What is a CBD?

GENERAL QUESTIONS AND ANSWERS REGARDING THE SAN FRANCISCO COMMUNITY BENEFIT DISTRICT ORDINANCE– ADOPTED 2004

Prepared by Marco Li Mandri, New City America, Inc.

The San Francisco Community Benefit District Ordinance of 2004 was adopted unanimously by the San Francisco Board of Supervisors in February and signed into law by Mayor Gavin Newsom in March 2004. Since that time, many CBDs have been established and efforts to establish new CBDs have grown all over the City. This paper represents a brief outline on what services can be funded by the new San Francisco CBD ordinance.

The following represents general questions and answers that potential applicant groups may have regarding the formation of a new Community Benefit District, (CBD), in the City of San Francisco.

What is a San Francisco Community Benefit District (CBD)?
In brief, the CBD is a local enabling ordinance that allows for the establishment of a new special benefit district. This “special benefit” district functions to create a stable revenue source to fund these special benefit services, that is established by a mail balloting of affected property owners culminating in the adoption of an ordinance by the Board of Supervisors.

In 2004, the Board of Supervisors amended the statewide Property Business Improvement District (PBID)legislation (Section 36600 of the Streets and Highway Code) by adopting Article 15, the Business Improvement District Procedures of the San Francisco Business and Tax Regulations Code. The amendment lengthened the term that the district could be in place, allowed for mixed-use assessments and provided a more reasonable weighted petition threshold which would trigger the assessment balloting procedure.

In order to establish the district, the Board of Supervisors must hold a public hearing and mail out assessment ballots in order to gauge the level of support of the weighted property owners in the district. Article XIII, Section D of the California State Constitution, governs the procedures for public hearing notification.

Similar districts are sometimes called Property Business Improvement Districts, Business Improvement Districts, Maintenance Districts or Special Assessment Districts. In San Francisco, the new enabling ordinance known as the Community Benefit District (CBD), ordinance of 2004 has been adopted to provide local enabling legislation for motivated business district and neighborhood stakeholders.

Why would anyone want to pay more money, isn’t the City supposed to be providing these services?

Cities in the U.S. tax their citizens through a number of means, (property taxes, sales taxes, hotel taxes, enterprise taxes, special revenues), and allocate those revenues to deliver general benefit services. These services are evolving historically but normally include police, fire, transportation, sewer, water, planning and zoning, streets, lighting, social and cultural affairs, environmental issues, trash and refuse, housing, etc. These services do not and cannot respond to the special needs of a given neighborhood or business district.

Those services can be simplified by understanding that “general benefit” services are normally delivered “curb to curb”, while “special benefits” are funded through non-public sources and deliver services “curb to property line”. Since people normally don’t walk down the middle of a street, what they experience in the public rights of way are to be found in the “curb to property line” zone. It is their experience in this zone that shapes their images, positive or negative, of a specific district or neighborhood.

To respond to those special needs, including sidewalk sweeping, steam cleaning, rapid removal of bulky items and graffiti, responding to illegal encampments, additional security, installation of order, states and localities have adopted special enabling legislation which allows motivated property owners to pay assessments to fund special benefit services. These special benefit assessments are probably the most efficient and effective funds to be paid since they must, by law, stay in the district and are managed by a locally based non-profit corporations comprised of those being assessed.

At a time of huge local, state and national budget deficits, it is expected that general services will, in fact, be reduced. These assessments can provide the services each and every business district and neighborhood wants, but will not be funded by the City.

What “special benefits” can a San Francisco CBD fund?

