Many business owners have said they're opposed to paying an assessment for the downtown Business Improvement District, but they may soon have no choice.
Two years after it chose not to levy BID assessments, the Crescent City Council on Monday voted 3-2 in favor of making the assessments mandatory for downtown business owners to obtain or renew a business license. Mayor Rich Enea and Councilman Rick Holley dissented.
Holley and Enea also cast "no" votes when the Council approved a resolution of intent to levy the BID assessment fees. The ordinance and the resolution that actually implements those fees will be brought before the Council for a public hearing June 3.
The proposed ordinance reduces the annual BID assessment fees for retail, restaurant, service, professional and financial businesses in the downtown area to $100. The new ordinance also assesses $50 fees for nonprofits, veterans and booth renters in the downtown area.
Business owners who do not pay the assessment they could be subject to late fees and ultimately administrative citations, according to the proposed ordinance.
BID assessments currently range from $167 for retailers with three employees to $432 for retailers with 10 or more employees, according to the Crescent City Municipal Code. Restaurant owners and service businesses pay $150, professional businesses pay $100 and financial businesses pay $400, according to the Municipal Code. Nonprofits and booth renters in the downtown area currently pay $50 in BID assessments.
According to BID President Billie Kaye Gavin-Tygart, the BID board has spent the last four months discussing and going over the proposed ordinance line by line to create something that works for everyone in the downtown area. The final ordinance was approved unanimously by the BID advisory board, she said.
"We have been working hard," Gavin-Tygart said. "We did want to roll this out. Three years ago we were poised to make great achievements, but we have not done that."
During the City Council meeting, Council members Kelly Schellong, Kathryn Murray and Ron Gastineau argued that BID is beneficial to the downtown area, that events like the Wednesday Farmer's Market generate a lot of foot traffic, and its demise would be a huge drawback.
Enea and Holley cited three surveys, including one the city conducted two years ago, which resulted in 73 percent of downtown business owners and operators saying they were not interested in BID.
During public comment, even though only a handful of business owners attended the meeting, most were not in favor of the assessments being tied to business licenses. BID is not working, they said, and if most business owners aren't interested in participating, why have it?
"It is difficult to run a business in these lean economic times without coming up with more fees for merchants to pay and a few people to determine how it's spent," said Diana Tomasini, owner of the Enchanted Florist on Third Street. "I have contacted quite a few merchants regarding BID and more than 80 percent do not want BID. Most including myself are not going to pay fees if they vote to put them in. BID is not working."
Sam Rutledge, a former member of the BID board, said he hasn't seen the organization make any progress. According to him, the proposed fee assessments weren't discussed during his tenure on the BID Board, which ended two months ago.
"The comments earlier about the surveys taken, all three show a preponderance of (business owners) not wanting to be in BID," Rutledge said. "BID was established for 20 years, it sat fallow for 15 or so and it's been struggling for the last four or five years. I don't think it's worth saving. I think you should just kill it, dissolve it, unincorporate it or whatever the term would be to get rid of the thing."
A current BID member, Dee Ward, a hairdresser at Wendy's Salon, said the organization focuses its efforts and activities on Third Street more than any other street in the district.
"We have to find a structure to help not only Third Street, but the other people need help too," she said. "We want to see the money represented from Fifth Street to Front Street."
After listening to the merchants' comments, Schellong introduced a motion that would still have implemented the BID assessment fees, but paying them wouldn't be mandatory to receive or renew a business license. Murray initially seconded the motion, but later rescinded her second.
City Attorney Bob Black and City Manager Eugene Palazzo pointed out that not tying the BID assessment fees to business licenses would "remove the teeth" from the ordinance.
"Where does that leave us in collecting that fee?" Palazzo asked. "If people are not collecting and the downtown district comes to my door and says, 'Hey city you need to collect this fee,' I'm going to need to come back to the Council and say how would you like me to proceed. I need to have clear direction on how to proceed."
Schellong asked Palazzo for some options on how to go about enforcing the BID assessment fees.
"There are a lot of people that support BID and are going to be thankful of paying $100 instead of $400 and will continue to pay," Schellong said. "I remember sitting down there with business people when it was not mandatory, it wasn't even billed by the city, and we still collected $5,000 or $6,000."
City officials will send a notice to downtown business owners notifying them of the proposed change in BID assessment fees, Enea said.
Reach Jessica Cejnar at email@example.com.