Blair Cohn, executive director of the Bixby Knolls Business Improvement Association (BKBIA), is keeping his eye trained on what he refers to as a “flashing red light” in the distance – the 2021 sunset of an annual payment of $200,000 to the BKBIA from Long Beach’s former redevelopment agency (RDA). The organization oversees the business improvement district that encompasses the business corridors of Long Beach Boulevard and Atlantic Avenue in Bixby Knolls, and assesses an annual fee on businesses there to pay for marketing, events, security and other programs beyond those provided by the city. From these fees, the organization brings in about $180,000 each year.

In other words, when the RDA funds run out, more than half the organization’s funding will dry up. And for a lean operation staffed by just two full-time people and two part-timers, that spells trouble.

To get ahead of the issue, the Long Beach Economic Development Department paid for an independent study to assess the state of the district and provide strategic planning priorities, with a focus on future funding sources. That report, authored by Denver-based Progressive Urban Management Associations (PUMA), has been completed and was summarized in a meeting with BKBIA members on November 14.

Ahead of the meeting, PUMA President Brad Segal spoke to the Business Journal about the report’s findings. He noted that his organization specializes in working with business improvement districts, including more than 30 in California alone. Among their previous clients is the Downtown Long Beach Alliance.

Segal said he began working with the city and with Cohn over the summer, and that he and his team visited Bixby Knolls for several days in mid-September to meet with around 70 BKBIA stakeholders.

“There were five key findings. One is we do find that it’s a high functioning organization . . . and this is from the perspective of its stakeholders,” Segal said. “There is a high level of satisfaction in terms of what the organization does: its scope, its leadership, the level of engagement, the programming.”

The second conclusion from the meetings was that there is positive momentum within the district. “The market profile reveals a pretty diverse district in terms of racial diversity, age diversity and income diversity, which to us is really positive. It provides some real opportunities to enrich the district with a whole variety of businesses,” Segal said.

“Conclusion number three is there is general agreement on priorities. We didn’t see a lot of variance from the stakeholder groups,” Segal said. Priorities moving forward, per the stakeholders, are: that the BKBIA continue its regular programs and services, including business retention; improving the pedestrian environment on Atlantic Avenue, perhaps with traffic calming measures; and continuing and refining BKBIA events like First Fridays.

The study’s fourth conclusion was that additional funding and staffing resources for the BKBIA are needed. “It’s not only replacing the city funding that’s at risk, we think some additional funding might make sense too,” Segal said. “We’re looking at a target of about $600,000 that we think would be an ideal operating budget for them.”

One potential new revenue source is a nonprofit 501(c)(3) organization recently formed by the BKBIA to supplement its funding. Segal said that mature business improvement districts often create nonprofits to raise funds for capital improvements via grants and donations. He specified that this revenue stream would likely be unsuited to fund general operations.

PUMA studied a potentially significant change to the district that could generate additional funding: reconfiguring the fee structure of the district itself by overlaying an additional property-based improvement district (PBID) over either both Long Beach Boulevard and Atlantic Avenue, or just a portion of Atlantic Avenue. Currently, the BKBIA only assesses businesses.

Assessing property owners per square foot of property could be more lucrative, bringing in an annual revenue stream of $550,000 to $670,000, depending on the configuration, according to Segal.

“We’re anticipating a two-tier PBID with two rates,” Segal said, explaining that areas of the PBID with more funding to spare would be assessed at higher rates. “One thing we’re trying to do in all of this is to be very sensitive to the rent structures. We want to make sure we don’t create a district that puts undue burden on the real estate,” he noted, explaining that if fees are too high, the cost could impact business owners if it is passed down via rent increases.

Parking meters were examined as another potential revenue stream, but Segal said that option did not seem viable. “There were a couple of problems with it. One is there was plentiful on-street parking, so I am dubious that there is demand for on-street paid parking in Bixby Knolls,” he explained. The idea also did not sit well with residents worried about cars parking in front of their homes to access the business corridor, he noted.

The report’s fifth finding involves the city government. “We’re not letting the city off the hook in this report,” Segal said. “Future partnerships with the city are essential for the district.”

Without pursuing alternative funding sources to make up for the loss of RDA funds and to account for cost increases, Cohn worries for the district’s future. “It’s like dominos falling. We won’t really have the funds for part-time staff and the director job,” he said. “Programming will start to slow down. We won’t have the security patrols. . . . They may just be on an on-call basis.”

Outside of funding, Cohn has other challenges to contend with. “Long Beach Exchange makes me nervous, obviously,” he said, referring to a retail center located a couple of miles down Carson Street. “And what are the other challenges? I am worried about the state of retail as a whole. You and I could right now get on the computer and order everything for Christmas, Hanukkah, Valentine’s Day, anniversaries, birthdays, for everybody for the next year. That would be done in one hour and we’d never have to go anywhere,” he said.

Cohn continued, “We have to drive the point home that we are majority mom-and-pops. We have folks who have great services for you right here [who] have been in business a long time. There is no need to go anywhere else. But you have to participate.”