The special services to be funded are spelled out in the enabling ordinance or legislation. They can only legally include those services “which confer a benefit to real property owner” over and above what a City will normally provide through the general fund. Such special benefit services may include:

  • Cleaning of the public rights-of-way, sidewalks and gutter (general vs. special benefit);
  • Steam cleaning of the sidewalks of the district;
  • Additional removal of trash and bulky material;
  • Security services over and above the services of the local police force;
  • Installation of security cameras;
  • Parking services or transportation related services;
  • Economic development;
  • Special lighting;
  • Business attraction and retention and structuring a proper commercial mix;
  • Planning, zoning and land use issues;
  • Graffiti removal;
  • Administration and advocacy on behalf of business districts or neighborhoods;
  • Beautification and decorations;
  • Tree maintenance, planting, watering, etc;
  • Marketing and promotion (in business districts only);
  • Special community or neighborhood fairs, festivals or events;
  • Public space development and management;

Can the City replace its general benefit services in that district once the special benefits district has been formed?
By law, (Article XIII(d) of the state constitution), property assessments can only fund special, not general benefits. General benefits are those allocated to all parcels in the City and funded out of public or general fund revenues. Cities throughout the state normally adopt “baseline services agreements”, that require the City not to withdraw services once the special benefits district has been formed.

Experience has shown that once the assessment district management corporation has been formed, the private property owners in the district can normally leverage a greater amount of general benefit City services than before the establishment of the district. This is due to the fact that those property owners are now organized and can request things such as additional trees, trash cans, lighting, sidewalk repairs, and the CBD assessment revenues can maintain these additional capital improvements.

What allows the CBD to be formed and how is it done?
The district is normally initiated by a group of motivated property owners within a given community or district. Experience tells us that a core of property owners representing at least 10 – 15% of the potential assessment weight of the district, is necessary to initiate the investigation. This group will then approach the Mayor’s Office of Economic and Workforce Development to get information related to formation and the function of the special benefit services district.

A CBD Steering Committee will be formed among various interested parties, including the “weighted property owners” of the potential district. The CBD Steering Committee will meet and determine initial study boundaries and then conduct a study analyzing the level of support for formation of a CBD/Special Benefits district in the target area.

Assuming that at least 20 – 25% of the weighted property owners express support for the concept of the district, the CBD Steering Committee will then enter into the formation stage of the CBD. The formation stage includes the following:

The Steering Committee is expanded to include all interested parties, with particular emphasis on the weighted property owners. State law mandates that property assessment districts can only be formed by an assessment ballot proceeding supported by the majority of weighted property owners within a given district. The weight of a property owner is not determined by the assessed valuation of the property, but rather by the amount that property owner will contribute to the overall budget of the district. There are times when a few major property owners represent a significant amount of weight in the district. Early knowledge of their support or opposition to the district’s formation is critical in the successful formation of the district.

The Steering Committee endorses a CBD plan for the area. The plan outlines the special benefit services to be funded, the term of the district, the boundaries, the assessment methodology which identifies for formula for determining the costs to each property owner, benefit zones if any, special provisions for discounted assessments, as well as the management structure of the district;

Once the CBD plan has been approved by consensus of the Steering Committee, the plan is submitted to the City Attorney’s office for review and an Assessment Engineer certifies that the plan is compliant with the conditions of Article XIII(d) of the state constitution. The proposed assessments must be proportional to the benefits to be provided and they must “confer a special benefit to each parcel in the district”. Once the Management District Plan and Engineer’s report has been approved by the City Attorney’s office, a petition drive is circulated which demonstrates support by a minimum of 30% of the property owners, by weight. For example, if the annual first year budget is $150,000 for a CBD, petitions endorsing the CBD must be signed by $45,000 worth of assessments in the proposed district. Once the 30% weighted threshold has been reach, the petitions are then submitted to the Mayor’s Office of Economic and Workforce Development for processing;

The Mayor’s Office of Economic and Workforce Development dockets a “Resolution of Intention” for consideration by the Board of Supervisors. According to the State Constitution, property owners must be allowed to vote on the formation of the district through an “assessment ballot proceeding”/public hearing process. By adopting the Resolution of Intention, the Board is instructing the City Clerk to mail out the ballots to every affected property owner. The property owners have between 45-60 days in which to return the mail ballots. The mail ballots must be returned by the conclusion of the public hearing;

At the conclusion of public testimony at the public hearing, the Elections Department will then count the returned ballots and separate those in support and those in opposition. If the weighted returned ballots of support exceed those returned in opposition, the Board of Supervisors can then adopt an ordinance that levies the assessments on the benefiting parcels. The City then informs the County to levy the assessments on the next cycle of property tax bills consistent with the Management District Plan and Engineer’s report.

