HomeMy WebLinkAbout2009/01/20 Item 6
CITY COUNCIL
AGENDA STATEMENT
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~lff:.. ClIT OF
jIIIII~- - (HULA VISTA
JA1'WARY 20, 2009, Item~
SUB.MITTED BY:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA DECLARING ITS INTENTION TO
ESTABLISH THE CHULA VISTA AUTO PARK
BUSINESS I.1vlPROVElvIENT DISTRICT ["BID"]
PURSUANT TO THE .PARKING AND BUSINESS
It\i!PROVEMENT LAW OF 1989
DEPUTY _CJrl MANAGERlDEVELOPMENT SERVICES
DIRECTO~ .
CITY MANAGERY
4/STHS VOTE: YES U NO ~
ITEM TITLE:
REVIEWED BY:
SUMMARY
For the past year, city staff has been working with the automobile dealers in the Chula
Vista Auto Park on the formation of a Business Improvement District (BID). The district
will provide a self-funding mechanism to allow for the promotion and marketing of auto
dealers within the Auto Park.
ENVIRONMENTAL DETEAAllNATION
The Environmental Review Coordinator has reviewed the proposed actIvIty for
compliance with the California Environmental Quality Act (CEQA) and has determined
that the activity is not a "Project" as defined under Section 15378 of the State CEQA
Guidelines; therefore, pursuant to Section 15060 (c)(3) of the Slate CEQA Guidelines the
activity is not subject to CEQA. Thus, no environmental review is necessary..
RECOMMEi'l1)ATION
Council adopt the resolution.
BOARDS/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
Business Improvement Districts (BIDs) represent an innovative approach to business
promotion and service delivery. BIDs have traditionally been established by groups of
local businesses and property owners to improve specific business areas through
beautification efforts, increased maintenance, local promotion, special events, and other
activities selected by the local BID board. Funding is derived from voluntary assessments
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JANUARY 20, 2009, Item &,
Page 2 of3
The Chula Vista Auto Park began in the 1990's with two automobile dealerships. Over
the past few years, the Auto Park has grown to five dealerships, with a sixth anticipated
to begin construction in the spring of 2009. While the Auto Park has enjoyed a level of
success to date, the dealers and city staff have continually looked for ways to expand the
public's awareness of the Chula Vista Auto Park.
For the past several months, city staff has been working with the auto dealers on the
formation of the Chula Vista Auto Park BID. The proposed district would require that all
new and used car dealerships pay an assessment based upon a formula that utilizes their
gross taxable sales. The formula would assess each auto dealer a minimum of $3,000 per
month and a maximum of $6,000 per month. The money would be paid into a fund that
could be used to pay for marketing and advertising to promote the Auto Park as a
destination point, a banner program, the maintenance and operation of a potential Auto
Park directional sign, employee parking shuttle, and day-to-day administration and staff
for the district. .
The BID proposes that each business paying the assessment will be a voting member of
the Board. The BID would have a board of directors (Board) appointed by the City
Council. As new and used auto dealers locate in the auto park, upon adoption of a
resolution of the City Council, they will become voting members of the Board. The board
will submit an annual budget and an annual report to the City Council for review and
approval. .
Exhibit B of the proposed Resolution details the proposed boundary of the Chula Vista
Auto Park BID. While the district encompasses an area greater than the current auto park,
it was determined that all properties that may potentially contain future new and used car
dealerships should be included in the district boundary. If a new or used dealer comes
into the auto park, they are required to begin paying the assessment once they begin to
make taxable sales. It is important to note that ONLY new and used car dealerships are
subject to the assessment. Existing commercial and industrial businesses, as well as
vacant land within the District will not be required to pay the assessment.
The attached resolution is the first action required for the formation of the Chula Vista
Auto Park BID. State law requires that the City shall first declare its intent to establish
the district and levy the assessment, and establish the date and time for a public hearing
on the formation of the BID. The adoption of the resolution establishes February 10,
2009 as the date of the public hearing. At the public hearing an Ordinance will be
introduced that, upon adoption, will allow for the formation of the Auto Park BID.
DECISION MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found no property
holdings within 500 feet of the boundaries of the property which is the subject of this
action.
FISCAL IMPACT
There will be no impact to the City's General Fund as a result of this action. The City's
future role in the BID will be to review and approve both the annual budget and annual
financial report. All the costs of the operation of the district will be paid by the auto
dealers.
