West Hollywood’s Economic Development Department is recommending the city abandon its efforts to organize a business improvement district on the south end of Santa Monica Boulevard.
In a report to the City Council, the department noted that the effort to establish a BID is now in its seventh year, and that typically such projects are completed in one to two years.
A business improvement district is a distinct area within which businesses are assessed a fee by the city, with the revenue from that fee being used to fund projects within the district such as street improvements, special events and marketing campaigns. BIDs are governed by boards of directors representing the local businesses who decide how the money raised by the assessment will be spent.
The city has spent $65,000 in an effort to organize the Santa Monica BID over the past eight years. It engaged Civitas, a Sacramento consulting firm, and for a brief period the West Hollywood Chamber of Commerce to convince local businesses to support the BID.
Under state law, a BID can only be established if businesses whose combined assessments equal at least 51 percent of the proposed BID budget sign on. Civitas hasn’t been able to get the percentage past 43.39 percent. It had proposed an annual budget for the BID of $380,000.
The city has two other BIDs: The Sunset Strip BID and the Design District BID, which covers businesses along parts of Melrose Avenue and Robertson and Beverly boulevards. The Sunset Strip BID markets businesses there with a variety of events such as the Sunset Strip Music Festival and the Craft Beer Market. The Design District BID markets its businesses with the annual DIEM design conference and block parties within the district.
The Economic Development Department recommends that the city help the group of local businesses leaders who have promoted the BID as they explore other options. It also suggested that the city renew its support for the BID process if there is any significant increase in support for it.
The proposed BID would have extended from near the intersection of Holloway Drive and Santa Monica Boulevard on the east to Doheny Drive and Santa Monica on the west. The proposed annual fees assessed to support the BID depend on the type of business. For example, a bank with less than $50 million in deposits would have been assessed $1,000, the same fee as a pharmacy with between $25 million and $40 million in sales.
The largest assessments would have been levied against nightclubs, bars and restaurants. A nightclub allowed to have 600 or more customer would have been assessed $12,000, a restaurant capable of serving 275 to 499 customers at a time with a full liquor license would have been assessed $9,000.
The area that the Santa Monica BID would have covered is popularly known as “Boystown” for the large number of nightclubs, bars, restaurants and shops that cater to gay customers. The effort to get support for a BID has been complicated, according to some local merchants, because of the intense competition among local bar owners there.
Also, the city already spends hundreds of thousands of dollars to promote gay-oriented events in the area, reducing the need for businesses to spend their own money to promote themselves as do those on Sunset Boulevard and in the Design District. Those events include the annual Go Go Boy Appreciation Day, and the LA Pride Parade and Festival, which costs the city approximately $900,000 a year. The city spent $80,000 to paint the crosswalks at the intersection of Santa Monica and San Vicente boulevards in the rainbow colors that are an emblem of gay liberation.
Councilmembers John D’Amico and John Duran also have gotten the city to underwrite events such as the Mayan Day of the Dead Festival and a Mardi Gras festival, both with poor turnouts, that were staged on Larrabee Street north of Santa Monica, an area surrounded by gay bars that had hoped to benefit from the increased traffic.