HomeMy WebLinkAbout16 - Amend the Stakeholder Business Structure and Annual Assessments Levied for the NBRABIDTO:
FROM
CITY OF
NEWPORT BEACH
City Council Staff Report
August 9, 2016
Agenda Item No. 16
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Dave Kiff, City Manager - 949-644-3001,
dkiff@newportbeachca.gov
PREPARED BY: Mary Locey, Management Analyst/BID Liaison
PHONE: 949-644-3031 1 mlocey@newportbeachca.gov
TITLE: Second Reading of Ordinance No. 2016-11 to Amend the
Stakeholder Business Structure and Annual Assessments Levied
for the Newport Beach Restaurant Association Business
Improvement District
ABSTRACT:
The Newport Beach Restaurant Association Business Improvement District (NBRA BID)
requests an amendment to its stakeholder structure and annual assessments levied to
improve the alignment of the marketing and public relations benefits for its stakeholder
businesses.
RECOMMENDATIONS:
a) Hold a public hearing regarding amending the stakeholder structure and annual
assessments levied for the Newport Beach Restaurant Association Business
Improvement District;
b) Determine that the action is exempt from the California Environmental Quality Act
(CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines
because it will not result in a physical change to the environment, directly or
indirectly; and
c) Conduct a second reading and adopt Ordinance No. 2016-11, An Ordinance of the
City Council of the City of Newport Beach, California, Amending the Stakeholder
Business Structure and Annual Assessments Levied for the Newport Beach
Restaurant Association Business Improvement District.
FUNDING REQUIREMENTS:
There is no fiscal impact to the City's General Fund related to this item. If the City
Council ultimately approves the proposed changes, the new assessments levied would
increase the NBRA BID's revenues by approximately $54,000 in fiscal year 2016-2017.
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Second Reading of Ordinance No. 2016-11 to Amend the Stakeholder Business
Structure and Annual Assessments Levied for the Newport Beach Restaurant
Association Business Improvement District
August 9, 2016
Page 2
DISCUSSION:
At its March 23, 2016 annual meeting, the NBRA BID Advisory Board of Directors
(Board) voted to recommend the City Council's approval of the new NBRA BID
stakeholder categories and assessment levies. On June 28, 2016, the City Council
approved Resolution No. 2016-81 declaring its intention to amend the stakeholder
business structure and annual assessments levied. On July 12, 2016, the City Council
introduced and passed to a second reading Ordinance No. 2016-11 (See Attachment A
for the July 12 staff report). The Ordinance amends the business structure of the NBRA
BID into categories with an assigned annual assessment levy as shown below.
... -. -..
Full service restaurant (e.g., with wait staff)
$600
Fast casual restaurant (e.g., place order at counter)
$500
Grocery or market
$500
Coffee, tea or specialty shop
$150
Dessert, bakery or treats
$150
Juice bar or smoothie shop
$150
Catering company
$150
Further, the Ordinance clarifies the types of businesses that are included or exempt
from the NBRA BID as detailed below.
Any food -service business within the boundaries of the city of Newport Beach, such as
restaurants, markets with dine -in or take-out food service, bars serving food, dessert
shops, coffee shops, juice bars, catering companies, or similar type of food -related
business. 91
Businesses ExempLftoLn
Certified Farmer's Markets, mini -marts, yachts and charters, banquet facilities, private
membership clubs, theaters, and gas stations.
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Second Reading of Ordinance No. 2016-11 to Amend the Stakeholder Business
Structure and Annual Assessments Levied for the Newport Beach Restaurant
Association Business Improvement District
August 9, 2016
Page 3
The NBRA BID was renewed under its existing structure by the City Council on June 14,
2016. In anticipation of City Council's consideration of the amended structure, staff and
the NBRA BID Board agreed to postpone processing the annual assessments. Should
the City Council adopt Ordinance No. 2016-11, the new assessment structure would go
into effect on September 8, 2016. The fiscal year (FY) 2016-2017 assessments would
then be processed and mailed reflecting the new NBRA BID business structure and
assessment levies.
In addition, the approved NBRA BID budget for FY 2016-2017 would be amended to
reflect the increased assessment revenue, estimated to be $54,000 (Attachment B).
The NBRA BID Board discussed the proposed stakeholder amendment during several
of its public board meetings and mailed and emailed information about the proposed
changes to its stakeholders. In addition, City staff mailed a letter to the stakeholders
explaining the amendment and the process, and included copies of Resolution No.
