By Teresa Rochester

The City Council Tuesday night created the first business district in 17 years when it voted to allow businesses along Pico Boulevard to tax themselves in an effort to promote their services and tackle a growing parking problem.

In a 6 to 0 vote (Councilman Robert Holbrook abstained) the council approved the creation of the Pico Business Improvement District, making the 34-block stretch the city's fourth business district.

Joining their trendier neighbors, Main Street, Montana Avenue and the Bayside District, the designation will allow the eclectic mix of shops to raise approximately $63,700 through assessments.

"This is a very exciting time for Pico businesses and the whole length of Pico," said Councilman Richard Bloom.

"I think the business improvement district will do a lot for all the businesses along Pico," said Jim Stebinger, chairman of the Pico Improvement Association and an employee of Trader Joe's. "There are many benefits it will bring, and Pico is in need of it because of the vast discrepancy between small businesses and very large businesses. There's a lot of work ahead of us. This is a big first step."

Annual assessments would be paid according to the following formula:

· Retail, hotels and motels would pay a sliding scale equivalent to the business license fee up to an annual maximum of $1,000.
· Non-retail businesses would pay a fixed fee of $100 per year.
· Auto-related retail, service stations and repair shops would pay an annual fee equivalent to the business license fee, but with a cap of $500 a year.
· The minimum for all business license holders would be $100 a year.

Carol Jones, a part time massage therapist at the Mirama Hotel's day spa, told the council that it wasn't fair for employees in professions that require individuals to have business licenses to have to pay the $100 assessment.

"I'm really for prettifying Santa Monica," Jones said. "I am forced to call myself a business owner even though I'm just an employee and I have to pay $100."

Gwen Pentacost, a senior analyst for economic development for the city, told the council that businesses making less than $20,000 a year would have to pay a $50 assessment.

The Chamber of Commerce, which has assisted in the formation of the Pico Business Improvement District, will provide administrative support, bookkeeping, liability insurance, payroll reporting service and other functions necessary to administer the district.

The Chamber administers all of the business districts in the city, but business owner Bunnie Beyer argued that district members should be allowed to choose their own administrator.

"The Chamber is charging 10 percent for administrators," Beyer said. "We ought to be free to negotiate with the Chamber for the services we get. Let the people who are running this decide."

Mayor Ken Genser agreed saying that "it's the district's money, and they should choose who they want."

Genser said he wanted to ensure the BID money would not "be used in a partisan way or a political way."

The Chamber of Commerce has actively battled a move by the council to consider an unprecedented living wage law and has opposed measures to enforce a 15-year-old sign ordinance and a 10-year-old auto repair shop law.

Councilman Paul Rosenstein argued that Genser's amendment was unnecessary.

"We are trying to fix something that isn't broken," Rosenstein said. I don't really think it's necessary. This is a waste of the city's time."

After a failed motion by Genser to delay the creation of the BID until the city could study the way the administration contract is awarded, the council voted to let the BID move forward on the condition that the Chamber only serve as administrator for a year. After that, the BID's board of directors could look for another administrator.

Councilman Robert Holbrook abstained.

"We are widely viewed as being anti-business," Holbrook said. "The message will be clear that this council is concerned about the chamber of commerce. This is simply a contract. It ought to be dealt with that way and not politically."

The council also directed staff to study the five percent fee the city takes from each assessment, as well as procedures for assessments that are paid late.