The assessments will then appear as a line item on the property tax bills and will be separated and sent to MOEWD for processing. Once an account has been established and a contract is in place with the designated or new non-profit management corporation, the CBD assessments will be transferred to the non-profit for management of the delivery of special benefit services to the CBD.

How long does this process take?

The process can take as little as 6 months or as long as 2 – 3 years. What is most important is that the affected community understands the proposal and the boundaries are set around a weighted majority of property owners who desire the services to be funded by the district.

Can the district be formed any time during the year?

Yes, however it is best to coordinate the formation process so the public hearing is completed by the end of July each year. This is suggested so there is not such a long delay in approving the district and receiving the revenues from the first property tax bills in December. The MOEWD is currently working on a plan to allow new CBD formed out of cycle to approach a local financial institution to provide for a line of credit. This line of credit, secured by the CBD assessments, will allow the district to begin services prior to the tax collection cycle.

How are the CBD assessments collected?

As provided by local ordinance, the CBD assessments will appear as a separate line item on the annual property tax bills prepared by the County of San Francisco. Property tax bills are distributed in the Fall and payment is expected by lump sum or in two installments. The County of San Francisco shall distribute the assessments collected from the CBD, to the City of San Francisco’s MOEWD who will in turn then forward them to the designated Management Corporation, pursuant to the authorization of the plan. Existing laws for enforcement and appeal of property taxes apply to the CBD assessments.

Is there a minimum amount that should be generated by the district?

Though there is no legal requirement for assessment revenue generation, practice tells us that a minimum of $150,000 in a business district or neighborhood should be generated in order to make a difference. The idea of the special benefits district is to have the special benefit services make an impact in the problem that the district or neighborhood may face. It is important that the district has adequate revenues to fund the special benefit services that gave rise to the concept of an enhanced services district in the first place.

Once established, must every parcel in the district pay?

Unless specifically mentioned in the plan, every single parcel owner must pay into the district. This includes local, county, state and federal properties. In addition, parcels owned by tax-exempt designated organizations may be exempt from paying property taxes but will not necessarily be exempted from the assessment district. The only way to be exempted is to demonstrate by “clear and convincing evidence” that no benefit will be received from the special benefit services funded by the district.

How long can the district last once established?

In San Francisco, the CBD ordinance will have a maximum life of 15 years. This length of time is to allow property owners to determine if they wish to fund long term capital improvement projects that will provide special benefit to their district. The district can be formed for any amount of time, not to exceed 15 years. Once the district term has been completed, the provisions for establishment are repeated in order to continue to fund special benefit services if that is the will of the benefiting property owners.

How could a district be disestablished if it is not functioning as envisioned?

Local ordinance provides for the disestablishment of the CBD pursuant to an annual review process. Each year that the district is in existence, there will be a 30-day period during which the property owners will have the opportunity to request disestablishment of the district. Within that 30 day period, if the owners of real property who pay 50% or more of the assessments levied submit a written petition, the CBD district disestablishment procedure may be initiated. The Board of Supervisors will hold a public hearing on disestablishing the CBD prior to actually doing so.

Due to its long term nature, this new ordinance allows for the growth of landscaping, its maintenance as well as economic development strategies related to revitalization that create a more permanent improvement to the area. If there is debt against the district, the district cannot be disestablished. All financial obligations in the form of bonds or loans for capital improvements, must be paid off before the district can be disestablished.

Who controls the funds once the CBD is established?

A non-profit corporation is usually designated or established once the CBD has been created. The non-profit corporation Board majority is normally comprised of the property owners paying into the district, but under local ordinance, “not less than 20% of voting members of the governing body of the district shall be such business owners, who do not own, or have an ownership interest in commercial property located within the district” (San Francisco Business and Tax Regulations Code, Article 15, Section 1511, (f). The corporation could be an existing corporation, but usually a new one is formed based upon the boundaries of the new district. It could be a mutual benefit or public benefit corporation.

