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HomeMy WebLinkAbout06 - Resolution of Intention to Disestablish the CdM BID and Fix the Time and Place of a Public HearingQ �EwPpRT CITY OF O � z NEWPORT BEACH <,FORN'P City Council Staff Report May 11, 2021 Agenda Item No. 6 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Grace K. Leung, City Manager - 949-644-3001, gleung@newportbeachca.gov PREPARED BY: Melanie Franceschini, Administrative Analyst mfranceschini@newportbeachca.gov PHONE: 949-644-3028 TITLE: Resolution No. 2021-40: Resolution of Intention to Disestablish the Corona del Mar Business Improvement District and Fix the Time and Place of a Public Hearing ABSTRACT: The Corona del Mar Business Improvement District (CdM BID) Advisory Board of Directors (Board) has submitted the BID's annual report and budget for the City Council's review and approval. The Board also submitted a letter requesting the disestablishment of the CdM BID prior to Fiscal Year 2021-22 and a proposal on how to dispose of the CdM BID's assets. RECOMMENDATION: a) Determine this 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 this action will not result in a physical change to the environment, directly or indirectly; b) Modify the Corona del Mar Business Improvement District's recommended Proposed Plan to Dispose of Assets by donating a portion of the physical assets to Visit Newport Beach, Inc. instead of the City of Newport Beach; c) Approve the Corona del Mar Business Improvement District's Fiscal Year 2020-21 Annual Report; and d) Adopt Resolution No. 2021-40, A Resolution of the City Council of the City of Newport Beach, California, Declaring its Intention to Disestablish the Corona del Mar Business Improvement District and Fix the Time and Place of a Public Hearing for June 8, 2021. DISCUSSION: The Corona del Mar Business Improvement District (CdM BID) was formed in 1997 (Ordinance No. 97-24) pursuant to the Parking and Business Improvement Area Law of 1989 (1989 Law), codified in the Streets and Highways Code Sections 36500 et seq. 6-1 Resolution No. 2021-40: Resolution of Intention to Disestablish the Corona del Mar Business Improvement District and Fix the Time and Place of a Public Hearing May 11, 2021 Page 2 The CdM BID was established for the purpose of financing activities and programs that benefit the member businesses located and operating in the area. The CdM BID territory encompasses the area generally located along East Coast Highway from Hazel Drive to Avocado Avenue in Corona del Mar. A boundary map is attached to the Resolution of Intention (Attachment C). The CdM BID is nearing the end of its FY 2020-21 operating period and the Board, which serves in an advisory capacity to the City Council, has requested disestablishment of the BID. Pursuant to the 1989 Law, an annual report and plan on how to dispose of assets must be prepared and filed with the City Council and a public hearing must be held prior to the BID's disestablishment. If the City Council adopts the Resolution of Intention, the public hearing will be held on June 8, 2021. The CdM BID Board has prepared and submitted an annual report for the City Council's review and approval (Attachment A). The report includes a summary of the CdM BID's FY 2020-21 accomplishments and revenues, as well as its proposed plan on how to dispose of the BID's assets. In addition, the CdM BID Board met on March 25 and recommended that its chair submit a letter to the City Council explaining the reasons for disestablishment and thanking the City Council for its support over the years (Attachment B). Fiscal Year 2020-21 Accomplishments The CdM BID Board completed its priorities as identified in its Vision 2020 plan. Specific focus areas included its ongoing marketing, outreach and communication efforts, and regular community support programs and improvement projects. Board members have worked on several projects, which were consistent with the BID's efforts to revitalize the business district and support the economic growth of its member businesses. Highlights of some of the accomplishments from FY 2020-21 are listed below. 