TO: HONORABLE MAYOR AND FROM: Lee Wilcox
CITY COUNCIL
SUBJECT: See Below DATE: May 12, 2025
Approved Date
5/20/25
COUNCIL DISTRICT: 3
SUBJECT: A ctions Related to the Downtown Business Improvement District 2025-2026 Budget Annual Report, 2025-2026 Annual Assessments, and Setting a Public Hearing on the Levy of Assessment
RECOMMENDATION
(a) Preliminarily approve the 2025-2026 Budget Annual Report as filed by the Downtown Business Improvement District Advisory Board, or as modified by the City Council.
(b) Adopt a resolution of intention to levy the annual assessment for Fiscal Year 2025-2026; and set Tuesday, June 17, 2025, at 1:30 p.m. as the date and time for the Public Hearing on the levy of the proposed assessments.
SUMMARY AND OUTCOME
Approval of this action results in a resolution of intention to levy the assessments for the upcoming fiscal year of the Downtown Business Improvement District (BID) and sets the time and date for the public hearing.
BACKGROUND
The Downtown BID was established by City Council in 1988 pursuant to the California Parking and Business Improvement Area Law (BID Law) to promote the economic revitalization and physical maintenance of the Downtown Business District. The Downtown BID service area is shown in Attachment A. In 1989, City Council appointed the San José Downtown Association as the Advisory Board for the BID, to advise the COUNCIL AGENDA: 6/3/25
FILE: 25-573
ITEM: 2.13
HONORABLE MAYOR AND CITY COUNCIL
May 12, 2025
Actions Related to the Downtown Business Improvement District 2025-2026 Budget Annual Report, 2025-2026 Annual Assessments, and Setting a Public Hearing on the Levy of Assessment
City Council on the levy of assessments in the BID and the expenditure of revenues derived from the assessments for the benefit of the BID.
Pursuant to BID Law, the Advisory Board must come before City Council on an annual basis to present a report. The report proposes a budget for the upcoming fiscal year for the BID to advise City Council on the levy of assessments in the BID and the expenditure of revenues derived from the assessments for the benefit of the BID. City Council must then 1) review the Budget Annual Report and preliminarily approve it as proposed or as changed by City Council; 2) adopt a resolution of intention to levy the assessments for the upcoming fiscal year; and 3) set a date and time for the public hearing on the BID-related actions. Absent a majority protest at the public hearing, at the conclusion of the public hearing, City Council may approve the budget for Fiscal Year 2025-2026 as filed or as modified by City Council and levy the BID assessments for Fiscal Year 2025-2026.
ANALYSIS
The Advisory Board prepared the 2025-2026 Annual Report (Attachment B) and Budget (Attachment C) for City Council’s consideration as the proposed budget for the Downtown BID for Fiscal Year 2025-2026. As required by BID Law, the Budget Annual Report has been filed with the City Clerk and contains, among other things, a list of the improvements and activities proposed to be provided in the Downtown BID in Fiscal Year 2025-2026, an estimate of the cost of providing the improvements and activities The Advisory Board recommends no change in the method and basis for levying assessments.
City Council may approve the Annual Report as filed or modify the Annual Report and approve it as modified. After approval of the Annual Report, City Council must adopt a resolution of intention to levy the annual assessment for the 2025-2026 fiscal year and fix a time and place for a public hearing to be held on the levy of the proposed assessment.
EVALUATION AND FOLLOW-UP
The Advisory Board will present a report to the City Council next year proposing a budget for Fiscal Year 2026-2027
HONORABLE MAYOR AND CITY COUNCIL
May 12, 2025
Actions Related to the Downtown Business Improvement District 2025-2026 Budget Annual Report, 2025-2026 Annual Assessments, and Setting a Public Hearing on the Levy of Assessment
COST SUMMARY/IMPLICATIONS
The Downtown BID assessments are restricted for use exclusively by the Downtown BID. It is anticipated that a healthy Downtown BID will encourage the growth of the retail community, which indirectly generates business tax and sales tax revenue for the City.
The Fiscal Year 2025-2026 Proposed Operating Budget, subject to City Council approval, includes projected assessment revenue and corresponding expenses totaling $600,000, as detailed in the Source and Use Statement for the Business Improvement District Fund (351).
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office, the City Clerk’s Office, the City Manager’s Budget Office, the Finance Department, the Planning, Building, and Code Enforcement Department, and the San José Downtown Association.
PUBLIC OUTREACH
The budget for Fiscal Year 2025-2026 was reviewed and approved at the Advisory Board’s meeting on May 8, 2025.
This memorandum will be posted on the City’s Council Agenda website for the June 3, 2025 City Council meeting.
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-004, Government Funding Mechanism or Fiscal Activity with no commitment to a specific project which may result in a potentially significant impact on the environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
HONORABLE MAYOR AND CITY COUNCIL
May 12, 2025
Actions Related to the Downtown Business Improvement District 2025-2026 Budget Annual Report, 2025-2026 Annual Assessments, and Setting a Public Hearing on the Levy of Assessment
Lee Wilcox
Assistant City Manager
Acting Director, City Manager’s Office of
Economic Development and Cultural Affairs
For questions, please contact Sal Alvarez, Senior Executive Analyst, City Manager’s Office of Economic Development and Cultural Affairs at (408) 793-6943.