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J.A.l"TU.i-\RY 13,2009 Item~
Page 3 of3
DECISION MAKER CONFLICT
Staff has reviewed the property holdings of the City CouncillRDA Members and has
found no property holdings within 500 feet of the boundaries of the property which is the
subject of this action.
FISCAL IMP ACT
There will be no impact to the City's General Fund asa result of this action. The City's
future role in the BID will be to review and approve both the annual budget and annual
financial report. All the costs of the operation of the district will be paid by the auto
dealers.
ATTACHMENTS
1. Resolution
Prepared by: Craig Ruiz, Principal Economic Development Specialist, Office of Economic Development
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RESOLUTION NO. 2009-
RESOLUTION OF TIIE CITY COUNCIL OF THE CITY OF
CHULA VISTA DECLARlNG ITS INTENTION TO
ESTABLISH THE CI-flJLA VISTA AUTO PARK BUSINESS
IMPROVEMENT DISTRICT ["BID"] PURSUA1'lT TO TIIE
PARKING AND BUSINESS IMPROVEMENT LAW OF 1989
WHEREAS, the Parking and Business Improvement Area Law of 1989 (Streets and
Highways Code Section 36500 et seq., hereafter referred to as the "Law") is intended to aid in
the promotion of physical and other improvements and activities v,ithin local business districts;
and
WHEREAS, the City Council of the City of Chula Vista desires to form a parking and
business improvement area, to be known as the "Chula Vista Auto Park Business Improvement
District" (the "District") pursuant to the Lmv, to promote the. proposed area as a premier
employment and commercial area, and specifically to aid in the promotion of local transportation
sales businesses located in the proposed area; and
W1-!EREAS, the transportation sales businesses in the proposed area have been given an
opportunity to review the proposed Management District Plan (the "Plan," which is comprised of
Exhibits "A," "B," "C," "D" and "E," attached to this Resolution) that describe the activities and
improvements, the proposed area, and the amounts and methodology for levying assessments
upon the businesses located Vlithin the area, and have indicated their support for the formation of
this District by submitting petitions supporting the District formation; and
WHEREAS, after a preliminary review for compliance with the California
Environmental Quality Act (CEQA) staff has determined that the activity is not a "Project" as
defined under Section 15378 of the State CEQA Guidelines because the action only involves
fiscal issues which do not involve any commitment to any specific project which may result in a
potentially significant physical impact on the environment; therefore, pursuant to Section
15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Staff has further
determine that
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
as follows:
1. The City Council declares its intention to form a parking and business improvement area
to be known as the "Chula Vista Auto Park Business Improvement District" (the "District")
pursuant to the Law.
2. The area to be included in the District includes those businesses engaged in the sale of
new vehicles for transportation (including but not limited to automobiles, trucks and motor
homes); collectively hereafter referred to as "transportation sales businesses" and identified as
such by designations within the North American Industrial Code bearing those code numbers
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Resolution No. 2009-
Page 2
identified in Exhibit "A," attached hereto and incorporated herein by this reference. The
businesses are located within the area of Chula Vista: (a) fronting along that street known as
Main Street/Auto Park Drive, within the boundaries of Interstate 805 on the west and Nirvana
Avenue on the east; and (b) fronting on the side streets off Auto Park Drive specifically
identified in the Plan. The precise business areas and.boundaries for the District are described in
Exhibit "B," attached hereto and incorporated herein by this reference.
3. The purpose of forming the District as a parking and business improvement area is to
provide revenues ("District revenues") to cover the cost of services and programs that will
benefit the assessed businesses within the area. The services and programs to be provided and
paid for by the District revenues are described in Exhibit "C," attached hereto and incorporated
herein by this reference.
4. All transportation sales businesses will be assessed, on a per-business license basis, a
share of the cost of the services and programs, according to the following criteria: (See Exhibit
"0," attached hereto. and incorporated herein by this reference).
Initial Six-Month Period
During the first six months after the effective date of the District, each transportation sales
business will be assessed the sum of $3,000.00 per month.
Remaining Term(s) of District
Following the Initial SLx-Month Period, during the remammg term(s) of the District,
including any renewals of the District pursuant to Law, each transportation sales business will be
assessed according to the following measures:
(a) $3,000.00 per month, if the armualized taxable sales attributable to the business
license are equal to or less than $24,000,000.00;
(b) A sum equal to .0015% of the average quarterly taxable sales, if the armualized
taxable sales attributable to the business license are equal to or more than $24,000,001.00;
(c) Notwithstanding the formula set forth in (b), above, the maximum assessment shall be
$6,000.00 per month, regardless of the actual armualized taxable sales attributable to the business
license.