1. Business Reopening & Recovery Support. With the City's COVID-19 Economic Relief Funding Support, the CdM BID was able to assist businesses in safely reopening under the State's guidelines. The businesses were provided with fabric face masks, floor decals to promote social distancing, hand sanitizer, and "Shop Local" wristbands and tote bags. 2. CdM District Holiday Marketing. The CdM BID successfully partnered with the Corona del Mar Chamber of Commerce to hold a "re -imagined" Christmas Walk experience. The traditionally one -day event was held throughout the whole month of December and featured a social media campaign to shop local, a guide with offers, discounts and specials that was mailed out to the surrounding community, and a holiday lighting and d6cor contest for the businesses. The community and visitors were invited to vote for the winners. The winning businesses were recognized and given a donated prize. 6-2 Resolution No. 2021-40: Resolution of Intention to Disestablish the Corona del Mar Business Improvement District and Fix the Time and Place of a Public Hearing May 11, 2021 Page 3 3. "Shop Local" Marketing Campaign. The BID's "Shop Local" marketing campaign was an on-going, coordinated effort with the Corona del Mar Chamber of Commerce. The campaign's branded design theme was used strategically throughout the year to promote the business district. The CdM BID worked with a social media specialist to promote various business industries within the CdM Village and entice local residents to support local business. The "Shop Local" marketing campaign will continue to be used in the immediate future by the Corona del Mar Chamber of Commerce to encourage more local business during this economic recovery period. The remainder of the FY 2020-21 activities listed in the annual report include the website and communication efforts, the street light banner program, and the marketing outreach efforts for events and activities that occurred within the CdM BID boundaries. FY 2020-21 Operating Results The estimated year-end operating budget for the CdM BID's FY 2020-21 is summarized in the table below. Income (City Funding, Assessments and Late Fees) $94,561 Fund Balance (Retained Earnings from FY 2019-20) $70,918 Total Income and Fund Balance $165,479 Total Expenditures $129,359 Fund Balance (Retained Earnings) $36,120 Proposed Disestablishment The CdM BID Board believes the BID has fulfilled its original mission to make Corona del Mar a desirable location to conduct business. Thanks to the many years of volunteer work and City support, the CdM BID was able to complete a majority of its Vision Plan, which included various beautification elements and enhancements, as well as marketing and promotion of the business district. The CdM BID Board requests the City Council disestablish the Corona del Mar Business Improvement District at the end of FY 2020- 21. The CdM BID's assets are to be disposed as follows: • BID Funds: Per the 1989 Law, any remaining revenues derived from the levy of assessments shall be refunded to the owners of the businesses operating within the BID, that are current in their annual assessment, by applying the same method and basis that was used to calculate the assessment levied this fiscal year. It is estimated that $59,329 remains in the CdM BID's budget, as of April 30, 2021. With contractual obligations and expenditures through the end of the fiscal year totaling an estimated $23,209, the CdM BID would have an estimated $36,120 remaining in the account. The CdM BID Board formally voted and proposes that the $36,120 remaining be returned to the stakeholders. 6-3 Resolution No. 2021-40: Resolution of Intention to Disestablish the Corona del Mar Business Improvement District and Fix the Time and Place of a Public Hearing May 11, 2021 Page 4 Physical Assets: Per the 1989 Law, physical assets of the BID may be donated to a non-profit or sold. If the physical assets are sold, any revenue derived from the sale of assets shall be added to the BID funds, which are to be refunded to the stakeholders. If the physical assets are donated, the select entities would be financially responsible for the storage, maintenance, repair, installation and removal of the physical assets. The CdM BID's physical assets include four (4) sets of twenty-seven (27) banners (the CdM 5k, Christmas Walk, Happy Holiday, and Explore CdM), in addition to a variety of holiday decor, such as LED mini -lights, a 20' decorated Christmas tree, fiberglass presents, and garlands. Maintaining the banners, including their hanging, removal and storage, totals approximately $7,000 annually. Storing, placing and removing the holiday decor totals approximately $23,000 annually. The CdM BID Board formally voted and