The non-profit CBD management corporation would then enter into a contract with the City, office, to administer the district on behalf of the stakeholders. Bylaws are normally written to ensure that the property owners can be freely nominated and/or elected to the Board. By law, the assessments generated within the district must be allocated to fund special services within the district. The City cannot offload its current baseline level of services with the assessments since the district can only fund “special benefits”.

Once established, can the City increase the assessments?

By law, the only increases in the annual assessment methodology must be pre-determined and placed in the CBD plan for the district. The City cannot arbitrarily increase the assessments because these are not funds created by or controlled by the City. The assessment may be increased only through a pre-designated CPI factor, or changes in land use such as parking lots being converted to commercial buildings or condos.

How many districts similar to the CBD exist in the Bay Area and State?

Business community assessment districts in which additional fees tied to business licenses have been around for the last 40 years in the state. Property based assessment districts (PBIDs) are relatively new to the state, with statewide legislation adopted in 1994 enabling their establishment.

It is estimated that over 2,000 property based districts are functioning in the US and Canada. In the state of California, over 400 business licensed based and property assessment districts in business districts are functioning. Examples of cities that have multiple districts include:

San Francisco: As of December 2008, 8 CBDs a “TID” (Tourism Improvement District) and 2 PBIDs have been approved by their respective property or business owners. Currently 3 more districts are under investigation
New York City: 60 districts
Los Angeles: 35 districts with 4 more in some stage of formation
San Diego: 7 newer property-based districts
Oakland: 9 districts, with 1 more under formation
San Jose: 2 new property based districts, 6 business based districts
Berkeley: 3 property based districts, 2 business based districts,

New City America has formed over 20 districts in the Bay Area and as of December 2008, 53 districts nationwide. With the formation of the new San Francisco Tourism Improvement District, New City America has established the largest BID/TID/CBD ever formed in the United States.

This is clearly the national trend. These districts are providing the revenues to fill the gaps left by inadequate or un-funded neighborhood services. They are the wave of the future and they have finally come to the City of San Francisco. 

CBDs or TIDs that have been formed by New City America in the City of San Francisco:

  • Fisherman’s Wharf (July 2005)
  • Noe Valley/24th Street (August 2005)
  • North of Market/Tenderloin (August 2005)
  • Castro/Upper Market (August 2005)
  • Fillmore Jazz District (August 2006)
  • Central Market CBD (October 2006)
  • Portside CBD (Fisherman’s Wharf, 2nd stage)(December 2006)
  • Yerba Buena CBD (August 2008)
  • San Francisco Tourism Improvement District, Phase 1 (December 2008)

CBDs or BIDs that are under investigation and/or formation stage by New City America in the Bay Area:

  • Broadway Entertainment Corridor CBD
  • Rockridge CBD
  • West San Carlos CBID, San Jose
  • Downtown Tracy
  • West Berkeley BID
  • Management of Downtown Oakland CBD
  • Management of Lake Merritt/Uptown CBD

What is a PBID?

GENERAL QUESTIONS AND ANSWERS REGARDING THE STATE OF CALIFORNIA PROPERTY BUSINESS IMPROVEMENT DISTRICT LEGISLATION

Prepared by Marco Li Mandri, New City America, Inc.

The California Property Business Improvement District Legislation that was adopted in 1994, and has been amended twice since its passage, is part of the California Streets and Highway Code, Section 36600. Since its adoption, PBIDs have been embraced as critical tools to expedite revitalization of commercial areas and have been successfully adopted throughout the State of California. This paper represents a brief outline on what services can be funded by, the formation process and limits to the State of California PBID law.

The following represents general questions and answers that potential applicant groups may have regarding the formation or renewal of a Property Business Improvement District, (PBID), in the City of State of California…..

What is a State of California Property Business Improvement District?

