City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00445 June 14, 2022
Title: Central Midtown Restaurant Business Improvement District No. 2022-02 – Public Hearing (Noticed 04/27/2022)
Location: District 4
Recommendation: Conduct a public hearing and upon conclusion, pass a Motion approving the proposed assessment and improvements for the Central Midtown Restaurant Business Improvement District (District) renewal term, and directing the City Clerk to: 1) tabulate any written protests submitted and not withdrawn before the hearing is closed; and 2) bring back the matter as a consent item on June 21, 2022, with the protest results, for City Council’s formal renewal of the District.
Contact: Sini Makasini, Development Project Manager, [email protected] ,
(916) 808-7967; Sheri Smith, Special Districts Manager, [email protected], (916) 808-7204, Department of Finance
Presenter: Sini Makasini, Development Project Manager, (916) 808-7967, [email protected]
, Department of Finance
Attachments:
1-Description/Analysis
2-Schedule of Proceedings
3-Attachment A, Proposed Assessment and Improvements
4-Attachment B, District Map
Description/Analysis
Issue Detail: The District levies assessments on restaurants in the Central Midtown corridor to provide a higher level of services (including lighting, safety, and economic development) for restaurants in the District than what is provided by the City. On June 20, 2017, Council approved the initial formation of the District for a five-year term (Resolution No. 2017-0255).
The District was formed under the California Property and Business Improvement Law of 1994.
As the original term expires on June 30, 2022, restaurant owners representing 88% of the affected businesses within the District submitted petitions to the City requesting renewal of the District for a ten-year term that would run through June 30, 2032.
On April 26, 2022, Council adopted the Resolution of Intention (ROI) to renew the District and set May 17, 2022 and June 14, 2022 as the dates for the public meeting and public hearing respectively for the proposed renewal of the District. A Joint Notice of Public Meeting and Public Hearing was mailed to all affected restaurant owners on April 27, 2022.
On May 17, 2022, Council held the required public meeting as a venue for public testimony and for affected business owners in the District to discuss the formation proceedings. No formal action was taken by Council subsequent to the conclusion of the public meeting.
At the conclusion of the hearing, staff recommends that Council approve the proposed assessment and improvements for the renewal term shown as Attachment A, and direct the City Clerk to tabulate the written protests submitted and not withdrawn to determine whether there was a majority protest against the proposed renewal of the District (i.e., whether a majority of the business owners who submitted written protests are opposed to the District and assessment). Staff will report the results of any protests at the Council meeting on June 21, 2022. If there is no majority protest, staff will recommend that the Council adopt a resolution at the June 21, 2022 Council meeting to renew the District for a ten-year term.
Policy Considerations: The recommended actions in this report are in accordance with the California Property and Business Improvement District Law of 1994 (California Streets and Highways Code section 36600 et seq.).
Economic Impacts: None.
Environmental Considerations:
California Environmental Quality Act (CEQA): Renewal of the District creates a funding mechanism for services and does not have a significant impact on the environment. Accordingly, renewal of the District does not in itself constitute a project under CEQA and is therefore exempt from review pursuant to CEQA Guidelines section 15378(b)(4).
Sustainability: Not applicable.
Commission/Committee Action: None.
Rationale for Recommendation: The public hearing is a required step in the renewal process and its completion will allow the District renewal proceedings to continue. District services will enhance economic development and safety services above what the City currently provides.
The District’s services will include lighting, safety, placemaking, outreach, and other activities to convey a positive image within the restaurant corridor, resulting in increased economic activity and revenue.
The Midtown Association (Owners’ Association), which is a nonprofit entity that serves as the governing body of the District, serves as a key partner to the City’s economic development efforts, particularly in the area of enhancing a clean and safe environment in the District, while providing increased marketing efforts for the District. In addition, the Owners’ Association has the potential to serve as a critical partner in identifying both business needs and opportunities, as the Association will in many instances be the first entity contacted by local restaurant businesses.
Financial Considerations: Financing is provided by the levy of assessments upon restaurant businesses that receive specific benefits from the services provided by the District. There are 11 participating restaurant businesses in the District service area. The total District assessment budget for the first year of the renewal will be approximately $200,000. The District is self-supporting and has no impact to the General Fund.
The annual assessment rate for the renewal term would be 1.5 percent of gross food sales revenue including takeout and to-go sales plus a fixed amount based on the maximum occupancy for each restaurant. The assessment would not be collected on gross alcoholic beverage sales and gross retail sales (such as coffee mugs, t-shirts, etc.). The fixed assessment amount (based on occupancy) is in addition to the gross food sales assessment.
Local Business Enterprise (LBE): Not applicable.
SCHEDULE OF PROCEEDINGS
CENTRAL MIDTOWN RESTAURANT
BUSINESS IMPROVEMENT DISTRICT NO. 2022-02
March 15, 2022 Petition Drive Kick-off
April 26, 2022 Resolution of Intention – City Council
May 17, 2022 City Council – Public Meeting
June 14, 2022 City Council - Public Hearing
June 21, 2022 City Council - Results
July 1, 2022 Collections begin for the District
ATTACHMENT A
Proposed Assessment Rate & Improvements
Purpose: The purpose of th e Central Restaurant Midtown Business Improvement District (District) is to provide services and improvements which constitute and convey a special benefit to assessed restaurant businesses . The District is designed to provide specific benefits directly to payers by increasing restaurant food sales and revenue therefrom. Lighting and safety; placemaking, arts, and events; and advocacy and related administration programs will be provided to increase restaurant food sales and market assessed restaurant businesses in the District.
Budget: The ten (10) year budget is projected at approximately $200,000 annually, or $2,000,000 total, through June 30, 2032. This budget is expected to fluctuate as businesses open and close and food sales change but is not expected to significantly change over the life of the District renewal term.
Cost: The annual assessment rate shall be 1.5 percent of gross food sales revenue including takeout and to-go sales plus a fixed amount based on occupancy. Based on the benefit received, the assessment shall not be collected on: gross alcoholic beverage sales; and gross retail sales (such as coffee mugs, t-shirts, etc.). The fixed assessment amount (based on occupancy) is in addition to the gross food sales assessment and is shown in the table below:
Occupancy
Threshold
Annual Occupancy
Assessment
Under 49 customers $500
50-99 customers $1,000
100-199 customers $2,500
200+ customers $5,000
I ST
J ST
L ST
K ST
N ST
H ST
G ST21ST ST 24TH ST 25TH ST
18TH ST
19TH ST 26TH ST20TH ST 23RD ST22ND ST
CAPITOL AVE
27TH ST
I ST
J ST
L ST
K ST
N ST
H ST
G ST21ST ST 24TH ST 25TH ST
18TH ST
19TH ST 26TH ST20TH ST 23RD ST22ND ST
CAPITOL AVE
27TH ST
Central Midtown Restaurant
Business Improvement District No. 2022-02
0 500 1,000250
Feet
BMueller, 04/20/22
Central Midtown
Restaurant BID Boundary
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Central Midtown
Restaurant BID Boundary
ATTACHMENT B