proposes that the four (4) sets of twenty- seven (27) banners (the CdM 5k, Christmas Walk, Happy Holidays and Explore CdM) be donated to the nonprofit, Corona del Mar Chamber of Commerce. As for the remainder of the holiday decor, the CdM BID Board voted and proposed that the items be donated to the City. However, the $23,000 expense was not factored into the budget staff is proposing for FY 2021-22 and the City only budgets for holiday decorations at select City facilities (the Civic Center, the Central Library, and Marina Park). Visit Newport Beach, Inc., also a nonprofit, has offered to take over the responsibility and annual costs of the Corona del Mar holiday decor. Therefore, staff recommends that the City Council modify the CdM BID Board's plan to reflect that the decor will be donated to Visit Newport Beach, Inc. Resolution of Intention The Resolution of Intention (Attachment C) for the CdM BID provides for the following: • Disestablishes the Corona del Mar Business Improvement District at the end of FY 2020-21. • Sets the public hearing for June 8, 2021 at 4 p.m. or as soon thereafter the matter may be heard that evening. Per the 1989 Law, a resolution of intention to disestablish the CdM BID must be adopted by the City Council prior to holding a public hearing, and considering the adoption of an ordinance formally disestablishing the CdM BID. The City Council may revise, change, modify the Corona del Mar Business Improvement District's Plan to Dispose of Assets. FISCAL IMPACT: City staff will be managing the refund of assessments to the CdM BID stakeholders and the closure of CdM BID financial accounts once the BID is formally disestablished. rem Resolution No. 2021-40: Resolution of Intention to Disestablish the Corona del Mar Business Improvement District and Fix the Time and Place of a Public Hearing May 11, 2021 Page 5 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 — CdM BID FY 2020-21 Annual Report and Plan for Disposal of Assets Attachment B —Letter from the CdM BID Board Chair Attachment C — Resolution No. 2021-40 6-5 ATTACHMENT A U 0 DFL Corona del Mar Business Improvement District ANNUAL REPORT Year -End Report for FY 2020-21 & Proposed Disestablishment of the CdM BID This is the 25th annual report for the Corona del Mar Business Improvement District (CdM BID), as required by Section 36533 of the California Streets and Highways Code. 1. Review of Accomplishments and Activities for Fiscal Year of July 1, 2020 to June 30, 2021. The CdM BID worked diligently in assisting its members during a tough economic year and successfully completed project goals, maintained existing programs, and developed new projects within the CdM Business District as reflected below. A. MARKETING CAMPAIGNS & BUSINESS RECOVERY PROGRAMS 1. Business Re -Opening and Recovery Plan FY 2020-21 The businesses of the Corona del Mar Business Improvement District endured a great deal of hardship during the COVID-19 pandemic. The BID Advisory Board created and successfully implemented a "Business Re -Opening and Recovery Plan" to assist and support our local businesses during these difficult times. The plan consisted of the components below: 1.1 Formation of Business Re -Opening & Recovery Marketing Working Group The CdM BID immediately formed a Business Re -Opening & Recovery Marketing Working Group to focus on short and long-term needs of our businesses. 1.2 Reduction of Member Assessment Fees To ease our business members' finances during the pandemic, we reduced our members assessment fees from 150% of the City's business license fee to 70% of the City's business license fee. This reduction of assessment fees reduced our original budgeted income of $90,000 to $55,000, a $35,000 deficit to our overall income budget. 1.3 CdM COVID-19 Care Kit In an effort to assist our businesses with their immediate needs of re -opening safely under the guidelines, we provided our members with a CdM branded COVID-19 Care Kits. Items in the Care Kits included fabric face masks, floor decals promoting social distancing, gel hand sanitizers, "Shop Local" wristbands and tote bags. 2. CdM District Holiday Marketing Campaigns December is a big revenue month for our Corona del Mar businesses, with high foot traffic due to the CdM Chamber's Annual Christmas Walk. With the event cancelation, the CdM BID partnered with the CdM Chamber to promote the business district through a "reimagined" Christmas Walk. Components of