In brief, the PBID is the state enabling legislation that allows for the creation of a specialbenefits district. Special benefit districts are defined in Article XIII (d) of the state constitution and are considered to be “property assessment districts”. The district functions to create a stable revenue source to fund special benefits, managed by a non-profit corporation of stakeholders, consistent with a “Management District Plan”, that is required by the legislation. Once there is a successful weighted supportive vote of the benefiting property owners during a public hearing process, the balloting is followed by the adoption of an ordinance by the local government. The ordinance provides for the annual levy of assessments on parcels, to fund the special benefits desired by benefiting property owners.

In order to establish the district, the local entity (City Council, Board of Supervisors), must hold a public hearing and distribute mail ballots in order to gauge the level of support of the weighted property owners in the district. Article XIII, Section D of the California State Constitution, governs the procedures for public hearing notification.

Similar districts are sometimes called Business Improvement Districts, Maintenance Districts, Community Benefit District, or Special Assessment Districts. In State of California, the PBID can be enacted in any city, whether general law or charter. However many cities, including San Diego, Los Angeles, San Francisco, Oakland, Berkeley and Alameda, have adopted their own enabling legislation based upon their Charter City powers.

The concept is to coordinate district responses to problems in the public rights of way, managed by a community based non-profit management corporation that is funded by the assessment district revenues.

Why would anyone want to pay more money, isn’t the City supposed to be providing these services?

Cities in the U.S. tax their citizens through a number of means, (property taxes, sales taxes, hotel taxes, enterprise taxes, special revenues), and allocate them to deliver general benefit services. These services are evolving historically but normally include police, fire, transportation, sewer, water, planning and zoning, streets, lighting, social and cultural affairs, environmental issues, trash and refuse, housing, etc. These services do not and cannot respond to the special needs of a given Downtown or business district.

To respond to those special needs, including sidewalk sweeping, steam cleaning, rapid removal of bulky items and graffiti, responding to illegal encampments, additional security, installation of order, states and localities have adopted special enabling legislation which allows motivated property owners to pay assessments to fund special benefit services. Thesespecial benefit assessments are probably the most efficient and effective funds to be paid since they must stay in the district, by law, and are managed by a locally based non-profit corporation made up of those being assessed.

At a time of huge local, state and national budget deficits, it is expected that general services will, in fact, be reduced. These assessments can provide the services each and every business district and Downtown stakeholder wants, but will not be funded by the City.

What “special benefits” can the district fund?

The special services to be funded are spelled out in the enabling Legislation. They can only legally include those services over and above what a City will normally provide through the general fund. Such special benefit services may include:

  • Cleaning of the public rights of way, sidewalks and gutter (general vs. special benefit);
  • Steam cleaning of the sidewalks of the district;
  • Removal of trash and bulky material;
  • Security services over and above the services of the local police force;
  • Parking services or transportation related services;
  • Economic development;
  • Special lighting;
  • Business attraction and retention and structuring a proper commercial mix;
  • Planning, zoning and land use issues;
  • Graffiti removal;
  • Advocacy;
  • Administration and advocacy on behalf of business districts or neighborhoods
  • Beautification and decorations;
  • Tree maintenance, planting, watering, etc;
  • Marketing and promotion (in business districts only);
  • Special community or neighborhood fairs, festivals or events;

Can the City replace its general benefit services in that district once the special benefits district is formed?

By law, (Article XIII(d) of the state constitution), property assessment districts can only fund special, not general benefits. General benefits are those allocated to all parcels in the City and funded out of public or general fund revenues. Cities throughout the state normally adopt “baseline services agreements”, that require the City not to withdraw services once the special benefits district has been formed.

Experience has shown that once the assessment district has been formed, the private property owners in the district can normally leverage a greater amount of general benefit City services than before the establishment of the district. This is due to the fact that those property owners are now organized and can request things such as trees and the PBID assessment revenues can maintain additional trash cans, with the understanding that these capital improvements are funded by the City.

What allows the district to be formed and how is it done?

