Business Improvement District
March 7, 2017
We recently asked our city attorney to provide us with a statement regarding the establishment of the Huntington Beach Downtown Business Improvement District. Following is his reply:
Here is the City’s position:
Parking and Business Improvement Districts (Districts) are created in two ways: First, Charter Cities may create Districts using their charter authority; second, charter and general law cities may create Districts by following the California Streets and Highways Code Parking & Business Improvement Laws.
In Huntington Beach, the City Council created three Business Improvement Districts following what is referred to as the “1989 Act”… i.e., California Streets and Highways Code 36500, et. seq. California’s 1989 Act allows cities to create Districts to assist businesses located and operating within the Districts to fund improvement or maintenance activities such as inadequate facilities, services, and activities in the Districts. In general a District is a geographical area where businesses located in the area pay an assessment to the City that is then redistributed back to the area to pay for certain maintenance and improvements in the District. Local assessments levied for the purpose of providing improvements and promoting activities, which benefit individual businesses, may also benefit the property within the District directly or indirectly and that those assessments are not taxes for the general benefit of a city. They are rather, assessments for the improvements and activities that confer special benefits upon the businesses for which the improvements and activities are provided.
Pursuant to the authority granted by the 1989 Act, the Huntington Beach City Council adopted Resolution No. 2004-56, which states the City’s intention to create and establish the Huntington Beach Downtown BID. In compliance with the 1989 Act, this Resolution set forth the boundaries of the proposed BID, the types of improvements to be funded by the levy, the proposed assessments amounts, the method of calculation of the assessments, and the other items required by the statute. In addition, this Resolution provided notice of time and place for a public hearing where any business within the BID could protest the creation of the BID. If more than 50% of the businesses protested, the City Council could not create the BID. A public hearing was held on September 7, 2004 and there was no majority protest.
Following the public hearing, the City Council adopted Ordinance No. 3661, which created and established the Downtown BID. This Ordinance contained the information required by the 1989 Act such as: The number, date of adoption, and title of the Resolution of intention; the time and place where the public hearing was held; a determination regarding any protests received at the public hearing; the description of the boundaries of the District and of each separate benefit zone established within the District; a statement that a parking and Business Improvement area has been established and the name of the District; the description of the method and basis of levying the assessments; a statement that the improvements and activities to be provided in the District will be funded by the levy of the assessments; the revenue from the levy of assessments within an District shall not be used to provide improvements or activities outside the District.
We reviewed the Resolution No. 2004-56 and Ordinance No. 3661 and determined that both comply with State law. In addition pursuant to State law, the City Council appointed an Advisory Board for the District. The BID Advisory Board makes recommendations to the City Council regarding the expenditures of revenues derived from the assessments, on the classifications of businesses, and on the method of levying the assessments. The Advisory Board recommendations are then considered by the City Council at a noticed public meeting and approved or modified as determined by the City Council. In February 2008, the City Council adopted Ordinance No. 3797, which amended Ordinance No. 3661 to change the manner in which the District’s Advisory Board was selected. Following adoption of Ordinance No. 3797, the City Council approved Resolution No. 2008-04, which appointed a non-profit corporation known as the Huntington Beach Downtown Business Improvement District (the “Non-profit Corporation”) to act
as the Advisory Board for the District. The Non-profit Corporation has continued to act as the Advisory Board for the District since the adoption of Resolution.
Michael E. Gates
CITY OF HUNTINGTON BEACH
2000 Main St., Fourth Floor
Huntington Beach, CA 92648
Ph: (714) 536-5538 Fx: (714) 374-1590