Controversial Downtown Long Beach Property Based Improvement District Approved

61 Percent Of Ballots Cast Went Against Approval, But Renewal Passed Due To ‘Weighted Vote’

By Tiffany Rider - Senior Writer

August 14, 2012 – There was no “one man one vote” in play when downtown residential and commercial property owners cast their ballots on the continuation of the Downtown Property Based Improvement District (PBID) earlier this month. If there had been, the vote would have been 39 percent in favor and 61 percent opposed – no PBID.

But this wasn’t an ordinary election. In this case, the size of your property did matter – and it was all legal, according to the California Constitution.

Because ballots were “weighted” based on the size of the property and the assessment paid for that property, the official vote, per the law, was 77.5 percent in support and 22.5 in opposition.

Based on a per property break down provided by the city clerk’s office, there appeared to have been about 3,000 possible votes that could have been cast – approximately 1,900 of which were categorized as residential property owners. However, only 1,104 votes were cast: 429 for the PBID; 675 against it.

The residential property owners in opposition – and quite a few owners of larger commercial properties who also voted no (based on a review of the votes cast) – never had a chance. Even if all 1,900 owners of downtown condominiums and townhomes voted against the PBID, they would have lost due to the weighted vote.

The City of Long Beach alone controlled roughly 17 percent of the favorable vote. The CityPlace shopping center owner, another supporter, controlled a huge chunk. Support from the property owners of Molina Center, Landmark Square, Shoreline Square, Renaissance Hotel, Courtyard by Marriott, and the Press Telegram Lofts, along with property owned by Lyon Real Estate and the Robert Gumbiner Foundation, pretty much gave the PBID what it needed to pass.

The vote, which was tallied publicly during the August 7 meeting of the Long Beach City Council, allowed the PBID to continue for another 10-year period, but this time residential property owners will also pay an assessment.

Following the ballot count, the city council voted 7-0 in favor of the reestablishment of the Downtown PBID. Vice Mayor Robert Garcia and 5th District Councilmember Gerrie Schipske recused themselves as property owners in the downtown area.

The PBID, first established in 1998, was renewed in 2003 for a 10-year term and was up for renewal this year. The district is established under the guidance of PBID law in the California Constitution, allowing property owners to assess themselves and designate a nonprofit agency to use the assessment funds to pay for services. The PBID pays for both environmental and economic development services provided through the Downtown Long Beach Associates (DLBA).

According to a statement from the DLBA, “The Downtown Long Beach PBID has been in place since 1998, and has diligently provided resources to enhance the community. The PBID has helped ensure Downtown’s safe, clean, energetic and evolving Downtown, and through this renewal the enhanced programs and services Downtown has come to expect will continue.”

Property owners within the existing PBID will continue to see the district assessment on their property tax documents, and those added to the renewed PBID will see the additional assessment on their property taxes beginning January 1, 2013. The assessments charged are based on the square footage of the property, the linear frontage of the property and if the property is located within the standard zone or premium zone of the district. According to the DLBA budget, approximately $2.25 million will be raised from the new PBID assessment in the first year. The assessments increase annually based on the consumer price index. “I appreciate the conversations that have taken place over the last several months between the DLBA, the businesses, residents and city staff,” 2nd District Councilmember Suja Lowenthal said at the August 7 meeting. “I think we’ve learned a lot more than we ever thought we would about PBID laws and their place in the California Constitution.

“We’ve also learned how passionate our residents and businesses are about the downtown; what’s right about it, what certainly needs to improve. I’ve spoken to many of you who were in the audience earlier tonight and have returned, on different occasions, and it’s clear that you love this community. I’d like to thank the DLBA for your engagement in this process and your efforts to discuss the PBID proposal with the community. I’m a firm believer in the value of your role for businesses and residents in the downtown. It’s an example of when businesses got together at one point in order to assess themselves to fill in the gaps so that we too can all live in a community where quality of life is back to where it should be.”

In response to the PBID renewal, Sandra Rendel, residential property owner and spokesperson for the anti-PBID group Downtown Homeowners Unite, expressed the following in a newsletter dated August 8:

“Our fight has been all about representation. The homeowners did not have an opportunity to have real input or vote at any stage of this process. The DLBA has led a cynical and hollow effort to include the homeowners.

“A year ago at the first meeting of the Steering Committee, the majority of attendees were clueless about the process and the consultant was condescending about the role of the homeowners (we were obviously just another source of revenue). I left that meeting determined to fight this organization and what it stands for. It is the most undemocratic process I have ever encountered.

“Bear in mind that this renewal effort was paid for by tax dollars. In other words, the DLBA used our money to campaign and organize this renewal effort. I cringed last night when the Council characterized this as an effort by the property owners. It is not a campaign led by property owners – it is a campaign funded and led by the DLBA with the help of expensive consultants from Colorado.

“I am proud of our efforts and proud of the support shown by all of you. In Long Beach we stood up and demanded to be heard. We may not have prevailed against the vested interests of the City Council and the DLBA but we did not just turn and walk away. . . .Thanks to all of you.”

For more information on the Downtown PBID, visit http://downtownlongbeach.org.

(Business Journal Publisher George Economides contributed to this article.)