The total assessment collected from any new transportation sales business under the
provisions of the resolution shall be at least $36,000.00 per year, but shall not exceed $72,000.00
per year.
New Businesses
While the Law provides for an option to exempt new businesses from the payment of the.
assessment for the first year of operation, businesses locating within the District after the date on
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Resolution No. 2009-
Page 3
which the District is formed ("new business") shall not be exempt from the payment of the
assessment, for a period of one year from the date on which the new business commences
operating in the District.
5. The assessment to be established shall be a monthly charge, collected by a third party
Consultant acceptable to the City of Chula Vista and the BID board of directors. The Consultant
shall collect the minimum monthly charge, then reconcile each transportation sales business'
account on a quarterly basis and charge such additional amounts to each transportation sales
business, as called for under the Plan and this resolution. Additional assessment amounts shall
be paid within thirty (30) calendar days of receiving notice from the Consultant, advising the
transportation sales business of the additional amounts required.
6. Pursuant to the ordinance to be adopted, establishing the District, the failure to timely pay
any assessment shall be considered a breach of the terms upon which the transportation sales
business holds its business license, and will result in .the City's revocation of the transportation
sales business' license, or refusal to renew it upon the annual expiration of the license.
7. The City Council finds and determines that the public convenience and necessity require
the establishment of the area herein described, and that all of the covered transportation sales
businesses within the area will be specially benefitted by the expenditure of the funds raised by
the assessments proposed to be levied.
8. Pursuant to California Government Code section 54954.6, notice is given that on
February 10,2009, at 6:00 p.m., in the City Council chambers of the City of Chula~Vista, located
at 276 Fourth A venue, Chula Vista, California, the City COLillcil shall conduct a public hearing
where any and all persons having any desire to be heard on this matter, may appear and state
their views regarding the establishment .of the above-described District, including the extent of
the District area, the method of assessment, or the proposed services and programs.
9. Pursuant to California Streets & Highways Code section 36525, valid written protests
from business owners who would pay fifty percent (50%) or more of the assessments proposed
to be levied will prevent further action from being taken to form the District, for a period of one
(1) year from the date the City Council fmds a majority protest exists.
10. Pursuant to California Streets & Highways Code section 36523, the City Council hereby
directs the City Clerk to give proper notice of the above-described hearing; by both publication
and mailing in accordance with the Law.
Presented by
Approved as to .form by
James D. Sandoval
City Manager
,
\
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Resolution No. 2009-
EXHIBIT A
NORTH AMERICAt~ INDUSTRIAL CODES (N.A.Le). CODES FOR
AFFECTED BUSINESSES IN THE CHULA VISTA
AUTO PARK BUSINESS IMPROVEMENT DISTRICT
Those NAIC Code numbers will include:
Type of business NAlC Code - 2007
Automobile dealers 4411
New Car Dealers 44111
New Car Dealers 441110
Used Car Dealers 44112
Used Car Dealers 441120
Other New Motor Vehicle 4412
Dealers
New' Recreational Vehicle 44121
Dealers
New Recreational Vehicle 441210
Dealers
All other New Motor 441229
Vehicle dealers
Each new transportation sales business license holder within the confines of one
common lot is considered one separate entity for assessment purposes, including
those situations when a single one person or corporation owns multiple new
vehicle dealerships.
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Resolution No. 2009-
EXHIBITB
BOUNDARlES AND MAP OF THE CHULA VISTA
AUTO PARK BUSINESS IMPROVEMENT DISTRICT
Boundaries: Along Main Street/Auto Park Drive, in general, from:
Highway 805 on the west;
Nirvana Avenue on the east including all commercially zoned parcels in
between Nirvana and Highway 805;
All of the side streets off of Auto Park Drive that can legally accommodate
transportation sales businesses;
Street and Address series for boundaries of new district:
Street Address Series
Auto Park Drive 505 - 4555
Auto Park Place 1860 - 1890
Brandywine Avenue 1669 - 1690
Main Court 1810 -1820
Any and all new transportation sales related business license holders falling within
these boundaries will automatically be included in this assessment district. There
are currently five dealerships that would be assessed using the above criteria.