The district is normally initiated by a group of motivated property owners within a given community or district. Experience tells us that a core of property owners representing at least 10 – 15% of the potential assessment weight of the district, is necessary to initiate the investigation. This group will then approach the relevant City department or office to get information related to formation and the function of the special benefit services district or PBID.

A PBID Steering Committee will be formed among various interested parties, including the “weighted property owners” of the potential district. The PBID Steering Committee will meet and determine initial study boundaries and then conduct a study analyzing the level of support for formation of a PBID/Special Benefits district in the target area.

Experience has demonstrated that if at least 20 – 25% of the weighted property owners express support for the concept of the PBID, the Steering Committee will then enter into the formation stage of the PBID. The formation stage includes the following:

The Steering Committee is expanded to include all interested parties, with particular emphasis on the supportive, weighted property owners. State law mandates that property assessment districts can only be formed by an assessment ballot proceeding supported by the majority of weighted property owners within a given district. The weight of a property owner is not determined by the assessed valuation of the property, but rather by the amount that property owner will contribute to the overall budget of the district. There are times when a few major property owners represent a significant amount of weight in the district. Early knowledge of their support or opposition to the district’s formation is critical in the successful formation of the district.

The Steering Committee endorses a PBID Management District Plan for the area. The plan outlines the special benefit services to be funded, the term of the district, the boundaries, the assessment methodology which identifies for formula for determining the costs to each property owner, benefit zones if any, special provisions for discounted assessments, as well as the management structure of the district;

Once the PBID Management District Plan has been approved by consensus of the Steering Committee, a petition is circulated which demonstrates support of a minimum of 50% of the property owners, by weight. For example, if the annual first year budget is $150,000 for a PBID, petitions endorsing the PBID must be signed by $75,000 worth of assessments in the proposed district. Once the 50% weighted threshold has been reach, the petitions are then submitted to the appropriate City Department for processing.

The appropriate City office will then docket a “Resolution of Intent” for consideration by the local governing body. According to the State Constitution, property owners must be allowed to vote on the formation of the district through an “assessment ballot proceeding”/public hearing process. By adopting the Resolution, the Board is instructing the City or County to mail out the ballots to every affected property owner. The property owners have between 45-60 days in which to return the mail ballots. The mail ballots must be returned by the conclusion of the public hearing;

At the conclusion of public testimony at the public hearing, the Elections Department will then count the returned ballots and separate those in support and those in opposition. If the weighted returned ballots in support exceed those returned in opposition, the local governing body can then adopt an ordinance that levies the assessments on the benefiting parcels. The City then informs the County to levy the assessments on the parcels, as per the Management District plan, for the upcoming cycle of property tax bills.

The assessments will appear as a line item on the County property tax bills and will be separated and sent to City for processing. Once an account has been established and a contract is in place with the designated or new non-profit management corporation, the PBID assessments will be transferred from the City to the non-profit organization for management of the delivery of special benefit services to the PBID.

How long does this process take?

The process can take as little as 6 months or as long as 2 – 3 years. What is most important is that the affected community understands the proposal and the boundaries are set around a weighted majority who desire the services to be funded by the district.

Can the district be formed any time during the year?

Yes, however it is best to coordinate the formation process so the public hearing is completed by the end of July each year. This is suggested so there is not such a long delay in approving the district and receiving the revenues from the first property tax bills in December. The sponsoring organization may also work with the local governing body to allow the new PBID Management Corporation, even though the PBID is formed out of cycle, to approach a local financial institution to provide for a line of credit. This line of credit, secured by the PBID assessments, will allow the district to begin services prior to the tax collection cycle.

How are the PBID assessments collected?

As provided by the Legislation, the PBID assessments will appear as a separate line item on the annual property tax bills prepared by the County. Most property tax bills are distributed in the Fall and payment is expected by lump sum or in two installments. The County normally distributes the assessments collected from the PBID, to the City who will in turn then forward them to the designated Management Corporation, pursuant to the authorization of the plan. Existing laws for enforcement and appeal of property taxes apply to the PBID assessments.

Is there a minimum amount that should be generated by the district?

