TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
George Gabriel, Assistant to the City Manager
SUBJECT:Title
Consideration of Actions Related to the North Manhattan Beach Business Improvement District including: 1) Conceptual Approval to Transition Ongoing Management to a Non-Profit and Execute a Future Agreement with the Non-Profit to Provide Services to the Business Improvement District, and 2) Authorizing Expenditures and Appropriating $10,000 for Managing the North Manhattan Beach Business Improvement District Activities and Initiatives (City Manager Moe).
(Estimated Time: 20 Mins.)
A) APPROVE
B) AUTHORIZE AND APPROPRIATE
Body
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RECOMMENDATION:
Staff recommends that the City Council:
1. Approve a conceptual plan of transitioning ongoing management of the North Manhattan Beach Business Improvement District to a non-profit and execute a future agreement with the non-profit to provide services to the business improvement district; and
2. Authorize and appropriate $10,000 from the Parking Fund for developing or utilizing an existing non-profit to manage the North Manhattan Beach Business Improvement District activities and initiatives.
FISCAL IMPLICATIONS:
The North Manhattan Beach Business Improvement District (NMB BID) is funded through an 80% surcharge to the business license tax paid by those businesses located within the district, not to exceed $500 annually. At the current rate, the assessments total approximately $25,000 per year and are held separately within the Parking Fund. Should the City Council appropriate and authorize funds, the NMB BID’s balance will be deducted by an amount not to exceed $10,000.
Should the City Council execute an agreement with a non-profit to manage the BID’s funds, the City and non-profit will determine how best to disburse the NMB BID’s fund balance over time and in accordance with the NMB BID’s approved budget.
BACKGROUND:
The North Manhattan Beach Business Improvement District was formed in 1969 under the State’s Parking and Business Improvement District Act of 1965. The BID was limited in scope and was mainly responsible for addressing parking acquisition and construction. Because the opportunity for acquiring additional parking in the North End is limited, business district members wanted to use the funds for other types of activities, such as physical improvements, beautification, signage, marketing, and promotion. To accommodate this request, in January 2004, the City Council dissolved the 1969 Business Improvement District and created the current Business Improvement District using the broader 1989 BID Act.
Advisory Board
The 1989 Business Improvement District Act requires that the City Council select a BID Advisory Board. Advisory Board duties include recommendations to the City Council on expenditure of revenues derived from the assessments, as well as the method and basis of levying the assessments.
The BID last elected an Advisory Board to two-year terms in 2022 and will have an election later this year for the following two years. The full roster of board members-elect, applicable titles and business representations are as follows (in alphabetical order):
Abbot Lawrence IV - Pancho’s
Harry Ashikian - Salvatore’s Shoe Repair
Justin Maxwell - North End Caffe
Lorenzo Pitera (Vice Chairperson) - Baja Sharkeez
Mike Simms (Chairperson) - Nick and Son’s Market
Roxanne Faire (Secretary) - Aesthetics on Highland
Tim Ryan - El Porto Laundry
Councilmember Napolitano currently serves as the BID’s City Council representative with Councilmember Montgomery as the alternate.
DISCUSSION:
Since 2004, city staff has taken an active role in managing NMB BID activities by: drafting and publishing agendas/minutes, liaising NMB BID activities between City departments, executing agreements on behalf of the NMB BID, and managing expenditures and revenues of the NMB BID. The City’s responsibilities for the NMB BID contrast significantly with those of the City’s other BID, the Downtown Business Improvement District (Downtown BID). The Downtown BID is managed by a non-profit, the Downtown Manhattan Beach Business & Professional Association (DMBBPA). Therefore, the City has not had to take on the same responsibilities for the Downtown BID as those for the NMB BID.
Additionally, DMBBPA non-profit status allows the Downtown BID to realize greater efficiencies to expedite decisions, execute contracts and expend funds when necessary. For these reasons, in recent years the NMB BID has sought to explore how to function in a similar manner as the Downtown BID. As identified in the approved 2024 Activity Plan, the NMB BID has decided to explore the feasibility of becoming a professional non-profit association similar to the DMBBPA by utilizing the Chamber of Commerce’s non-profit status.
In consideration of this, the City Council adopted Resolution No. 23-0085 approving a pilot agreement with the Chamber of Commerce in the amount of $67,300 for NMB BID management and executive coordination services. One of the justifications for this agreement was the need for contract staff to be available to shepherd the process of establishing a non-profit corporation or utilizing an existing non-profit corporation.
Following research to determine next steps, it was determined that establishing a non-profit corporation or utilizing an existing non-profit corporation needs an appropriation of $10,000 to prepare legal documents such as: 1) filing Articles of Incorporation and tax-exempt status, or 2) amending an existing non-profit’s Articles of Incorporation to include NMB BID activities.
Should City Council approve the conceptual plan of transitioning ongoing management of the North MB BID to a new or existing non-profit, staff will return to the City Council with an agreement between the City and the non-profit and formulate a plan for managing the NMB BID’s fund balance over a period of time.
CONCLUSION:
Staff recommends that the City Council:
1. Approve a conceptual plan of transitioning ongoing management of the North Manhattan Beach Business Improvement District to a non-profit and execute a future agreement with the non-profit to provide services to the business improvement district; and
2. Authorize and appropriate $10,000 for developing or utilizing an existing non-profit to manage the North Manhattan Beach Business Improvement District activities and initiatives.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. 2024 Annual Report, Budget, and Activity Plan