By Tiffany Rider - Senior Writer

February 14, 2012 - The latest draft of the Downtown Property Based Improvement District (PBID) management plan, released February 10, shows what the Downtown Long Beach Associates (DLBA) refers to as “significant” revisions. These include a budget reduction of $400,000 and the elimination of what was referred to a “community court.”

The DLBA, the nonprofit that manages the PBID, used 188 of 412 comments received, in conjunction with other input from the local community over the yearlong process, to shape this final draft. To download it, visit www.downtownlongbeach.org.

The plan, which would renew the district for another 10-year period, would also assess for the first time an annual fee to 2,500 residential property owners.

The 188 selected comments were deemed applicable to the plan, while other comments did not provide direct guidance or constructive criticism germane to revising the plan, according to the DLBA. An example of a non-applicable comment received by the DLBA is, “DO NOT AGREE WITH YOUR PLAN.”

One of the top issues raised during the ongoing development of the PBID management plan was the projected $2.7 million annual budget, which allocated $1.8 million for environmental activities, $550,000 for economic development activities and $350,000 for administrative and advocacy activities. The administrative aspect of the budget would also include reserve funds for PBID assessment delinquencies.

The new, final draft has reduced the projected annual budget to $2.3 million, with $1.475 million allocated to the environmental activities and $600,000 dedicated to economic development.

The item that garnered the most comments was the community court, which was budgeted at $100,000 annually, to address disruptive behavior and reduce nuisance crimes. The new plan does allow options for enhanced security, such as a “navigator program” to address chronic homelessness and a community prosecutor, who would be funded as-needed through the environmental aspect of the PBID budget.

Other factors helped reduce the overall cost, including a decrease in both standard and premium assessment rates across the board for the lot and building square footage. The lot frontage assessment for standard went from $9.65 to $9.589 per square foot, and the premium rate dropped from $19.21 to $15.444.

In addition to eliminating the community court and reducing the overall budget, the DLBA deemed the following 13 revisions significant:

• The administrative budget was reduced from 13 percent to 9.8 percent. Commenters requested the DLBA reduce the administrative costs to 10 percent. The line item includes a 3 percent reserve for PBID delinquencies; thus the overall administrative budget is 6.8 percent.
• The economic development budget increased by $25,000. Commenters requested more money be spent on economic development with the loss of redevelopment and funding cuts for economic development with the City of Long Beach.
• The management plan anticipates the DLBA will explore by this April additional residential representation on its board.
• The methodology changed from a flat rate to per square foot for condos, consistent with other property types. Now, all annual assessments are based on set charges per foot – no property is assessed a flat fee in the final draft plan.
• The residential coordinator position is further described. The DLBA likens the position to a city councilmember field deputy.
• The plan continues the 2003 model of using the tri-county consumer price index as a benchmark with a 5 percent ceiling. The DLBA noted that there has never been a time when the board has increased assessments by 5 percent; in fact, the past two years have seen no increase in assessment based on the current economic conditions.
• Language was added explaining the inclusion of homeowners, and a legal memo summarizing case law regarding proportionality and PBIDs has been made available as an exhibit.
• The bond issuance language was removed. Commenters had concerns with allowing the DLBA to issue bonds using assessment dollars in the event bonds defaulted. Bond issuance language may be added to another DLBA program, according to DLBA President and CEO Kraig Kojian.
• Property south of Seaside Way has been changed from the premium to the standard benefit zone. This change is a reduction in overall revenue, according to Kojian, reflected as part of the $400,000 budget reduction. The properties in this particular area are owned by the City of Long Beach. Developers Diversified Realty, which operates The Pike, already provides what DLBA Vice President Kris Larson called a “tremendously high level of service.” The DLBA is currently working with the city to establish service contracts for other areas south of Seaside Way, according to Kojian.
• More language about the growing downtown residential population has been added. Commenters wanted to see more information in the plan about the changing demographic of downtown, according to Larson.
• Sample property assessment calculations added. “We wanted to provide some samples so people could see how to utilize those assessment variables, and to be able to predict their own calculations,” Larson said. “I should say that every individual will also receive that calculation as part of the ballot process.”
• The methodology for assessing rental residential property has been changed to reflect benefits experienced by individually-owned units. So, rather than considering a rental residential property – apartment buildings – as a commercial business, the property is now assessed based on use. Larson said this item significantly deviates from the existing PBID management plan and the first draft of the new PBID management plan. The final draft now shows these buildings being assessed as residential properties, using total square footage of all units.
• The DLBA added an application process for property owners seeking non-profit rates. The previous draft worked under the assumption that properties owned by non-profit organizations were being used for non-profit activities. However, after the DLBA identified one non-profit using its property downtown for for-profit operations, the final draft plan now requires non-profits to document both building ownership and tenant use in order to receive the discounted rates.

The final draft goes before the DLBA Board of Directors for a vote on March 8. That same day, the DLBA will release a long-awaited report that includes an assessment roll for the PBID that reflects the pricing in the final draft.

The councilmembers associated with the PBID – Robert Garcia and Suja Lowenthal – have yet to take a position on the management plan.

DLBA Addresses Promenade Maintenance District Issue

With regard to the first draft management plan, a point of contention for residents living in the redevelopment agency’s established Promenade Area Maintenance District (PAMD) was that the benefits of the district would be duplicated by those provided through the PBID.

There are four parcels on The Promenade, with one between Broadway and 3rd Street left to be developed. According to Kojian, that area is expected to be complete later this year. The PAMD does not go into effect until the entire district is finished.

According to Larson, the DLBA has worked with the redevelopment agency to ensure that the scope of the PAMD would not include services like pressure washing and sidewalk sweeping. The Promenade district would be responsible for capital replacement costs, he said, like replacing light bulbs. Larson described the agreement as a service to the residents affected by the PAMD, “because not every property is going to be paying into the maintenance district. . . . Existing properties, like [the] Insurance Exchange [building], the old Blue Café building, the Renaissance Hotel – they are not contributing to this maintenance district. What we are able to do as well is reduce that overall burden on the new residents by removing that element of the scope, so they’re not the only ones contributing to it now because PBID attributes those costs equitably.”

Both Kojian and Larson suggested homeowners associations of other owner-occupied residential properties in the PBID follow suit, if they haven’t already, to update their service levels and fees according to those being provided through the PBID.