this program included: 2.1 Holiday Lighting & Decor Contest CdM BID Members were invited to participate in a month-long decorating initiative designed to drive foot traffic into the village and provide businesses with PR through social media, email marketing, and local press. The BID purchased and provided lights and decor materials to each participating business. Donated prizes were awarded to the decorating contest winning businesses in a variety of categories. The main objective was to light -up and decorate the district for the holidays and draw community spectators to shop and dine CdM. Contest winners were chosen on social media and online by our followers and visitors. 0=0 2.2 Christmas Walk "Reimagined" Direct Mail Guide The CdM BID co-sponsored the CdM Chamber's Christmas Walk "Reimagined" Guide, which was direct mailed to 6,000 CdM residents promoting different businesses, their offerings, discounts, and specials for the month of December. 2.3 Social Media Marketing Campaign The CdM BID launched a major district -wide social media campaign supporting the holiday and shop local programs. 3. Membership Informational Brochures The CdM BID produced its annual informational brochures illustrating the past accomplishments and goals of the CdM BID. The brochures included the background and description of the BID, information on membership, billing, and how to get more involved. The brochure was included in the CdM BID's annual billing. 4. Website and Communications The CdM BID continued its interactive webpage with enhanced features to improve communications with, and services for, its members. The webpage also included a business directory feature to further market BID members, and provided the members with the option to pay their assessments online. Additional webpage features include news releases, a COVID-19 resource center, and meeting postings with an integrated connection to the BID's social media platforms. 5. Marketing and Media Campaigns The Board continued and strengthened the ongoing "Shop & Dine Local" marketing campaign in a coordinated effort with the CdM Chamber of Commerce. This campaign involved a varietyof marketing and media components to promote the business district's retailers and restaurants. The campaign included a coordinateddesign theme, which was strategically used in the business district's marketing, such as street light banners, direct mail pieces, digital/print advertisements, social media, and more. The BID worked with a social media specialist to promote the various business industries within the CdM Village and entice local residents to support local businesses. 6.Street Light Banner Program The BID continued funding the district's rotating street light bannerprogram, which highlights the Shop & Dine Local Campaign, annual CdM signature community events (CdM Scenic 5K and CdM Christmas Walk), as well as the festive banners promoting the holiday shopping and dining season. The street light banner program continued to provide the business district a senseof community spirit, pride and promotion year-round. B. BUSINESS DISTRICT HOLIDAY DECOR PROGRAM The BID funded the festive holiday decor for the district and provided annual management of the median holiday decorations within the business district. The holiday decor was purchased by the BID through a City professional services agreement with Dekra-Lite. C. BID ADMINISTRATION & FINANCIAL REPORTING Administrative Consulting and Reporting The BID continued contracting an administrator to help manage the BID. The BID Administrator provided support to formulate, coordinate, and administer the BID and routinely reported to the Board. Activities included preparing and coordinating agendas, memos, communications and/or reports. Otherduties included serving as a liaison with City staff and keeping the Board programs on track. 6-7 2. Financial Reporting, Bookkeeping and Billing Services The BID continued contracting a bookkeeper to help manage the BID's finances. Bookkeeping services consisted of coordinating the member assessment billing, managing the accounts receivable and payable, preparation of the monthly financial reports and providing financial reporting to City staff and the BID Board. 