2016-81.
As of the time of preparing this report, City staff has received two general inquiries
about the proposed amendment. No inquires have been made to representatives of the
NBRA BID Board.
Thus, City staff recommends adoption of Ordinance No. 2016-11, An Ordinance to
Amend the Stakeholder Business Structure and Annual Assessments Levied for the
Newport Beach Restaurant Association Business Improvement District (Attachment C).
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — July 12, 2016 Staff Report, without attachments
Attachment B — Amended NBRA BID Budget
Attachment C — Ordinance No. 2016-11
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TO:
FROM:
CITY OF
NEWPORT BEACH
City Council Staff Report
ATTACHMENT A
July 12, 2016
Agenda Item No. 4
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Dave Kiff, City Manager - 949-644-3001,
dkiff@newportbeachca.gov
PREPARED BY: Mary Locey, Management Analyst/BID Liaison
PHONE: 949-644-3031
TITLE: Introduction of an Ordinance to Amend the Stakeholder Business
Structure and Annual Assessments Levied for the Newport Beach
Restaurant Association Business Improvement District
ABSTRACT:
The Newport Beach Restaurant Association Business Improvement District (NBRA BID)
requests an amendment to its stakeholder structure and annual assessments levied to
improve the alignment of the marketing and public relations benefits for its stakeholder
businesses.
RECOMMENDATIONS:
a) Determine that the action is exempt from the California Environmental Quality Act
(CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines
because it will not result in a physical change to the environment, directly or
indirectly; and
b) Introduce Ordinance No. 2016-11, An Ordinance of the City Council of the City of
Newport Beach, California, Amending the Stakeholder Business Structure and
Annual Assessments Levied for the Newport Beach Restaurant Association
Business Improvement District, and pass to second reading on August 9, 2016.
FUNDING REQUIREMENTS:
There is no fiscal impact to the City's General Fund related to this item. If the City
Council ultimately approves the proposed changes, the new assessments levied would
increase the NBRA BID's revenues by approximately $54,000 in fiscal year 2016-2017.
DISCUSSION
The Newport Beach Restaurant Association Business Improvement District (NBRA BID)
was formed in 1995 pursuant to the Parking and Business Improvement Area Law of
1989 (1989 Law), codified in Streets and Highways Code Sections 36500 et seq., for
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Introduction of an Ordinance to Amend the Stakeholder Business Structure and Annual
Assessment Levied for the Newport Beach Restaurant Association Business
Improvement District
July 12, 2016
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the purpose of financing activities and programs to benefit businesses located and
operating in the area. The NBRA BID territory encompasses any food -service business
operating within the boundaries of the City of Newport Beach.
Establishment of the NBRA BID was at the request of local food -service business
owners for the purpose of marketing Newport Beach as a dining destination. Per the
1989 Law, membership is mandatory for the identified businesses within the BID and
the annual assessments are based on City Council Resolution.
The NBRA BID Board of Directors, which serves in an advisory capacity to the City
Council, developed a three-year Strategic Business Plan (Plan) in FY 2013. The Plan
identified several priority initiatives and activities, one of which included an evaluation of
the NBRA BID's assessment fee structure.
Proposed Amendment to Stakeholder Structure
Since its inception, the NBRA BID has assessed its stakeholder businesses based on
the amount of business license paid and the number of employees reported to the City
of Newport Beach (City) through the business license process. The current
assessments are based as follows:
Current Assessment Levels
Assessment Levy
Less than 10 employees
$95
More than 10 employees and pay less than $600 for a
City business license
100 percent of business
license plus $65
Pay more than $600 for a City business license
100 percent of business
license plus $145
At its March 23, 2016 annual meeting, the Board voted to recommend the City Council's
approval of new stakeholder categories and assessment levies as follows:
Proposed Stakeholder Category
Assessment Levy
Full Service Restaurant
$600
Fast Casual Restaurant
$500
Grocery or Market
$500
Coffee, Tea, or Specialty Shop
$150
Desserts, Bakery or Treat Shop
$150
Juice Bar or Smoothie Shop
$150
Catering Company
$150
While the Board was considering the new assessment structure, several other methods
were reviewed such as assessing based upon building occupancy, seating capacity or
dining square footage. However, these numbers would have to be reported by the
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Introduction of an Ordinance to Amend the Stakeholder Business Structure and Annual
Assessment Levied for the Newport Beach Restaurant Association Business
Improvement District
July 12, 2016
Page 3
individual operators and, similar to the reporting of the number of employees, would be
difficult to confirm.
