercial corridors, which may include performing BID feasibility studies. With direction from the City, UPC has been engaging groups of business owners and property owners in underserved commercial corridors throughout the City, providing education not just on BID formation, but on alternative means of formal organization, such as establishing nonprofit status or a merchant’s organization, that can accomplish many goals of a commercial district while serving as interim steps to BID formation.
ACTION REQUESTED OF THE CITY COUNCIL
Staff Recommends That The City Council Conduct A Public Hearing And Upon Conclusion Adopt A Resolution Making A Determination Regarding Any Protests Received For The Temescal/Telegraph Business Improvement District (Temescal/Telegraph BID), Approving The Temescal/Telegraph BID Management District Plan, Approving The Assessments For The Temescal/Telegraph BID, Directing Recording Of The Proposed Assessment District Boundary Description, Establishing The Temescal/Telegraph BID, And Appointing The Advisory Board For The Temescal/Telegraph BID.
For questions regarding this report, please contact Yanira Cortez, Urban Economic Analyst II, at 510-238-6683.
Respectfully submitted,
ASHLEIGH KANAT
Director, Economic & Workforce
Development Department
Reviewed by:
Eric Simundza, Urban Economic Analyst IV,
Business Development
Ashleigh Kanat (Jul 1, 2024 21:52 PDT)
Ashleigh Kanat
Jestin D. Johnson, City Administrator
Subject: Temescal/Telegraph Business Improvement District – Public Hearing Date: June 25, 2024 Page 6
City Council
July 16, 2024
Prepared by:
Yanira Cortez, Urban Economic Analyst II,
Business Development