3. Estimated Year -End Costs of Marketing Programs and Activities for FY 2020-21 Marketing Campaigns and Business Re-Opening/Recovery *$35K of this amount was in a Reduction of Assessments $63,057 Holiday Decor and Street Light Banner Program $23,400 Accounting and Bookkeeping $20,629 Administration $22,273 TOTAL $129,359 4. Surplus Carryover from Fiscal Year 2020-2021 It is estimated that approximately $30,000-$35,000 will remain from FY 2020-21. 5. Recommended Distribution of Funds and Assets Monetary Assets: Upon the disestablishment of the CdM BID, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be refunded to the CdM BID businesses then located and operating within the area in which assessments were levied, by applying the same method and basis that was used to calculate the assessment. Physical Assets: The CdM BID's physical assets consists of the following: • Twenty-seven (27) 30" x 96" CdM 5K banners • Twenty-seven (27) 30" x 96" Christmas Walk banners • Twenty-seven (27) 30" x 96" Happy Holiday banners • Twenty-seven (27) 30" x 96" Explore CdM banners • Twenty-seven (27) 30' Mountain Pine garlands • 5mm Commercial Grade Warm White LED Mini -lights • 5mm Commercial Grade Cool White LED Mini -Lights • One (1) 20' Decorated Garland Branch Tree with LED Star Topper • One (1) 6.5' Illuminated Gift Box • One (1) 36" Fiberglass Present with LED Lights • Two (2) 24" Fiberglass Presents with LED Lights • Four (4) 6' Sections of In -Line Mixed Foliage Double Garland Decorated with 6' Red Shiny UV Ornaments and 36' Red Structural Outdoor Rate Bow and 5mm Commercial Grade Warm White LED Mini -Lights The four (4) sets of twenty-seven (27) banners (the CdM 5K, Christmas Walk, Happy Holiday and Explore CdM banners) are to be donated to the non-profit, the Corona del Mar Chamber of Commerce. The remaining holiday decor is to be donated to the Gity of Newport Be the non- profit, Visit Newport Beach, Inc. •: Should the entities selected to receive the donations not be able to accept the donations, which includes the financial responsibility of storing, maintaining/repairing and installing the banners/decor, then the physical assets are to be turned over to the City of Newport Beach to be auctioned off. Any revenues derived from the sale of the assets will be added to the monetary assets of the BID, which are to be refunded to the CdM BID businesses. • • Advisory Board Bernie Svalstad Chairperson Scott Laidlaw Vice Chair Keith Dawson Treasurer Andrea Sotomayor Secretary Ed Hanley Director Jasmin Mortazavi Director Hamid Kianipur Director Scott LaFleur Director Ernie Caponera Director CDM BID Financial Reporting Community Business Solutions (949) 200-9851 Marketing & Administration Corona del Mar Chamber of Commerce (949) 673-4050 ATTACHMENT B Corona del Mar BUSINESS IMPROVEMENT DISTRICT /City of Newport Beach March 25, 2021 Dear Newport Beach City Council, RE: Request for Dissolution of the CdM BID On behalf of the Advisory Board of Directors for the Corona del Mar Business Improvement District (CdM BID), we thank the City Council for its support of the CdM BID over the past 24 years. The CdM BID was formed in 1997 by a coalition of approximately 375 business owners uniting to support the "Vision Plan" developed to make Corona del Mar a desirable location to conduct business. Through many years of volunteer work and the support of the City, a majority of components of the original Vision Plan were successfully completed providing Corona del Mar with a safer pedestrian environment, lush landscaping, street furniture, increased outdoor dining, a town center and clock tower, and many more design elements and enhancements to the CdM Village Business District. In recent years, as a majority of the Vision Plan components were completed or rejected by city restrictions, the CdM BID has been coordinating with the Corona del Mar Chamber of Commerce to assist in efforts to promote the economic environment through marketing and promotion of the district and its businesses. The CdM BID Advisory Board believes the BID has fulfilled its original mission and therefore seeks to dissolve the CdM BID as of June 30, 2021 at the end of the current fiscal year. In the event there are funds left over from the 2020-2021 budget, the BID Board will recommend to council allocation of such funds in the annual report. Sincerely, 53evtk Sfwbt" Bernie Svalstad, Chairman Corona del Mar Business Improvement District RECEIVE PROJECT COMMUNICATIONS FROM THE CDMBID www.CdMVillage.com Fcicebook/CdM BID 6-10 ATTACHMENT C RESOLUTION NO. 2021-40 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, DECLARING ITS INTENTION TO DISESTABLISH