M E M O R A N D U M January 27, 2000
TO:	Mayor Owen and Councillors
COPY TO:	Ulli Watkiss, City Clerk - Court of Revision Judy Rogers, City Manager Nathan Edelson, Planning Peter Vaisbord, BIA Coordinator
FROM:	Ann McAfee, Director of City Plans
SUBJECT:	Court of Revision Applications

APPLICATIONS

On December 16, 1999, Council considered applications to establish four new Business Improvement Areas (BIAs) as follows:

Proposed Commercial Drive BIA
Proposed Fraser Street BIA
Proposed Marpole BIA
Proposed Strathcona Area BIA

Council referred all four applications to the Court of Revision for consideration as Council Initiatives.

ACTIONS

After reviewing letters of objection and hearing from delegations Council may choose to:

A. APPROVE THE APPLICATION

Section 4 of this memo outlines past practice with respect to approval of a BIA application. Council practice has been to approve the application if less than one-third of property owners or business tenants are in opposition. If Council wishes to approve the application, the following motion is appropriate:

"THAT the application of the [name of association], as described in Appendix A, be approved and that the Director of Legal Services, in consultation with the Director of City Plans, prepare a by-law to establish the BIA and funding ceiling."

Where an expansion or new BIA application appears to be generally supported, but is strongly opposed within a specific area, Council may determine and approve reduced boundaries. While Council has re-drawn boundaries to exclude properties on the edge of a BIA area, it has not been City practice to exclude properties situated within a BIA area.

B. NOT APPROVE THE APPLICATION

Several criteria identified in the past as possible reasons for rejecting a BIA application are outlined in section 4 of this memo. Should Council choose to reject the application the following motion is appropriate:

"THAT the application of the [name of association] to establish the proposed BIA, as described in Appendix A, not be approved."

C. COUNCIL WISHES FURTHER INFORMATION

Since there are a large number of properties involved, representing considerable variation in assessed values, Council may require additional information to assess the level of opposition. If, after hearing delegations, Council wishes further information the following motion is appropriate:

"THAT the hearing of the application by the [name of association] to establish the proposed BIA, as described in Appendix A, be concluded; and

THAT, before Council decides on the application, the Director of City Plans, in consultation with the Director of Finance and Director of Legal Services, assess information received from opponents of the proposal and report to Council on the proportion of property owners and/or business tenants, by number of properties and assessed value, who do not support the proposal.

1. BACKGROUND

Sections 455 through 463 of the Vancouver Charter make provision for the creation and funding of Business Improvement Areas (BIAs). Taxation of properties in an area pays for a variety of programs to promote and enhance the area.

For a BIA to be approved, the proposal must be considered at a Court of Revision:

· Prior to the Court of Revision, the City notifies all property owners and business tenants of the Court of Revision Hearing, the proposed levy, and details on filing objections; and

· At the Court of Revision Council is advised of letters of opposition. Council also hears delegations. Council policy is that if one third of property owners, representing one third of the assessed property value, or business tenants, counted separately, object, the BIA proposal will be defeated.

· If approved, Council directs that a by-law establishing the BIA boundaries and funding ceiling be prepared.

Further explanation of the notification and Court of Revision process follows.

2. NOTIFICATION PROCESS

BIA applications are a form of local improvement. As such, the City is required to mail to the owners of parcels liable to be assessed notification of the project, the designated area, and estimated annual rate. The notification letter must be sent at least one month prior to the hearing. While the Charter does not require notification of tenants, it is City policy to notify business owners of a BIA proposal. Staff have notified property owners and business tenants in the areas affected by the BIA proposals:

· Individually addressed letters were sent, postmarked on or before December 24, 1999, to all property owners affected by the BIA application.

· The City does not have a current record of all business owners in an area. Letters to business owners were hand delivered to all businesses affected by the BIA application.

3. LETTERS OF OPPOSITION

Property owners / business tenants who oppose the proposal(s) were invited to either write to the City Clerk, with the letter being received by 5:00 p.m. on January 26, 2000, or address Council directly at the Court of Revision.

Several questions emerged during the public process:

· Who will be charged: The BIA levy only applies to commercial and light industrial (Class 5 and 6) properties. Some letters were incorrectly hand delivered to residential properties. Several residential tenants called and were advised the levy will not apply to them.
· Can an owner choose to opt out: If the levy is approved it applies to all eligible owners.
· Is there a charge to property owners and to business tenants: There is one levy and it is included as part of the annual taxation bill sent to property owners. It is up to each owner as to whether they pass the charge along to tenants and how the amount charged to tenants is allocated.