ATTACHMENTS
A – Downtown BID Map
B – Downtown BID Report for Fiscal Year 2025-2026
C – Downtown BID Fiscal Year 2025-2026 Budget Proposal
DISCOVERY
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Downtown BID Report for Fiscal Year
2025-26
1. The boundaries of the Downtown BID are as follows: I-280 at Fourth Street west along Reed Street to west side of Market Street to south side of Balbach Street to east side of Almaden Boulevard to continue on West Reed Street to Highway 87, Highway 87 north to West San Fernando Street, south side of West San Fernando Street to CalTrain tracks, CalTrain tracks to West Julian Street, south side of West Julian Street east to Montgomery Street, west side of Montgomery Street south to south side of West St.
John Street to the Guadalupe River, north along east side of the Guadalupe River to the western most set of Union Pacific Railroad tracks, north side of the Union Pacific Railroad tracks north to West Taylor Street, south side of West Taylor Street east to Coleman Avenue, southwest side of Coleman Avenue east to Highway 87, Highway 87 south to West Julian Street, both sides of West Julian Street east to First Street, south side of East Julian Street east to Fourth Street, both sides of Fourth Street south back to I-280. See Exhibit 2.
2. As of July 1, 2014, businesses that are exempt from paying the City’s Business Tax under Chapter 4.76 of the San Jose Municipal Code no longer pay the Downtown Business Improvement District assessment fee. If the business qualifies for the hardship exemption for the City of San Jose Business License Tax, the business will automatically qualify for the BID assessment fee waiver.
3. The Downtown BID will assess current year BID charges only when a business within the Downtown BID already in possession of a Business License and already assessed the Business License Tax is discovered to have not been assessed the BID in previous years.
4. An estimate of the total cost of providing the improvements and activities for fiscal year 2025-2026 is approximately $3,368,804. Estimated BID funds of $600,000 contribute to total program and staffing costs. Additional costs estimated at $2,768,804 are paid through Downtown Association revenue raised through programs and activities, project City of San Jose contract services, Property Based Improvement District, grants, and other sources.
5. The current method and basis for levying the annual assessment are as follows:
CATEGORY PROPOSED RATE
I. Retail $29.04 per FTE/$264 min.
II. Non-Retail $19.35 per FTE/$185 min.
III. Apartments & Hotels $7.92 per room/$264 min.
(residential landlords of 1-2 units $7.92 per room/$150 min) (residential landlords of 3 or more units $7.92 per room/$264 min) IV. Parking Lots see commercial landlord
Attachment B
V. Non-profits $100 VI. Independent Contractors/Rolling Vendors $55 VII. Commercial Landlords/Parking Lots Less than 10,000 square feet $440 10,001 to 50,000 square feet $990 50,001 to 100,000 square feet $1,540 More than 100,000 square feet $2,200 Maximum annual charge in all categories is $6,000. If any single business falls into more than one category, charges are assessed based upon the category producing the highest revenue for the BID. 6. Total Downtown Association program and staffing costs are funded by the following sources
of
revenue,
in
addition
to
assessment
district
revenue
of
$600,000:
Downtown
Association
revenue
raised
through
programs
and
activities,
project
City
of
San
Jose
contract
services,
Property
Based
Improvement
District,
grants,
and
other
sources
(estimated):
$2,768,804.
Account / Department
Proposed FY
25-26 Budget
City (OED) Contract 845,813.97
Other Contracts 1,131,169.95
BID Contract 598,815.09
Grants 548,005.21
Sponsorships 125,000.00
Miscellaneous 120,000.00
Total Revenues 3,368,804.22
001 - Administration 724,631.42
002 - Property Based Improvement District (PBID) 834,875.65 010 - Communications 220,709.99
030 - Advocacy, Research, & Planning 117,783.80
090 - Funded Program Salaries 273,601.58
100 - Marketing - General 317,386.13
101 - Downtown for the Holidays 25,000.00
104 - Social Media 107,274.47
106 - Partnerships/Sponsorships 10,000.00
200 - Parking 35,857.10
503 - Downtown Ice 137,838.37
602 - Sonic Runway 3,000.00
702 - Sphere Tree 6,500.00
703 - Equipment Storage 3,000.00
901 - Downtown Branding Initiative 22,928.55
902 - Digital Outreach Improvements 6,454.28
903 - Restaurant District Outreach 35,507.10
904 - 2026 Support 29,314.18
905 - Downtown Data 14,271.39
906 - Pedestrial Mall 24,454.28
907 - Stitching Districts 202,088.51
908 - Downtown w/Your Council Member 21,908.56
909 - Downtown FM Support 8,408.56
910 - Seasonal/OCA Activations 21,908.56
911 - SJ Holiday Lighting 62,726.77
912 - Large Scale Public Event 101,374.97
Total Expenses 3,368,804.22
Net Revenue -
FY 25-26 SJDA Budget Proposal FY 25-26 Budget Proposal 2 Page 1 of 1 Attachment C
San Jose Downtown Association
FY 25-26 Budget Proposal
for the period July 1, 2025 through June 30, 2026