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Map created by: John LiMandri
Resolution No, 2009-
EXHIBITC
SERVICES Al'ID PROGRA1\11S TO BE FUNDED BY THE BUSINESSES IN THE
CHULA VISTA AUTO PARK BUSINESS INlPROVEJ\JIENT DISTRICT
Purpose of the Chula Vista Auto Park Business'Improvement District:
The Chula Vista Auto Park BID will serve as a funding mechanism for some or all
of the following special services to market and promote Auto Park Drive new
transportation related businesses;
~ the construction ,and maintenance of the new vehicle dealers freeway sign,
which may be constmcted by the City of Chula Vista, will be included as a
service or program funded by the proposed BID, The BID new vehicle
dealers within the BID will participate in the design operations and
maintenance of the new freeway sign;
~ pay for marketing and advertising to promote the street as a destination
point;
~ pay for enhanced median maintenance along Auto Park Drive within the
boundaries of the district;
~ employee parking shuttle,
~ banner program for street to promote district;
~ organizational operations and staff;
~ day-to-day administration of and staff for the District
l:\C~ig\AulO Park\BID\Ag~nda Bill- adoJllion\8IDReso-l 20 09-fmal r:r ~diIS.doc
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Resolution No. 2009-
EXHIBIT D - ASSESSMENT FORMULA, MINIMUM AND MAxIMUM
Assessments raised throuzh three tiered svstem: Mandatory assessments/fees
raised through levies on transportation related sales/businesses within a defmed
geographical area (Auto Park Drive), as follows:
a. Base amount: In the first six months of adoption of the ordinance,
there will be a mandatory minimum payment from each ,transportation
sales business in the amount of $3,000 per month per business. Car
dealers/owners with separate brands pay on the basis of each business
license received. from the City for first six months of assessment
district. Therefore, during the first six months of the districts'
formation, the monthly budget will be $15,000 per month.
b. After six months of adoption of the district, the three tiered system
with minimums and maximums is applied.
c. Tiered system is based upon the fact that all dealers, regardless of type
and style of vehicle, pay a base assessment of$3,000 per month.
1. Any sales above $ 24,000,001 in annualized sales, after the first six
months of the district, will pay at a rate of .0015% of the average
quarterly sales. ($ 24 million in sales per year times .0015 =
$36,000 per year).
2. Maximum amount: The maximum amount any dealer can pay is
$6,000 per month - therefore annualized sales above $48,000,001
per year are capped at $6,000 per month.
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Resolution No. 2009-
Sample Assessment Methodology Based Upon Existing
Five Transportation Dealers - March 2008
Annual Taxable Sales Factor Annual Assessment. Monthly Charge
(1 %) per dealer (Divided by 12)
$ 10,000,000 .0015 $ 36,000.00 $ 3;000.00
Minimum
$ 20,000,000 .0015 $ 36,000.0 I $ 3,000.00
Minimum
$ 24,000,000 \.0015 $ 36,000.00 $ 3,000.00
Minimum
$ 30,000,000 I .0015 $ 45,000.00 $3,750.00
$ 35,000,000 .0015 $ 52,500.00 $ 4,375.00
$ 40,000,000 . .0015 $ 60,000.00 $ 5,000.00
$ 45;000,000 .0015 $ 67,500.00 $ 5,625.00.
$ 48,000,000 I .0015 $ 72,000.00 $ 6,000.00
$ 52,000,000 I ,0015 $ 72,000.00 $ 6,OQO.00
$ 60,000,000 .0015 $ 72,000.00 $ 6,000.00
Collection: Collection will be done on a monthly basis, by third party
acceptable to the City of Chula Vista and the BID board of directors.
Collection (requencv: Assessments are to be collected on a monthly basis from
contribution by each transportation business. sales business license holder
according to the ordinance. These sales tax figures will be reconciled, once
sales taxes for a given quarter have been revealed by the state to third party
agent of the City of Chula Vista.
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Resolution No. 2009-
EXHIBIT E - ROSTER OF THE CHULA VISTA AUTO PARK. BID BOARD OF
DIRECTORS
NAME
BUSINESS
DOUG FULLER
DOUG FULLER
TONY MCCUNE
ED WESCHE
WAYNE MEYER
FULLER FORD
FULLER HONDA
MCCUNE CHRYSLER, JEEP, DODGE
PEOPLE'S CHEVROLET
CHULA VISTA TOYOTA
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