17 Staff Report.PBID
PREPARED BY: Monica Renn
Economic Vitality Manager
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 11/05/2019
ITEM NO: 17
DATE: October 23, 2019
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Acting as the Property Owner Representative for the Town’s Parcels Included
in the Proposed Property Business Improvement District (PBID), Discuss the
Draft Service Plan for a PBID in Downtown Los Gatos, Provide Input on the
Structure and Parameters of the Draft Plan, and Direct Staff on the Next Steps
for Working with the PBID Steering Committee on Behalf of the Town.
RECOMMENDATION:
Acting as the property owner representative for the Town’s parcels included in the proposed
Property Business Improvement District (PBID), discuss the draft Service Plan for a PBID in
downtown Los Gatos, provide input on the structure and parameters of the draft Plan, and
direct staff on the next steps for working with the PBID Steering Committee on behalf of the
Town.
BACKGROUND:
A Property Business Improvement District (PBID) is a special district in which properties are
assessed a tax to fund services or improvements that benefit the assessed propert ies. These
benefits are those activities above and beyond what is traditionally provided by the Town,
referred to as baseline services. It is important to note that any benefit received by a parcel
must be equal to the assessment paid, except in the case of benefits identified as general
benefits. A general benefit is considered a spill over benefit to other properties not directly
assessed through the District. Thus, when considering the formation of a PBID, the assessment
map and Service Plan are largely driven by the direct special benefit for assessed properties
that exceed any baseline services provided. If a PBID is formed, the Town and the PBID would
enter into a contract that highlights the Town’s baseline services so that the PBID may illustrate
benefits above and beyond the baseline services.
PAGE 2 OF 5
SUBJECT: Discuss and provide direction on the draft Service Plan from the proposed
PBID.
DATE: October 23, 2019
BACKGROUND (continued):
The Los Gatos Chamber of Commerce and a group of commercial property and business
stakeholders have been working together since early 2019 to form a PBID in and around
downtown Los Gatos. This group is functioning as the PBID Steering Committee. At its March
5, 2019 meeting, the Town Council provided the Chamber of Commerce with funding in the
amount of $22,000 as “seed money” to explore a PBID and cover the first phase of the project.
This phase is nearing its end and included development of a feasibility study to gauge whether a
PBID could be successful in Los Gatos.
This first phase and feasibility study examined several scenarios for a PBID, including varying
geographic areas and assessment formulas. The PBID Steering Committee has hosted a series
of public open houses and one-to-one meetings with property owners to discuss the draft
Service Plan (Attachment 1) and the proposed assessment of a subject property, and to collect
feedback from the property owners.
In order for a PBID to be established, at least 51% of property owners must vote in support of
the District during the petition drive. This vote is weighted by the percentage of property each
owner has in the District. This is not the final vote; however, it is understood that if support is
gained through the petition drive, it is most likely the PBID will be successful in the final ballot
stage. For the purposes of this report, the phases include:
• Phase One - outreach, feasibility study, and draft Service Plan
• Phase Two - formation of the draft Management District Plan and petition drive
The Town plays two distinct roles in the formation and adoption of a PBID: 1) Property
Owner/stakeholder, and 2) Governing body whom adopts the resolution for the PBID to be
enacted after a successful vote of the property owners and collects the assessment for
distribution to the district.
This report and discussion is specifically focused on the Town as a property owner, thus it is
necessary to bring this item forward to the Town Council during a public meeting to provide the
opportunity for dialog on the proposal. This is the first opportunity for the Town Council as a
collective body to receive and discuss the draft Service Plan including the proposed map and
assessment amount.
DISCUSSION:
The attached draft Service Plan provides background information and an outline for the what
the Steering Committee is currently proposing for the Los Gatos Property Business
Improvement District (LGPBID). Throughout Phase One, the Steering Committee and
representatives from the consultant, Civitas, met with individual stakeholders to collect
PAGE 3 OF 5
SUBJECT: Discuss and provide direction on the draft Service Plan from the proposed
PBID.
DATE: October 23, 2019
DISCUSSION (continued):
feedback on the proposed property map, assessment formula, and special benefits anticipated
with the District.
Below is a high-level summary of items to assist the Council with its discussion, input, and
direction to staff.
Assessment Overview
• The total proposed PBID assessment to be collected annually is $424,267.20.
• There are 145 parcels with 117 property owners included within the proposed
boundaries.
• Of the total, the Town is the largest property owner, owning 638,056 square feet, equal
to 20.99% of the included parcels.