4. BASIS FOR COUNCIL ACTION

Under section 506 of the Vancouver Charter a "sufficient number" of notices of objection to defeat a Local Improvement Council Initiative is deemed to be more than one-half of the assessed owners, representing more than one-half of the value according to the last revised real-property assessment roll, of the parcels liable to be assessed. However, Council guidelines apply a more stringent standard for BIAs.

Council policy with respect to BIA applications has been to identify the "sufficient number" of objections to be either one-third of the assessed owners, representing at least one-third of the assessed value or one-third of the business tenants, counted separately. The one-third guideline has been used by Council to reflect the fact that Council initiatives require those who oppose an application to make the case that the levy is not desired. Typically, local improvements involve only a few owners, and in many cases have each petitioned to have the work done. This is not the case for a BIA application. For a large area, with many owners, the task of assembling sufficient opposition is difficult. For this reason, Council policy is to consider rejection if one-third, rather than one-half, of the owners or tenants oppose the application.

5. TABULATION OF RESULTS

Following this memo are separate appendices for each of the proposed BIAs (Appendix A - D) which provide notification data for the applications, and a tabulation of letters of opposition received as of January 25, 2000. The City Clerk will distribute copies of all objections received prior to the Court of Revision. As objections may be accepted until 5 p.m., January 26, 2000, staff will distribute a supplementary memo with updated opposition data. Representatives from each of the applicants will be in attendance to respond to questions about the respective BIA proposals.

6. APPENDIX D - RECOMMENDATIONS

Staff comments regarding the Strathcona BIA (Appendix D) include two Recommendations to address issues raised by some of the affected community groups. Staff recommend that approval of BIA funding be conditionalon the Strathcona Area Merchants Association agreeing to follow the course of action set out in the two Recommendations set out in Appendix D.

Dr. Ann McAfee

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Attachments
PROPOSED COMMERCIAL DRIVE BIA

Application to Establish BIA

On December 16, 1999, Council considered an application by the Commercial Drive Business Society to establish the proposed Commercial Drive BIA (Attachment A). Council referred the application to the Court of Revision for consideration as a Council Initiative.

The proposed BIA levy ranges from $146 to $12,870 annually, depending upon the assessed value of the property. About 135 properties will have a levy between $100 and $1,000, and 20 properties will be charged over $1,000 annually.

As adjustments to boundaries and budgets are presently being made, there may be some variation between actual levies and the figures quoted above.

Notification

Individually addressed letters (Attachment B) were sent, postmarked on or before December 24, 2000, to 136 property owners, owning 155 legal parcels located within the proposed BIA boundaries. One letter was returned because the owners had moved with no forwarding address.

Letters (Attachment C) were hand delivered to all businesses within the proposed BIA. Over 275 letters were delivered.

Letters of Opposition

As of 5:00 p.m., January 25, 2000, letters of objection had been received from one property owner (0.7% of total) representing one assessed property (0.7% of total) and an assessed value of $159,000 (0.2% of total). Two tenants responded (0.7% of total).

For information, should Council wish to apply the one-third guideline then:

· one-third of the number of assessed properties is 52 properties (subject to adjustments);
· since there are many multiple owners, one-third of the actual owners is 45 owners (subject to adjustments); and
· one-third of the assessed property value is in the order of $29,339,057.

Should the final number of owners or tenants indicating opposition approach the one-third guideline, Council may wish to consider denying the BIA application. As of January 25, 2000, the number of owners/tenants opposing the proposal is considerably less than one-third. However, should Council receive, on February 1, 2000, a petition or delegations indicating more wide spread opposition, then it will likely take some time to calculate whether the objections reflect one-third of the assessed property value. If this is the case, Council may wish to conclude the Court of Revision and have staff calculate the level of opposition. Recommendation C offers a way for staff to provide additional advice prior to Council deciding on the BIA application.
PROPOSED FRASER STREET BIA

Application to Establish BIA

On December 16, 1999, Council considered an application by the Fraser Business Association to establish the proposed Fraser Street BIA (Attachment A). Council referred the application to the Court of Revision for consideration as a Council Initiative.

