Morgan Hill City Council to consider proposal
Morgan Hill – Whether downtown property owners may be corralled into a new self-assessed tax district is in the hands of the Morgan Hill City Council.
The city, one of many downtown property owners, has to agree whether to participate in the tax self-assessment to the tune of $24,000 a year. If it doesn’t, the effort comes to a dead stop.
So why would Morgan Hill be willing to fork over more than $120,000 in a five-year period to participate in the business district?
To preen downtown’s shopping district, backers say, and also save the
Morgan Hill Downtown Association.
If established, the downtown tax district – a property based improvement bid (PBID) under state law – would allow Santa Clara County to collect additional property taxes from property owners downtown. Those funds would then be funneled back to a non-city
government assessment association, likely to be the Morgan Hill Downtown Association, that would be charged with spending the money locally on projects benefiting businesses.
Mayor Dennis Kennedy said the idea is to link downtown businesses together like stores in a centralized shopping center, thus empowering them to drive capital improvement projects aimed at giving downtown an economic boost.
“I think the PBID is a good thing,” he said. “Downtown is, in many ways, like a small shopping center. And in shopping centers, when there are issues related to parking, and programs to encourage new businesses to come in, there is an ‘assessment’ the center can charge (its shop keepers). The PBID is analogous to that.”
The Morgan Hill Community and Economic Development Committee is recommending a “yes” vote by the council on Wednesday.
The PBID could also be a self-funding mechanism.
The Downtown Association was formally launched in 2002 and has since received more than $300,000 in seed money from the city on the condition that the group find a way to be self-sufficient. Morgan Hill Downtown Association Executive Director Dan Craig said the PBID would accomplish just that.
“There will be an owners’ governing body that probably will be the Downtown Association,” he said. If contracted by the city to be the PBID’s governing body, the association would hold an election among property owners to choose a governing board to implement the activities of the PBID. “It’s going to be self-assessment by the property owners, for them,” Craig said. “They should have a say in how that’s spent.”
According to an executive summary of the PBID proposal, the pool of assessment dollars could go for things such as marketing campaigns and beautification projects in the downtown corridor. Craig mentioned news racks and street lights as examples.
The proposed district would resemble a rectangle whose edges would be Main Street, Butterfield Boulevard, Dunne Avenue and Del Monte Avenue – approximately 15 blocks surrounding Monterey Road.
If the council votes to sign the PBID petition, it could then authorize a public hearing for July 26 in which secret ballots distributed to all downtown property owners would be counted. A simple majority would be needed to launch the PBID into orbit.
The proposed tax assessment would be based on square footage. Lots and buildings in the “premium zone,” between Main Street, Del Monte Avenue, Dunne Avenue and Depot Street, would be assessed $0.0297 and $0.0593 – respectively – per square foot. Other lots and buildings would be assessed $0.0111 and $0.0223, respectively.
PBID proponents say it would raise $75,000 in its first year of operation for downtown capital improvement projects. “It’s not going for administrative or overhead” costs of the association, Craig said.
“Downtown there are multiple property owners, multiple interests,” he said. “You’ve got the tenants; you’ve got the property owners; you’ve got all the various agencies in that jurisdiction, the city, utilities, so getting the coordination to get this place to function like a centralized shopping center, which it needs to do … is very task intensive.”
This isn’t the first time the association has lobbied for PBID. In 2005, the association’s leadership tried and failed to achieve a minimum level of interest among property owners within the proposed district.
But this year, a petition of property owners who would be assessed shows there is enough interest among potential payers to generate 55 percent of the total assessment – minus the city’s $24,000. The council’s vote effectively decides the fate of the PBID.
Tony Burchyns covers Morgan Hill for The Times. Reach him at (408) 779-4106 or tb*******@mo*************.com.
