DOWNTOWN — Property owners should notice this month an increase in the amount of taxes they pay to keep Downtown running smoothly.
The board of Downtown Santa Monica, Inc., the public-private entity that manages and promotes Downtown for City Hall, raised annual assessment fees by 3 percent to offset some of the upsurge in operating costs, CEO Kathleen Rawson said.
It went up from 77 cents per square foot to 79 cents per square foot per year on the Third Street Promenade, she said. The assessment varies depending on which zone a property is located.
“Over the last four years the cost of everything went up a little bit and while we have absorbed that from year to year, this year the board thought it was prudent … ,” she said. “It’s not changing any of the services anybody is getting.”
The board approved the increase in May.
“The framework allows for the board to [raise] the assessments up to 5 percent a year, but we haven’t done that,” Rawson said. “This is the first assessment increase and it’s not even to the cap.”
The assessment district brings in about $3.6 million per year to Downtown Santa Monica’s budget, which is used to fund an ambassador program, special projects, and clean up area parking structures, Rawson said.
Adamm Gritlefeld, owner of Adamm’s Stained Glass & American Craft Gallery on Fourth Street, said every time something goes up, it affects him and his customers. He couldn’t remember what he paid in fees before the hike. He said the Downtown Santa Monica Ambassador Program, which provides information and directions to visitors, and cleaning of the parking structures is “good,” but he had issue with the availability of street parking.
Allan Jimenez, showroom manager at Santa Monica Bay Lighting, said he didn’t think the 3 percent increase would affect the business. He also had issues with parking on Fourth Street.
“It’s a battle all the time for getting customers because of parking,” he said. “They don’t even come to Santa Monica.”
The 3 percent increase would add $100,000 to the overall budget of the nonprofit for the year, Rawson said.
The Downtown Santa Monica Property Based Assessment District, a property and business improvement district in Downtown, was approved by the City Council in 2008 and authorized the levy of and placement of assessments on the property tax rolls each year, according to the Santa Monica Housing and Economic Development website.
The annual rates are based on three factors: The greater of the lot or building square footage, the property’s location within one of three zones of benefit and the type of use and ownership such as commercial, residential, governmental and nonprofit, the website states.
The three zones include the Third Street Promenade, everything west of Fourth Court between Fourth and Fifth streets and up to Seventh Court between Seventh Street and Lincoln Boulevard, she said.
Rawson said there was a loss of $200,000 from the nonprofit’s operating budget, in part because City Hall standardized the way events are managed last year. Rawson said Downtown Santa Monica, Inc. was charging site fees to promoters who wanted to do events on the Third Street Promenade.
“The ability to charge site fees went away,” Rawson said. “It was something the (City Attorney’s Office) had determined, something to do with Third Street Promenade being a public right of way.”
She said the nonprofit modified its marketing and promotional budget to reflect the change.