• The current assessment total for the Town is $89,073.80.
• Town property includes the Civic Center, Pageant and Plaza Parks, downtown parking
lots, and other properties, such as the Adult and Youth Recreation Centers and Forbes
Mill.
Proposed Services
The Service Plan identifies three primary categories of services/benefits: Destination
Development, Destination Marketing, and Infrastructure (see Attachment 1). Each category is
proposed to receive 30% of the District funds with the remaining 1 0% supporting the
administration of the District.
For each category, below is an overview of the baseline services currently provided by the Town
to provide context for the proposed PBID.
• Destination Development
The proposal includes a variety of examples that reflect potential projects that could be
a benefit. These options are dynamic and may change as the downtown continues to
evolve. Example of baseline services currently provided by the Town include:
o Annual contract with the Chamber of Commerce to provide the Town’s Visitors’
Information Center
o Regular maintenance of the planter boxes, including weeding, planting, and
sprinkler maintenance
o Regular sidewalk pressure washing
o Regular parking lot maintenance
PAGE 4 OF 5
SUBJECT: Discuss and provide direction on the draft Service Plan from the proposed
PBID.
DATE: October 23, 2019
DISCUSSION (continued):
o Regular maintenance of parks, including watering, mowing/pruning, turf
renovation, furniture upkeep, and fountain maintenance (Plaza Park)
o Garbage and recycling contract for regular collections, and additional weekend
and peak hour collection by Town staff
o Regular litter and debris removal throughout downtown
o Downtown street sweeping
• Destination Marketing
The Town is limited in its financial capacity to provide marketing services for specific
areas or shopping districts in Los Gatos. During the time when Redevelopment Agency
funds were available, the Town marketed Los Gatos as a destination at the San Jose
International Airport and participated in other regional marketing campaigns including
printed collateral. The Town’s current contract with the Chamber of Commerce for the
Town’s Visitors’ Information Center does include some of the items listed within the
Destination Marking section of the draft Service Plan. Downtown businesses could
benefit from increased targeted marketing. The Town Council may wish to weigh in on
some of the specific examples and discuss the potential outcomes associated with these
activities.
• Infrastructure
The Town is dedicated to maintaining its infrastructure and providing regular
maintenance and upkeep of public spaces. Many of the baseline services have been
highlighted in the Destination Development section of this repor t. The Town also has
regularly scheduled and special capital projects that provide new and refreshed
infrastructure projects.
While there are some high-level examples provided in the draft Service Plan, it should
be noted that the LGPBID could use funds to support potential infrastructure projects
initiated by the Town Council as well. For example, if there was a streetscape project in
Downtown, the LGPBID Board of Directors could vote to dedicate the infrastructure
portion of the funds to support these projects or enhance them through additional
services/projects.
Initial Assessment Rate
The draft Service Plan provides two rates in which properties may be assessed, $0.20 or $0.10
per square foot. Some Town properties are assessed at the non-profit rate of $0.10 per square
foot, while all of the Town’s public parking lots are assessed at $0.20 per square foot, the same
rate as privately-owned commercial properties.
PAGE 5 OF 5
SUBJECT: Discuss and provide direction on the draft Service Plan from the proposed
PBID.
DATE: October 23, 2019
DISCUSSION (continued):
LGPBID Management
The LGPBID would create a new non-profit to oversee the day-to-day operations of the District
as described in the draft Service Plan. There would be a Board of Directors made up primarily
of property owners paying into the District and their representatives. The draft Plan proposes
one seat each for the Chamber of Commerce and Town of Los Gatos. Staff understands that in
addition to holding a seat on the Board, the Chamber of Commerce would provide the day-to-
day oversight of the District separate from their duties as a Chamber of Commerce.
CONCLUSION:
This agenda item provides the Town Council as property owner an opportunity to discuss the
proposed Plan, including the proposed structure and benefits, assessment amount,
management, and District map. The Council may then provide direction to staff on next steps
for working with the LGPBID Steering Committee on behalf of the Town.
COORDINATION:
This report was prepared in coordination between the Town Manager’s and Town Attorney’s
Offices.
FISCAL IMPACT:
If the PBID is established, the Town would be responsible for remitting the assessment amount
that is determined by the Management District Plan. Should the draft Service Plan be adopted
as it is currently structured, the assessment amount for the Town would be $89,073.80 annually
for a minimum of five years.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachment:
1. LGPBID Draft Service Plan