Downtown Association will push for PBID again this year
Morgan Hill City Council members agreed to keep the Morgan Hill Downtown Association afloat for at least another year by allocating $97,500 to the organization during their council meeting Wednesday night.
Though the council ultimately decided to grant the funding, which is the same amount the council allocated last year, they did so with a strong warning that the organization cannot rely on the city as their sole source of operating revenue.
“I’m supportive of the association, but I’m also fearful for next year. … The city and MHDA are in a partnership, but they (MHDA) gotta start accepting some responsibility. … Together is the way to do it,” City Councilman Steve Tate said. He indicated the council may not fund the association next year.
MHDA Executive Director Dan Craig said the organization tried to raise almost $200,000 to cover its expenses and expand their services by passing a Property Based Improvement District last fiscal year. The PBID would have assessed fees on property owners based on the lot size plus the square footage of their building, and the amount of store front along Monterey Road between Main Avenue and Dunne Avenue. However, the MHDA couldn’t get the support needed to create the new district by the June 1 deadline and needed city funding to keep the organization operating this year, Craig said.
Without the city’s help this year, Craig said the MHDA would become an all-volunteer organization. With the funding granted by the council, however, Craig said the organization will be able to make another effort at passing the PBID this year.
“We were unable to obtain enough support from property owners. We believe we can do it a second time around. It could be the last chance for the MHDA to form a PBID,” said Craig.
To help the MHDA create the PBID this year, the city also agreed to rollover the remaining $10,000 of a $40,000 loan it gave the MHDA last year to fund the effort.
Although the PBID effort failed in its first attempt, Craig said the MHDA plans to generate more support from local business and property owners in downtown to push the PBID through this year. The organization will rework the fee assessment of property owners, some of which would have ballooned to more than $4,500 a year. The assessment on some property owned by the city would have amounted to $23,000 annually.
Property owners signed petitions for just $41,648 or 21 percent. Along with $42,991 in petitions for city-owned property downtown, the total petitions still came up 8 percent short of the 51 percent needed to proceed.
Craig gave the council a myriad of reasons why the PBID failed. He said some property owners questioned whether funds collected would truly be returned to the district; while others were not pleased with their prior dealings with City Hall. He also said some property owners thought there were not enough visible, physical improvements downtown.
Craig also said the MHDA tried not place too much of a burden on the core property owners, so the committee expanded the boundaries of the assessment district, moving the north and south boundary to Central and Bisceglia streets, respectively, and the western boundary to Hale, but property and business owners in the expanded area never felt associated with downtown and had a difficulty seeing benefits they would derive from a PBID.
Over the course of the year, Craig said the steering committee plans to embark on a new approach to its PBID formation efforts, rework a more equitable assessment formula, and educate property owners about the benefits of a PBID.
He said there is definitely commitment in the MHDA and the association is optimistic about the PBID if the council would “give it another bite of the apple.”
All members of the city council stated their support for the MHDA, but they also stressed it is imperative that the organization come up with its own means of support.
Councilman Mark Grzan said he too is supportive of the association, but stressed, the city’s funding of the organization is a “significant amount of money during our tough economic times … I wish you guaranteed success.”
Mayor Dennis Kennedy also stated his support by saying, “You’re the heart and soul of downtown.” He thanked the group for their work and literally hundreds of hours they devoted in trying to form the PBID and wished them well in the “challenge ahead of them.”
Dan Ehrler, executive director of the Morgan Hill Chamber of Commerce, told the council the Chamber “unanimously supports the Morgan Hill Downtown Association’s request for continued funding. The Chamber firmly believes the MHDA can maintain a structure, momentum” to revive downtown. He said the viability and future of downtown depends on the MHDA and “we firmly believe an extension (of funds) would provide that.”
Several other MHDA members thanked the council for their support and underscoring the need for continued funding from the city during the meeting.
“I can’t emphasize enough how important funding is,” said MHDA member Leslie Miles of Weston Miles Architects, Inc.
The Morgan Hill Downtown Association was formally established about three years ago in an effort to revive the community’s downtown area. At a time when malls and retail stores are sprouting in the suburbs and outlying areas of cities, downtown areas across the nation are suffering.
In recent years, numerous cities and downtown associations have initiated a Property Based Improvement District as a way to have a long-term funding base for operations, marketing, maintenance and to carry out economic development activities to revive their areas. There are more than 1,000 PBIDs in downtown and business districts throughout the country. There are more than 70 PBIDs in California. Nearby areas with assessment districts are Mountain View, Los Gatos, San Jose, Palo Alto, Burlingame and Willow Glen. Gilroy is also considering trying to create a PBID.
Craig said he was relieved the city granted the funding and looks forward to continuing the associations mission to improve downtown.
“We need to build and nurture the partnership,” Craig said. “We understand the need for us to be self-sufficient. We’ll have to see how it plays out with the PBID. We appreciate the council’s willingness to understand and give us another shot at it.”
Rose Meily covers City Hall for the Morgan Hill Times. Reach her at 408-779-4106 or by e-mail at rm****@*************es.com