Though there is no legal requirement for assessment revenue generation, practice tells us that a minimum of $150,000 in a business district and $75,000 in a neighborhood should be generated in order to make an impact. The idea of the district is to have the special services make an impact on the problems that the district may face. It is important that the district has adequate revenues to fund the special benefit services that gave rise to the concept of an enhanced services district in the first place.

Once established, must every parcel in the district pay?

Unless specifically mentioned in the plan, every single parcel owner must pay into the district. This includes local, county, state and federal properties. In addition, parcels owned by tax-exempt designated organizations may be exempt from paying property taxes but will not necessarily be exempted from the assessment district. The only way to be exempted is to demonstrate by clear and convincing evidence, that no benefit will be received from the special benefit services funded by the district. The City, as a property owner, may sign petitions, vote in favor and pay into the respective PBID.

How long can the district last once established?

In State of California, the PBID Legislation allows for a maximum life of 5 years. Upon renewal, a district may be established for a maximum of 10 years. The district can be formed for any amount of time, not to exceed the maximum term. Once the district is completed, the provisions for establishment are repeated in order to continue to fund special benefit services.

How could a district be disestablished if it is not functioning as envisioned?

Legislation provides for the disestablishment of the PBID pursuant to an annual review process. Each year that the district is in existence, there will be a 30-day period during which the property owners will have the opportunity to request disestablishment of the district. Within that 30 day period, if the owners of real property who pay 50% or more of the assessments levied submit a written petition, the PBID district disestablishment procedure may be initiated. The local governing body will hold a public hearing on disestablishing the PBID prior to actually doing so.

If there is debt against the district, the district cannot be disestablished. However, due to the short term nature of PBID, they rarely if ever incur long term debts or obligations.

Who controls the funds once the district is established?

A non-profit corporation or “owners association” is usually designated or established once the district has been created. The non-profit corporation Board majority is normally comprised of the property owners paying into the district. The corporation could be an existing corporation, but usually a new one is formed based upon the boundaries of the new district. It could be a mutual benefit or public benefit corporation.

The non-profit PBID management corporation would then enter into a contract with the City, office, to administer the district on behalf of the stakeholders. Bylaws are normally written to ensure that the property owners can be freely nominated and/or elected to the Board. By law, the assessments generated within the district must be allocated to fund special services within the district. The City cannot offload its current baseline level of services with the assessments since the district can only fund “special benefits”.

Once established, can the City increase the assessments?

By law, the only increases in the annual assessment methodology must be pre-determined and placed in the PBID Management District Plan for the district. The City cannot arbitrarily increase the assessments because these are not funds created by or controlled by the City. The assessment may be increased only through a pre-designated CPI factor, or changes in land use such as parking lots being converted to commercial buildings or condos.

How many districts similar to the PBID exist in the Bay Area and State?

Business community assessment districts in which additional fees tied to business licenses have been around for the last 35 years in the state. Property based districts are relatively new to the state, with statewide legislation adopted in 1994 enabling their establishment.

It is estimated that over 2,000 property based districts are functioning in the US and Canada. In the state of California, over 400 business licensed based and property assessment districts in business districts are functioning. Examples of cities that have multiple districts include:

Los Angeles: 33 districts with 4 more in some stage of formation
San Diego: 6 newer property-based districts, 18 merchant based BIDs;
Oakland: 6 districts, with 2 more under formation
Berkeley: 3 districts
New York City: 55 districts
San Francisco: As of August 2005, 4 “Community Benefit Districts” and 2 PBIDs have been approved by their respective property owners groups. Currently 5 more districts are under investigation with 2 in formation stages.

This is clearly the national trend. These districts are providing the revenues to fill the gaps left by inadequate or un-funded Downtown/business district services.