The proposed BIA levy ranges from $162 to $4,167 annually, depending upon the assessed value of the property. About 65 properties will have a levy between $100 and $1,000, and 40 properties will be charged over $1,000 annually.

As adjustments to boundaries and budgets are presently being made, there may be some variation between actual levies and the figures quoted above.

Notification

Individually addressed letters (Attachment B) were sent, postmarked on or before December 24, 2000, to 92 property owners, owning 107 legal parcels located within the proposed BIA boundaries. Five letters were returned either because the property had sold to new owners, the owners had moved, or the address was incorrect.

Letters (Attachment C) were hand delivered to all businesses within the proposed BIA. Over 200 letters were delivered.

Letters of Opposition

As of 5:00 p.m., January 25, 2000, letters of objection had been received from two property owners (2.2% of total) representing three assessed properties (2.8% of total) and an assessed value of $1,703,800 (2.3% of total). 19 tenants responded (9.5% of total). Council may wish to consider the weight to be given some of the responses, as the property owner response and 14 of the tenant responses were delivered in the form of a petition, rather than as opposition letters sent independently.

For information, should Council wish to apply the one-third guideline then:

· one-third of the number of assessed properties is 36 properties (subject to adjustments);
· since there are many multiple owners, one-third of the actual owners is 31 owners (subject to adjustments); and
· one-third of the assessed property value is in the order of $25,055,930.

Should the final number of owners or tenants indicating opposition approach the one-third guideline, Council may wish to consider denying the BIA application. As of January 25, 2000, the number of owners/tenants opposing the proposal is considerably less than one-third. However, should Council receive, on February 1, 2000, a petition or delegations indicating more wide spread opposition, then it will likely take some time to calculate whether the objections reflect one-third of the assessed property value. If this is the case, Council may wish to conclude the Court of Revision and have staff calculate the level of opposition. Recommendation C offers a way for staff to provide additional advice prior to Council deciding on the BIA application.
PROPOSED MARPOLE BIA

Application to Establish BIA

On December 16 1999, Council considered an application by the Marpole Business and Landlords Association (MBLA) to establish the proposed Marpole BIA (Attachment A). Council referred the application to the Court of Revision for consideration as a Council Initiative.

The proposed BIA levy ranges from $193 to $11,851 annually, depending upon the assessed value of the property. About 60 properties will have a levy between $100 and $1,000, and 20 properties will be charged over $1,000 annually.

As adjustments to boundaries and budgets are presently being made, there may be some variation between actual levies and the figures quoted above.

Notification

Individually addressed letters (Attachment B) were sent, postmarked on or before December 24, 2000, to 60 property owners, owning 77 legal parcels located within the proposed BIA. One letter was returned because the owners had moved with no forwarding address.

Letters (Attachment C) were hand delivered to all businesses within the proposed BIA. Over 150 letters were delivered.

Letters of Opposition

As of 5:00 p.m., January 25, 2000, letters of objection had been received from one property owner (1.7% of total) representing one assessed property (1.3% of total) and an assessed value of $756,000 (1.2% of total). As this property is on the southern edge of the proposed BIA, the MBLA has agreed to amend its boundary proposal to exclude the property. The excluded parcel is indicated by notations to Attachment A. There have been no property owner objections received to date within the reduced BIA boundary.

A letter has been received from a tenant who responded conditionally, indicating that he supported the BIA proposal if parking is not removed from Granville Street. If this response is counted as an opposition, it represents 0.7% of the total number of businesses. A letter was received from another tenant objecting to the BIA process, specifically the requirement that opposition letters be submitted in order to defeat a BIA. The writer specifically states that the letter not be taken as either support or opposition to the current BIA proposal.

For information, should Council wish to apply the one-third guideline then:
· one-third of the number of assessed properties is 26 properties (subject to adjustments);
· since there are many multiple owners, one-third of the actual owners is 20 owners (subject to adjustments); and
· one-third of the assessed property value is in the order of $21,844,853.

Should the final number of owners or tenants indicating opposition approach the one-third guideline, Council may wish to consider denying the BIA application. As of January 25, 2000, the number of owners/tenants opposing the proposal is considerably less than one-third. However, should Council receive, on February 1, 2000, a petition or delegations indicating more wide spread opposition, then it will likely take some time to calculate whether the objections reflect one-third of the assessed property value. If this is the case, Council may wish to conclude the Court of Revision and have staff calculate the level of opposition. Recommendation C offers a way for staff to provide additional advice prior to Council deciding on the BIA application.
PROPOSED STRATHCONA AREA BIA

Application to Establish BIAJanuary 27, 2000

On December 16, 1999, Council considered an application by the Strathcona Area Merchants Association (SAMS) to establish the proposed Strathcona Area BIA (Attachment A). Council referred the application to the Court of Revision for consideration as a Council Initiative.

