City Council
November 12, 2024
AGENDA REPORT
TO: Jestin D. Johnson FROM: Ashleigh Kanat
City Administrator Director, Economic &
Workforce Development
Department
SUBJECT: Ordinance To Modify The
Maximum BID Term From 10
Years to 20 Years
DATE: October 30, 2024
City Administrator Approval Date: Oct 31, 2024
RECOMMENDATION
Staff Recommends That The City Council Adopt An Ordinance Amending Oakland Municipal Code Chapter 4.48 Business Improvement Management Districts Section
4.48.080 To Increase The Maximum Term Length For Business Improvement Management Districts From Ten (10) To Twenty (20) Years
EXECUTIVE SUMMARY
The City of Oakland (City) Business Improvement Management District (BIMD) Ordinance was originally adopted by City Council in late 1999. The proposed legislation would amend the BIMD Ordinance to increase the maximum term length from 10 Years to 20 Years, which would allow any new or renewing Business Improvement District (BID) in Oakland to set a term length for up to 20 years.
BACKGROUND / LEGISLATIVE HISTORY
The concept of BIDs emerged in the U.S. during the late 1970s as a response to declining urban areas. California adopted this model, allowing local businesses to collectively fund improvements in their districts.
In California, there are two separate laws that authorize the formation of a BID: The Parking and Business Improvement Area Law of 1989 (Streets & Highways Code §36500 et seq.) and the Property and Business Improvement District Law of 1994 (Streets & Highways Code §36600 et seq.). These state laws provided the statutory basis for creating BIDs, outlining the processes for formation, governance, and funding.
City Council
November 12, 2024
Jestin D, Johnson, City Administrator
Subject: Ordinance To Modify The Maximum BID Term From 10 Years to 20 Years Date: October 30, 2024 Page 2
In 1999, the City Council approved the BIMD Ordinance (Ord. No. 12190 of 1999, codified as Chapter 4.48 of the Oakland Municipal Code), which established rules and procedures for operation of the BID program. It was subsequently amended by Ordinance No. 13322 C.M.S., July 21, 2015), which allows for the formation of property-based special assessment districts to undertake a range of special benefit services within the assessment area to support the economic viability of affected commercial neighborhoods.
In 1999, the Oakland City Council also authorized initiation of a Neighborhood Business Improvement District Program (Resolution No. 75323 C.M.S.) to further assist business and property owners to form such districts.
On August 16, 2024, City staff received a letter from the Oakland BID Alliance (Attachment A) in support of amending the BIMD Ordinance to extend the maximum term for a BID from 10 years to 20 years. This proposal was originally brought before the Oakland BID Alliance by staff from the Laurel Business Improvement District, which will be seeking to renew in 2025.
ANALYSIS AND POLICY ALTERNATIVES
Section 4.48.080 of the BIMD Ordinance states that the period of time for any BID shall not exceed ten years, which is consistent with the Property and Business Improvement District Law of 1994. However, many other cities in California have adopted increased maximum terms above 10 years. Some cities allow a maximum term of 15 years (e.g., San Francisco, San Leandro, and San Jose), while others allow a maximum term of 20 years (e.g., Richmond, Alameda, and Vallejo). Attachment B lists reference cities with term ceilings above 10 years.
Under the proposed amendment, each BID would determine the most appropriate term for their district, with a maximum term of 20 years. Each BID will continue to define their intended term in the District Management Plan during the BID formation or renewal processes. Any BID would have the option of setting a shorter term if they so choose.
The proposed amendment would provide the BIDs greater stability and predictability, allowing for more ambitious and creative initiatives. Greater investment and borrowing options would be possible with a longer BID term. A 20-year term would open up opportunities to fund larger capital improvements, enabling BIDs to better serve their constituent communities and have meaningful and long-lasting impacts on their districts.
Another benefit of extending BID term lengths is to reduce the costs associated with frequent renewal, which can be significant, especially for smaller BIDs with lower annual budgets. This would allow BIDs to allocate more time and resources to making improvements in their districts.
BIDs need to remain responsive to their assessees, and can be disestablished during their operation, which can be triggered either by a finding of violation by the City Council, or by request of the assessees themselves. Pursuant to the BIMD Ordinance Section 4.48.220, during the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the district who pay 50 percent or more of the assessments levied, the City City Council
November 12, 2024
Jestin D, Johnson, City Administrator
Subject: Ordinance To Modify The Maximum BID Term From 10 Years to 20 Years Date: October 30, 2024 Page 3
Council shall pass a resolution of intention to disestablish the district, followed by a noticed public hearing on disestablishment.
Administration of the BID program advances the Citywide Priority of housing, economic and cultural security. BIDs provide additional resources (e.g., public safety, marketing, and cleanliness) that help make commercial corridors vibrant places that are consistently active, better serving the needs of Oakland’s business owners and residents.
FISCAL IMPACT
The primary fiscal impact of the proposed amendment would benefit the BIDs themselves, reducing the costs of renewal and providing better terms for borrowing over a longer district lifespan. However, since City staff must facilitate multiple resolutions and a public hearing for each BID renewal effort, a reduction in the frequency of BID renewal efforts would reduce strain on existing City resources and staff time.
PUBLIC OUTREACH / INTEREST
Adoption of the proposed BIMD Ordinance amendments does not require City staff to conduct public outreach other than the required posting on the City’s website. However, the Laurel Business Improvement District did perform outreach necessary to procure a letter of support from the Oakland BID Alliance, which represents all current BIDs in the City.
COORDINATION
The Budget Bureau and the Office of the City Attorney were consulted in the preparation of this report, legislation, and attachments, as well as the Oakland BID Alliance and the Laurel Business Improvement District.