THE CORONA DEL MAR BUSINESS IMPROVEMENT DISTRICT AND FIX THE TIME AND PLACE OF A PUBLIC HEARING WHEREAS, the Parking and Business Improvement Area Law of 1989 (California Streets and Highways Code Section 36500 et seq.) ("Act") authorizes cities to establish parking and business improvement areas for the purpose of imposing assessments on businesses for certain activities; WHEREAS, on July 14, 1997, the City Council of the City of Newport Beach ("City") adopted Ordinance No. 97-24 establishing the Corona del Mar Business Improvement District ("CdM BID"); WHEREAS, the assessments collected on behalf of the CdM BID have enabled the CdM BID to provide promotion, marketing and advertising opportunities along with general public area improvements and maintenance programs within the CdM BID; WHEREAS, the Act requires that each year, the activities, boundaries, and assessments of the CdM BID be reviewed by the CdM BID's advisory board ("Advisory Board") for purposes of making recommendations to the City Council, and an annual report be filed and approved by the City Council for each fiscal year; WHEREAS, on March 25, 2021, the Advisory Board voted to recommend that the City Council disestablish the CdM BID due to its having completed the projects under its Vision Plan and having fulfilled its original mission; and WHEREAS, the Advisory Board has prepared an annual report for the 2020-2021 fiscal year and has included a proposal for the disposal of the CdM BID's assets upon disestablishment, which report is on file in the City Clerk's Office ("Annual Report"). NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows.. Section 1: The City Council hereby approves the Annual Report. 6-11 Resolution No. 2021 - Page 2 of 3 Section 2: The City Council hereby declares its intention to disestablish the CdM BID for the reason that the CdM BID has completed the projects in its Vision Plan and has fulfilled its original mission. Should the CdM BID be disestablished, in accordance with California Streets and Highways Code Section 36550(b) assets acquired with the revenues from the assessments levied within the CdM BID shall be donated to the Corona del Mar Chamber of Commerce and the portion designated in the Annual Report for the City of Newport Beach shall be donated to Visit Newport Beach, Inc. Pursuant to California Streets and Highways Code Section 36551(a), any remaining revenues derived from the levy of assessments and the sale of assets, if any, shall be refunded to the owners of businesses then located and operating within the CdM BID by applying the same method and basis that was used to calculate the assessment most recently levied. Section 3: Pursuant to California Streets and Highways Code Section 36550(b), on Tuesday, June 8, 2021 at 4:00 p.m., or as soon thereafter as the matter may be heard, in the City Council Chambers located at 100 Civic Center Drive, Newport Beach, California, a public hearing shall be held by the City Council on the disestablishment of the CdM BID. Section 4: The City Clerk is directed to give notice of the public hearing on the disestablishment of the CdM BID in accordance with California Streets and Highways Code Section 36523. Notice of the public hearing shall be given by publishing this resolution of intention in a newspaper of general circulation in the City once, for at least seven (7) days before the public hearing, and by mailing a complete copy of this resolution by first-class mail to each business owner within the CdM BID within seven (7) days following the City Council's adoption of this resolution of intention. Section 5: The recitals provided above are true and correct and are incorporated into the operative part of this resolution. Section 6: If any section, subsection, sentence, clause or phrase of this resolution 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 resolution. The City Council hereby declares that it would have passed this resolution, 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. 6-12 Resolution No. 2021 - Page 3 of 3 Section 7: The City Council finds the adoption of this resolution 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, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 8: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution. ADOPTED this 11 th day of May, 2021. Brad Avery Mayor ATTEST: Leilani I. Brown City Clerk APPROVED AS TO FORM: CATTORNEY'S OFFIC IC -^A� C, Aaon C. Harp City Attorney 6-13