Districts that have been recently formed by New City America in the City of State of California include:

  • Fisherman’s Wharf/San Francisco (July 2005)
  • Noe Valley – 24th Street/San Francisco (August 2005)
  • North of Market – /Tenderloin/San Francisco (August 2005)
  • Castro – Upper Market/San Francisco (August 2005)
  • Laurel District/Oakland, (July 2005)

Districts that are under investigation and/or formation stage by New City America include:

  • Fillmore Jazz District/San Francisco
  • Japan Town/San Francisco
  • Market Street/San Francisco
  • Portside – Fisherman’s Wharf/San /Francisco
  • Koreatown/Oakland
  • East Liberty, Pittsburgh Pennsylvania
  • Downtown Santa Ana
  • Downtown El Cajon

What is a BID?

What is a TID?

Updated June 2013

New City America has rapidly become a national leader in the consulting to and formation of these new financial mechanisms established to stabilize the marketing of local and regional destination management corporations.

Known as “TIDs”, these new Tourism Improvement Districts are the alternative to the dwindling resources allocated by City governments to their struggling Visitors’ Bureaus. TIDs are assessment districts established to fund new and improved marketing programs to bring more “heads on beds” to local areas in an increasingly competitive visitor industry. Marco Li Mandri, President of New City America, led the panel of experts at the 2010 “Destination Management Association International” conference held in Atlanta Georgia.

Currently, New City America has formed, or is under contract to form the following TIDs:

The San Francisco Tourism Improvement District, adopted December 2008. The SFTID generated approximately $27 million dollars during its first year, making it the largest TID or BID ever formed in North America. New City America was the consultant company that worked with the San Francisco Convention and Visitor’s Bureau to lead this effort; (See Client Satisfaction Section of the website for the letter of recommendation for this TID).

New City America was hired by the Baltimore Convention and Visitors Association to form a new TID for Baltimore. Based upon this effort, the TID effort was postponed when the City of Baltimore increased the hotel tax with a commitment to return 60% to the Convention Bureau. This was done due to the work of New City America working with Tom Noonan, CEO of Visit Baltimore. ( (See Client Satisfaction Section of the website for the letter of recommendation for this TID)).

New City America formed a two-city TID in Anaheim and Garden Grove in late 2010. These two new TIDs for the cities of Anaheim and Garden Grove, will funnel their estimated 9 million dollars in new revenue to the Anaheim Visitor’s Bureau. The current contribution from the City of Anaheim to the Visitors bureau will be redirected to improving and expanding the Anaheim Convention Center. (See Client Satisfaction Section of the website for the letter of recommendation for this TID).

As part of its review for the needs for economic development in Coronado, a new Coronado TID Conceptual plan was adopted by the Coronado City Council after years of preventing the visitor industry from promoting itself. After New City America’s report to the City Council in early 2011, the 4 major hotels on the island established a new Tourism Improvement District generating almost 1 million dollars per year to bring new visitors to the island. (See Client Satisfaction Section of the website for the letter of recommendation for this TID)

New City America was hired by the Seattle Convention and Visitors Bureau in 2011 to form a new TID for Downtown hotels. Working with the Convention and Visitors Bureau Board of Directors and CEO Tom Norwalk, NCA created the new Seattle TID in late 2011. The new TID is generating close to 2 million dollars in leisure related marketing funds for the Bureau today; (See Client Satisfaction Section of the website for the letter of recommendation for this TID)

Mayor Cory Booker’s office in Newark hired New City America in early 2012 to work with the Greater Newark Convention and Visitors Bureau to seek a legislative way to create a new TID for the Greater Newark area. After reviewing current statewide legislation, NCA was able to create a way in which hotels in Newark could vote to establish this new funding mechanism and generate 1 ½ million dollars per year to promote Newark. (See Client Satisfaction Section of the website for the letter of recommendation for this TID).

Other cities seeking information on TIDs, that New City America has advised on their formation include the following:

  • The Greater Phoenix Convention and Visitors Bureau; (2011 -12)
  • The Chicago Convention and Visitors Bureau; (2012)
  • The Dallas/Fort Worth Convention and Visitors Bureau; (2012)
  • The St. Louis Convention and Visitors Bureau; (2011)
  • The Milwaukee Convention and Visitors Bureau’; (2010)