SUSTAINABLE OPPORTUNITIES
Economic: BID assessments fund activities that are intended to support the eventual increase of property, sales, and business tax revenues, as well as increased job opportunities, and ongoing economic development of affected commercial districts.
Environmental: BID assessments fund special benefit services such as litter pickup, sidewalk steam cleaning, landscaping, public art, directional signage, and public safety capital improvements, which are intended to increase cleanliness of the applicable districts and contribute to the provision of safe, walkable commercial corridors.
Race & Equity: While the majority of existing BIDs are not located in high priority neighborhoods as identified in the OAKDOT equity toolbox, the Lake Merritt-Uptown, Downtown, and Chinatown BIDs are located in such areas and so utilize assessments to support safety, cleaning, marketing, community identity and special event programs for the high priority areas within their boundaries. Because BIDs contribute to community empowerment, the City Council
November 12, 2024
Jestin D, Johnson, City Administrator
Subject: Ordinance To Modify The Maximum BID Term From 10 Years to 20 Years Date: October 30, 2024 Page 4
City Council entered into a contract with Urban Place Consulting (UPC) to provide organizational assistance to underserved commercial corridors, which includes 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 Adopt An Ordinance Amending Oakland Municipal Code Chapter 4.48 Business Improvement Management Districts Section 4.48.080 To Increase The Maximum Term Length For Business Improvement Management Districts From Ten (10) To Twenty (20) Years.
For questions regarding this report, please contact YANIRA CORTEZ, URBAN ECONOMIC ANALYST II, at 510-238-6683.
Respectfully submitted,
Ashleigh Kanat (Oct 31, 2024 14:43 PDT)
ASHLEIGH KANAT
Director, Economic & Workforce Development
Department
Prepared by:
Yanira Cortez, Urban Economic Analyst II
Business Development Division
Attachments (2):
A. Oakland BID Alliance Letter In Support of Amending the City of Oakland Business Improvement Management District Ordinance 4.48 (Ord. 12190 §1, 1999) to Allow Twenty-Year Term
B. California Charter City Enabling Ordinances - New City America -
Representing over 3,000 businesses and property
owners, the BID Alliance communicates best
practices, and resources, connects with key City and
agency representatives, and advocates on behalf of
its members to further the goals of growing and
maintaining Oakland’s vital commercial districts.
A
ugust 12, 2024
RE: In Support of Amending the City of Oakland Business Improvement Management District Ordinance 4.48 (Ord. 12190 §1, 1999) to Allow Twenty-Year Term.
To
: City of Oakland Economic and Workforce Development Department City of Oakland
1 Frank Ogawa Plaza
Oakland, CA 94612
Dear City of Oakland Staff and Representatives:
The Oakland BID Alliance respectfully requests that the City amend the City of Oakland Business Improvement Management District ordinance 4.48.010 section 080 “Resolution of Intention-Comments” (Ord. 12190 § 1, 1999) to increase the maximum management term for any district from ten (10) years to twenty (20) years, “shall not exceed twenty years,” The amendment should be drafted to allow a management term of up to twenty years. Each BID will determine the most appropriate term for their district, with a maximum term of 20 years. The management district plan will define the term during the BID formation or renewal processes.
Justification: This language gives the individual districts the flexibility to choose a term length that aligns with its unique needs and circumstances. A longer management term could offer greater stability and predictability, cost savings on renewal, and expanded qualifications for financing infrastructure projects, enabling BIDs to better serve their constituent communities.
Provisions in all management plans, as they currently stand, will allow for disestablishment at any time.
The Oakland BID Alliance, representing all current BIDs in the City of Oakland, supports this amendment.
Thank you. Please let us know if we can submit anything further in support of this request.
Respectfully Submitted,
Oakland BID Alliance
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Corporate Office 2011 W. California Street San Diego, CA 92110 619-233-5009 Fax 619-239-7105 Midwest Office 300 N. State Street, Ste 4710 Chicago, Ill. 60654 888-356-2726 New England Office: 42 Pearl Street New Bedford, MA 02740 [email protected] www.newcityamerica.com Facebook: New City America, Inc.
California Charter City Enabling Ordinances that Provide Alternatives to the PBID Law at the Local Level - New City America
City Year
Adopted
Petition
Threshold to
trigger
balloting
Maximum Term Name of Ordinance
San Diego 1998,
amended in
2003, 2016
30% No term Maintenance Assessment
District
Oakland 1999 30% 10 years Business Improvement
Maintenance District
Berkeley 2001 30% 10 years BID
San Francisco 2004 30% 15 years Community Benefit
Districts (PBID are not
allowed in SF)
Richmond 2004 30% 20 years Neighborhood
Improvement and
Commercial Enhancement
Alameda 2005 30% 20 years Community Benefit
District
Santa Ana 2007 30% 10 years BID
Santa Monica 2008 40% 20 years BID
San Jose 2007 30% 15 years Community Benefit
Improvement District
Glendale 2012 30% 20 years Community Benefit
District
San Leandro 2012 30% 15 years Community Benefit
District
Arcadia 2012 30% 15 years Community Benefit
District
Vallejo 2013 30% 20 Community Benefit
District
ƚƚĂĐŚŵĞŶƚ
2 City Year
Adopted
Petition
Threshold to
trigger
balloting
Maximum Term Name of Ordinance
Redwood City 2014 30% 20 Community Benefit
Improvement District
Salinas 2014 30% 20 Community Benefit
District
Modesto 2015 30% 20 Community Benefit
District
Downey 2015 30% 20 Community Benefit
District
Whittier 2016 30% No term Community Benefit
District
Santa Rosa 2018 30% No term Community Benefit
District
Santa Barbara 2020 30% 5 year review and
then a 20 year
continuation
Community Benefit
District
Stockton 2022 30% 20 years Community Benefit
District