Consideration focused on the main goal of the NBRA BID, to continue to market
Newport Beach as a dining destination. This has become increasingly competitive as
other cities continue to grow their culinary communities. With this understanding, the
Board felt the greatest benefit would be received by stakeholders operating full service
and fast casual restaurants. Therefore, the above noted seven categories were created
and corresponding assessments assigned.
As a part of the recommendation of the new assessment structure, the Board felt it was
necessary to eliminate gas stations that sell food and mini marts from the NBRA BID.
Further, the majority of the grocery stores and markets were paying some of the highest
assessments ranging from $771 to $956 annually. As many of the grocery stores offer
hot, convenience foods and provides places for sit-down dining, the Board believes they
will continue to receive value as a NBRA BID stakeholder.
Sample Assessment Comparisons
The Board recognizes that the current structure is placing larger assessments on the
businesses employing more people instead of the businesses which receive a greater
benefit from the BID's strategic marketing efforts. By creating different categories and
assessment levels, the NBRA BID Board believes the value of the assessment will be
aligned with the benefit received by its stakeholders.
Using the proposed amended assessment structure of categories, the following is a
sampling of businesses that will receive a reduced annual assessment.
New Category
Stakeholder Business
Current
Assessment
New
Assessment
Full service
Beachcomber Cafe
$956
$600
Fast casual
Pita Jungle
$643
$500
Grocer /market
Bristol Farms
$956
$500
Coffee/tea/specialty
Starbucks
$563
$150
Desserts/bakery/treats
See's Candies
$315
$150
Juice/smoothie
Pressed Juice
$419
$150
Catering company
24 Carrots Catering
$347
$150
Introduction of an Ordinance to Amend the Stakeholder Business Structure and Annual
Assessment Levied for the Newport Beach Restaurant Association Business
Improvement District
July 12, 2016
Page 4
Below are samples of businesses that will have an increased annual assessment:
New Category
Stakeholder Business
Current
Assessment
New
Assessment
Full service
The Alley Restaurant
$427
$600
Fast casual
Sessions West Coast
Deli
$323
$500
Grocery/market
Hershey's Market
$312
$500
Coffee/tea/specialty
Vin Goat
$95
$150
Desserts/bakery/treats
Pinkberry
$95
$150
Juice/smoothie
Juice Served Here
$95
$150
Catering company
Seaside Catering
$95
$150
NBRA BID Stakeholder Benefits
In 2013, the City conducted a request for proposals (RFP) for NBRA BID marketing
services. Through a competitive process, the Board selected Newport Beach &
Company (NB&Co.) for providing services through a City contract. NB&Co. has been
instrumental to the growing success of the NBRA BID's marketing efforts through the
creation of its brand Dine Newport Beach. The most public facing component is the
dinenb.com website that showcases the stakeholder businesses through the online
restaurant guide; posts with dining offers and promotions as well as culinary events; and
there is a blog for culinary news which further highlights stakeholder businesses. The
dinenb.com website has had a 30 percent increase in visits year over year.
Strategic advertisement is another value of the NBRA BID. Full, print campaigns are
placed each season in a variety of regional and local magazines such as Dining Out
Magazine, Laguna Beach Magazine, Orange Coast Magazine, Newport Beach
Magazine, and Locale Magazine. Advertising is placed in other regional and local
pieces such as the OC Guestbook, OC Official Visitor Map, OC Weekly and The Daily
Pilot. In addition, Internet advertising is deployed through sites such as Facebook,
TripAdvisor and Google.
The weekly Dine Newport Beach newsletter, which has had a 300 percent increase in
subscribers year over year, provides a brief write up on several of the local eateries,
and includes local culinary events and a neighborhood spotlight. Another unique service
for the NBRA BID is the Visit Newport Beach concierge at Fashion Island. Visitors can
call and visit in person to receive personal assistance locating a place to dine and even
receive assistance making reservations.
Lastly, one of the biggest culinary events managed by the NBRA BID is the annual
Newport Beach Restaurant Week. The event has steadily seen an increase in
participating restaurants with over 60 restaurants in the January 2016 event. In addition,
the online reservation system, OpenTable, reported a year -over -year increase of 17
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Introduction of an Ordinance to Amend the Stakeholder Business Structure and Annual
Assessment Levied for the Newport Beach Restaurant Association Business
Improvement District
July 12, 2016
Page 5
percent in the number of diners participating in Restaurant Week and there were over
176 million advertising and media impressions generated for the event.
