Downtown district may see new funds

Photo: The Downtown Berkeley Business Improvement District could have up to four times as much money to use in its Downtown revitalization efforts, as the district may to adopt a new method of collecting funds from property owners.
Carli Baker/Staff
The Downtown Berkeley Business Improvement District could have up to four times as much money to use in its Downtown revitalization efforts, as the district may to adopt a new method of collecting funds from property owners.

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The Downtown Berkeley Business Improvement District, responsible for improving the business and consumer climate in the area, may soon have four times as much money to work with in its ongoing effort to revitalize Downtown Berkeley, as the district looks to adopt a new method of collecting funds from property owners.

The Downtown Berkeley Association, which oversees and administers the business improvement district, aims to charge private property owners and non-property tax paying entities - such as the city of Berkeley, UC Berkeley and nonprofit organizations - based on the square footage of their property, rather than collect its funds through business license fees. Many property owners supported the change in a petition last August, and the association's official proposal will go before the Berkeley City Council on April 26, with a public hearing scheduled for June 28.

"(The association) decided to evaluate where the (district) has been, what it is today and where it wants to go," John Caner, executive director of the association said. "There was a sense that we didn't have the impact that was desired."

Caner said the proposed change allows for a more fair and systematic allocation of the district's funds. Property owners tend to have a more long-term investment in the area than the merchants, who pay the business license fee. He added that the fee is also flawed in that it requires self-reporting, while the property taxes will be collected by Alameda County.

The district currently generates about $300,000 in revenue each year, but the association projects a generated revenue of about $1.2 million during the first year of implementing the change. About 70 percent of the association's budget will go toward Downtown environmental enhancements, according to the proposal.

Currently, the Downtown business district is the only business-based district in the city, while other districts, such as those for the Telegraph Avenue area and the North Shattuck Avenue area, have been property-based since their establishments.

Roland Peterson, executive director of the Telegraph Business Improvement District, said property-based districts have more unanimous agreements than business-based ones, as merchants tend to differ in opinions and goals. He added that property-based districts also have larger budgets to sponsor programs, such as beautification projects.

The Telegraph district estimates an allocation of $351,857, and the North Shattuck district projects a collection of $166,466 in revenue in the coming year - both of which are significantly lower than the estimated funds of their Downtown counterpart, which encompasses a larger area of 24 blocks and also has a higher population density that demands more services, Caner said.

Michael Caplan, the city's economic development manager, said having a property-based district does not inherently increase revenue, but that for the Downtown district, it will because of the broad range of entities that will have to contribute.

In quadrupling its revenue, the district also increases its potential to improve the area by carrying out its Strategic Action Plan for the Downtown, Caner said.

"The goal is not to form a property (business improvement district)," he said. "But the goal is to create a more prosperous and cleaner Downtown, and the property BID is the mechanism to achieve that."

Karinina Cruz covers business. Contact her at [email protected]

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