Chapter 2 of that law describes the process for establishment and renewal of a BID,2 and it’s remarkable how tentative, how conditional the process is. It’s well-known by this point that in order for a BID to be formed it’s necessary that property owners representing more than 50% of the assessed value be in favor.3 It’s necessary, but it by no means sufficient. Section 36625(a) very clearly leaves the question of formation up to the Council:
If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation…
The only mandatory requirement with respect to BID establishment in the whole Chapter is found in Section 36623(b), which says that if owners holding 50% or more of the assessed value are opposed to the BID, not only can it not be formed, but no further attempts can be made to form it for a year.
And the discretionary nature of the process is reflected in the City’s BID Policy and Implementation Guidelines as well. Therein it states:4
The City Council can proceed with the BID if the protest is less than 50%. However, BID proponents are cautioned that they should not expect a favorable vote from the City Council with a significant number of protests.
From the context it’s clear that the policy means that there is some threshold of protest less than 50% with respect to which the Council will not establish the proposed BID even though the Property and BID Act would allow them to do so.
Thus the question arises as to what this threshold is. Well, it turns out that an episode early last year involving the Los Feliz Village BID sheds some light on this question.5 The short answer is that business owners6 representing 16.95% of the assessed value protested, an unprecedented number,7 and yet City Council renewed the BID unanimously. Turn the page for a detailed recounting of the tragic details!
The renewal of the Los Feliz Village BID was scheduled for a Council vote on March 15, 2016.8 On March 3, 2016, Los Feliz Ledger publisher Allison B. Cohen published a letter in her paper arguing against BID renewal and urging the formation of a local chamber of commerce instead. That same day she published an editorial calling for protests against the BID and giving concrete information on how to submit them to Council:
On March 15th, the Los Angeles City Council will decide if the LFVBID should be renewed for another year. If you are a Los Feliz business owner and feel we deserve better than what we have and that we, collectively, can better make Los Feliz a destination for others to visit, shop and eat at our great restaurants, please take the time to read my “protest” against the city renewing the LFVBID and fill out your own city form recommending the LFVBID be disbanded.
Even though she began this campaign only 12 days before the Council voted, according to City Clerk Holly Wolcott’s official report to Council on the renewal, 49 protests were submitted.9 There are 294 businesses in the BID,10 so this represents (or 16.7%) of the participants. But of course, it’s not the raw number of participants that matters with BIDs, but the fraction of assessed value.11 However, in this case the numbers aren’t very different.12 According, again, to Holly Wolcott’s report, the businesses submitting protests account for 16.95% of the assessed valuation. And to give Holly Wolcott some credit, as much as it, for other reasons, pains me to do so, she told the Council clearly that while this result did not require them to vote against the BID, it also did not require them to vote for it:
The tabulation of the valid written protests received does not amount to a majority protest, as defined by Section 36525 of the Code. Therefore, the Ordinance authorizing the levying of the special assessments for the District’s 2016 operating year may be adopted by the City Council.
And these protests, at least the ones published by the City, aren’t just box-checking. They spell out reasons, some of them in great detail, why they’re opposed to the BID, e.g. lack of transparency, cronyism, wasting money, unresponsiveness to the concerns of constituents, and so on. But of course if the City Council started thinking those kinds of things were bad, they’d have to remove the beam from their own eyes before they did pretty much anything else. Which probably explains why they voted unanimously to renew the BID. So now we in the anti-BID community know that, despite the City’s fairly promising statement that “BID proponents are cautioned that they should not expect a favorable vote from the City Council with a significant number of protests,” it turns out that 17% is not significant.
Postscript: Subsequently, as reported by the Los Angeles Business Journal, David Ryu warned the BID that he was going to be watching them and that they had better clean up their act. This, of course, is yet another example of our City Council ignoring democratic processes13 in favor of the dictatorial control by individual Councilmembers over discretionary matters in their own districts. Obviously we need, and we have a right to, a political process that is responsive to our concerns in some kind of predictable and uniform manner rather than one which depends on the random whims of whichever hapless flack happens to be councilmember. But that’s not only the story of all politics in Los Angeles, it’s also a story for another day.
- It’s worth noting here that the City Clerk seems to be in the process of updating the policies found in CF 96-1972, as evinced by CF 15-0294. That file seems to be stalled out in committee, with no action since March of 2015, but it isn’t expired yet and it bears watching, especially for the sake of this mysterious document, which contains an extensive description of how the City can (will be able to?) force BIDs to cough up records for inspection. If that ever gets implemented, and maybe it’s implemented now, it’s really hard to figure out for some reason, it will conceivably be really useful in forcing BIDs to comply with CPRA without having to go to court, something which the City presently refuses to do for reasons of regulatory capture and general bloody-mindedness.
- Technically Chapter 2 only describes the process for establishment of a BID. The process for renewal is contained in Chapter 5 at Section 36660, but that section merely says that the process for renewal is the same as the process for establishment, so it’s OK to conflate the two processes as I’ve done here.
- This proviso is found in Section 36621.
- On pages 6 and 7 of the document.
- Which is of more than passing interest to anyone seeking to discover techniques by which BID establishment might be prevented and, if that proves impossible, means by which BIDs may be disestablished. (In full accordance with state and municipal law and with the utmost respect for democratic processes and the rule of law, of course. That’s really the only way to do things, friends. I wish the BIDs themselves could remember this simple rule.)
- The LFVBID is a merchant-based BID rather than a property-based BID. For some purposes this makes a great deal of difference, but not for this purpose.
- Before the Venice BID, of course, which may yet turn out to have changed everything.
- The Council file is CF 13-1724. I also put copies of the protests on Archive.Org to make it easier to browse and download them.
- For whatever reason there are only about 30 on the Council File page, also available on Archive.Org.
- Recall that, unlike the majority of LA BIDs, the LFVBID is merchant-based rather than property based.
- This confuses everyone about BID elections, probably because it’s so fundamentally antidemocratic. In this case, e.g., in her initial call for protests, Allison Cohen said that since there were 294 businesses, 149 protests would suffice to automatically disestablish the BID. Of course, without detailed information regarding the proportion of the assessed value that each business is worth it’s impossible to make a definitive statement about the raw number of protests necessary for automatic disestablishment. Similar errors plagued reporting on the Venice Beach BID last year.
- Which probably indicates that most of the businesses in the BID are worth about the same amount of money, although I haven’t worked out the details.
- Or pseudodemocratic processes, in this case.