The NBRA BID Board volunteers countless hours to achieve the following objectives:
1. Promote Newport Beach restaurants and stakeholders and showcase the local
culinary community to increase diner frequency and generate stakeholder sales.
2. Grow awareness of the Dine Newport Beach brand and the Newport Beach
dining destination.
3. Foster the Newport Beach culinary community in order to increase restaurant,
stakeholder and partner engagement.
4. Leverage the Dine Newport Beach brand and assets to generate incremental
revenue for increased program marketing and promotion.
The NBRA BID Board has discussed the proposed stakeholder amendment during
several of its public board meetings as well as providing email and written
communications to the stakeholder businesses. Following the City Council's approval of
Resolution No. 2016-81, City staff mailed letters to the stakeholders explaining the
amendment and included copies of the resolutions of intention.
Thus, City staff recommends adoption of Ordinance No. 2016-11, An Ordinance to
Amend the Stakeholder Business Structure and Annual Assessments Levied for the
Newport Beach Restaurant Association (Attachment A).
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A — Ordinance to Amend the NBRA BID Structure and Annual Assessments
Levied
.N
ATTACHMENT B
Newport Beach Restaurant Business Improvement District
Operating Budget
July 1, 2016 — June 30, 2017
Carryover from 2015-2016 $37,000
Stakeholder Assessments ($150K Less 10%) $135,000
Assessment Late Fees $6,500
City Funding $40,000
Event Income — Participation Fees $25,000
Event Income — Potential City Grant $10,000
Total $253.500.00
Advertising I Media
TOTALEXPENSES
$32,000
Event Marketing & Operational Expenses
$60,000
E -Newsletter I Website Content I Bloggers
$12,000
Digital Marketing I SEO
$7,500
Collateral
$5,000
Website Maintenance
$5,000
Graphic Design I Branding
$2,000
Social Media Promotions
$2,000
Public Relations
$2,000
Annual Meeting
$2,000
Community Event Participation
$2,500
Strategic Planning I Miscellaneous Expenses
$8,000
Research
$5,000
Marketing Consultation I Agency Fee
$60,000
BID Accounting Services
$18,000
BID Administration
$18,000
Operating Expenses I Insurance
$12,000
Dues I Memberships
$500
Total $253,500.00
NOTE: The NBRA BID has an amendment to its stakeholder categories and assessment
levies before the City Council. Should the amendment pass, the NBRA BID would amend
its FY 2017 budget as follows:
Stakeholder Assessments
Advertising I Media
Digital Marketing I SEO
Collateral
Graphic Design I Branding
Public Relations
1 O Less 10%) $189,000
$75,000
$12,000
$10,000
$2,500
S•�•
NBRA BID FY 2016-2017 Budget I Page 1 of 1
• e
ATTACHMENT C
ORDINANCE NO. 2016 -
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, AMENDING THE
STAKEHOLDER BUSINESS STRUCTURE AND ANNUAL
ASSESSMENTS LEVIED FOR THE NEWPORT BEACH
RESTAURANT ASSOCIATION BUSINESS
IMPROVEMENT DISTRICT
WHEREAS, on November 13, 1995, the City Council of the City of Newport
Beach ("City Council") adopted Ordinance No. 1995-55 establishing the Newport Beach
Restaurant Association Business Improvement District ("NBRA BID") pursuant to the
Parking and Business Improvement Area Law of 1989, California Streets and Highways
Code Section 36500 et seq. (1989 Law");
WHEREAS, on November 24, 2009, the City Council adopted Ordinance No.
