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Assessment Fees Rise to Offset Downtown Santa Monica Operation Costs

Santa Monica Real Estate Company, Roque and Mark


Rusty's Surf

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore Kutcher & Kozal, LLP

By Jason Islas
Staff Writer

July 23, 2013 -- For the first time since they were adopted five years ago, the assessment fees paid by Downtown Santa Monica property owners increased this month to help offset rising operation costs.

The decision, made in May by the Downtown Santa Monica, Inc. (DTSM) Board, will raise by three percent the existing annual fees levied on building owners, who currently pay from $0.19 per square foot on the outskirts of Downtown to $0.76 on the Promenade.

“We have had increased costs with our programs and have stretched our budget over these years,” said Kathleen Rawson, the agency’s CEO. “We don't like to increase the assessments unless we absolutely have to.”

The Property Based Assessment District (PBAD) provides DTSM with its largest source of revenue: approximately $3.5 million annually.

The assessment district is divided into three zones, each of which pays assessment fees according to the number of Downtown services and programs it receives. In areas outside the Promenade, the rates are also determined by how a property is used.

The revenue pays for “enhanced maintenance, an ambassador program, marketing and special projects beyond those provided by the City of Santa Monica,” according to officials.

The three percent increase, which will help the nonprofit agency pay for rising advertising and promotional costs, would add $100,000 to the operating budget, officials estimated.

Originally, the Board was considering a five percent increase, the maximum allowed under the resolution approved by the City Council in 2008. However, the Board was largely divided, with some members worried that raising the fees would unfairly burden local businesses recovering from the nationwide recession.

Rawson said the increase was necessary to support the agency’s promotional efforts. “We need to bump up holiday décor,” she told the Board at its meeting May 23. “It takes a lot to make an impact.

“Independent revenue from sponsorships and promotions have been stifled,” Rawson said, noting that has led to a loss of some $200,000 from DTSM’s operating budget.

Also at the May meeting, the Board voted to renew its contracts with Block by Block, the company that operates the Downtown Ambassador program, which costs $1.25 million a year.

The Board also renewed a half a million dollar contract with H2O Powerwash to clean the Downtown sidewalks and another $570,000 contract to Block by Block handle the upkeep of the public parking structures.

It also will pay Chrysalis, a local nonprofit that helps homeless and low-income people get jobs, $80,000 to provide employees who help clean the Downtown area.

“We were satisfied with the delivery of the service and quality of the work,” said Rawson.

At its April meeting, the Board unanimously agreed to support a City pilot parking program. The program would set a three-hour time limit in the lower levels of the Downtown parking structures from 8 a.m. to 6 p.m.

The Board also voted to rehire Quigley & Miron as its auditing firm through the 2015 fiscal year, but will be on the lookout for a new contractor at the end of that term “as a matter of best practice,” Downtown officials said.

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