2009-26 that amended the NBRA BID's annual benefit assessment levy;
WHEREAS, in past years, the NBRA BID referred to businesses within the
NBRA BID as "members" or "member businesses," the NBRA BID Advisory Board of
Directors thinks it is appropriate to use the term "stakeholder businesses" or
"stakeholders" going forward to refer to businesses located within the NBRA BID;
WHEREAS, the 1989 Law allows the City Council to amend the benefit
assessment levied on stakeholder businesses within the NBRA BID;
WHEREAS, the NBRA BID Advisory Board of Directors has requested that the
City Council amend the stakeholder business structure and assessments levied on its
stakeholder businesses;
WHEREAS, on June 28, 2016, the City Council adopted Resolution No. 20.16-81
declaring its intention to amend the stakeholder structure to include the following
businesses within the NBRA BID: any food -service business within the boundaries of
the city of Newport Beach, such as restaurants, markets with dine -in or take-out food
service, bars serving food, dessert shops, coffee shops, juice bars, catering companies
or similar type of food related business;
WHEREAS, on June 28, 2016, the City Council adopted Resolution No. 2016-81,
further declaring its intention to amend the NBRA BID's annual benefit assessments as
described herein;
WHEREAS, the City Council held a public meeting regarding the proposed
amendment of the stakeholder structure and the annual benefit assessment levy on July
12, 2016, where the City Council solicited testimony from the public and members of the
NBRA BID; and
WHEREAS, the City Council has scheduled a public hearing on August 9, 2016,
where members of the public and the NBRA BID are invited to give testimony and
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Ordinance No. 2016 -
Page 2 of _
submit written protests regarding the proposed amendment of the stakeholder structure
and the annual benefit assessment levy; and
WHEREAS, there was no written majority protest under California Streets and
Highways Code Section 36525 that would prevent the City Council from adopting this
ordinance.
NOW THEREFORE, the City Council of the City of Newport Beach ordains as
follows:
Section 1: Section 1 of Ordinance No. 2009-26 is amended in its entirety and
replaced with the following:
The stakeholder structure in the Restaurant Association Business
Improvement District shall include the following businesses: any food-
service business within the boundaries of the City of Newport Beach, such
as restaurants, markets with dine -in or take-out food service, bars serving
food, dessert shops, coffee shops, juice bars, catering companies or
similar type of food related business.
Section 2: Section 2 of Ordinance No. 2009-26 is amended in its entirety and
replaced with the following:
The City Council levies, imposes, and order the collection of a benefit
assessment levied upon persons conducting business within the
Restaurant Association Business Improvement District. Such benefit
assessment levied shall be as follows:
A.
Full service restaurant
$600
B.
Fast casual restaurant
$500
C.
Grocery or market
$500
D.
Coffee, tea or specialty shop
$150
E.
Dessert, bakery or treats
$150
F.
Juice bar or smoothie shop
$150
G.
Catering company
$150
Section 3: Section 3 of Ordinance No. 2009-26 is amended in its entirety and
replaced with the following:
The increased benefit assessment contained in this ordinance shall be
effective September 9, 2016. The benefit assessment increase shall be
collected from existing businesses in the NBRA BID by the City in one (1)
pro -rated annual installment. The benefit assessment for stakeholder
businesses established after September 9, 2016 shall be at the increased
rate, pro -rated according to the number of full months remaining in the
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Ordinance No. 2016 -
Page 3 of _
NBRA BID's fiscal year, starting on the day of the issuance of a business
license by the City.
Section 4: The recitals provided in this ordinance are true and correct and are
incorporated into the substantive portion of this ordinance.
Section 5: If any section, subsection, sentence, clause or phrase of this
ordinance is for any reason held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this ordinance. The
City Council hereby declares that it would have passed this ordinance and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
Section 6: The City Council finds the introduction and adoption of this
ordinance is not subject to the California Environmental Quality Act ("CEQA") pursuant
to Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable
indirect physical change in the environment) and 15060(c)(3) (the activity is not a
project as defined in Section 15378) of the CEQA Guidelines, California Code of
Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect
on the environment.
Section 7: Except as expressly modified in this ordinance, all other Sections,
Subsections, terms, clauses and phrases set forth in an ordinance related to the NBRA
BID shall remain unchanged and shall be in full force and effect.
Section 8: The Mayor shall sign and the City Clerk shall attest to the passage
of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be
published once in the official newspaper of the City, and it shall be effective thirty (30)
days after its adoption.
///
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Ordinance No. 2016 -
Page 4 of _
This ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach held on the day of , 2016, and adopted on the
day of 1 2016, by the following vote, to -wit"
AYES, COUNCILMEMBERS
NOES, COUNCILMEMBERS
ABSENT COUNCILMEMBERS
F-61 FA IN I = ON 91061 ilk E & MAN (01
ATTEST:
LEILANI I. BROWN, CITY CLERK
APPROVED AS TO FORM:
CITY A Y'S OFFICE
WE(J;l
AARON -d. HARP, CITY ATTORNEY
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