The proposed BIA levy ranges from $120 to $18,136 annually, depending upon the assessed value of the property. About 25 properties will have a levy of less than $100. 400 properties will be charged between $100 and $1,000, and 40 properties will be charged over $1,000 annually.

As adjustments to boundaries and budgets are presently being made, there may be some variation between actual levies and the figures quoted above.

Notification

Individually addressed letters (Attachment B) were sent, postmarked on or before December 24, 2000, to 358 property owners, owning 472 legal parcels located within the proposed BIA boundaries. Seven letters were returned either because the property had sold to new owners, the owners had moved, or the address was incorrect.

Letters (Attachment C) were hand delivered to all businesses within the proposed BIA. Over 350 letters were delivered.

Letters of Opposition

After property owners were formally notified, SAMS and staff received telephone calls from a few property owners, located on the northern edge of the proposed BIA, requesting that they be excluded from the BIA, on the ground that they would not benefit from BIA activities. One of these is a major holding representing 8.5% of the total assessed value; collectively, the properties represent 10.5% of the assessed value. In response, SAMS has voluntarily agreed to amend its northern boundary to exclude the parcels. The excluded parcels are indicated by notations to Attachment A.

As of 5:00 p.m., January 25, 2000, letters of objection had been received from 20 property owners (5.6% of total) representing 28 assessed properties (5.9% of total) and an assessed value of $17,634,026 (7.9% of total). Five tenants responded (1.4% of total).

For information, should Council wish to apply the one-third guideline then:

· one-third of the number of assessed properties is 157 properties (subject to adjustments);
· since there are many multiple owners, one-third of the actual owners is 119 owners (subject to adjustments); and
· one-third of the assessed property value is in the order of $74,131,166.

Should the final number of owners or tenants indicating opposition approach the one-third guideline, Council may wish to consider denying the BIA application. As of January 25, 2000, the number of owners/tenants opposing the proposal is considerably less than one-third. However, should Council receive, on February 1, 2000, a petition or delegations indicating more wide spread opposition, then it will likely take some time to calculate whether the objections reflect one-third of the assessed property value. If this is the case, Council may wish to conclude the Court of Revision and have staff calculate the level of opposition. Recommendation C offers a way for staff to provide additional advice prior to Council deciding on the BIA application.

Input from Community Groups

On December 16, 1999, Council instructed staff to notify all affected community organizations, including, but not limited to, Community Directions, Urban Core Workers, and the Downtown Eastside Strathcona Coalition. A total of 54 groups were notified, as indicated in Attachment D.

To date, one letter has been received (Attachment E) as well as a number of telephone calls expressing concern about SAMS objectives and its BIA proposal. Some of these concerns were in response to preliminary draft objectives. These objectives have been significantly amended to better reflect the ways in which SAMS proposes to work to promote business and to "reduce the negative impacts of the illegal drug trade and street prostitution in cooperation with local residents and agencies, the City and other levels of government".

Two key concerns have emerged in discussions with staff:

1. In the past, some BIAs have hired private security personnel to deal with `undesirable' activities, and there is a concern that security activities have had a negative impact on low-income residents. While SAMS states that it does NOT intend to use private security, community groups are concerned that this could change in the future. Staff have asked SAMS whether it would commit to participation in a facilitated public process through the Downtown Eastside Community Revitalization Program, as a condition of Council approval of the BIA. SAMS has indicated a willingness, in principle, to do so.

Recommendation 1: That approval of the proposed BIA be conditional on the Strathcona Area Merchants Society agreeing to participate in and abide by the outcome of facilitated, and if necessary mediated, discussions through the Downtown Eastside Community Revitalization Program, with affected community groups, to resolve issues that may arise from any initiatives which may affect conditions on the street including reducing the negative impacts of the illegal drug trade and street prostitution.

2. Many of the community groups are non-profit societies occupying storefronts and other commercial premises. As with the business tenants, any increase in taxes, including the proposed BIA levy, may be passed by their landlords on to the community groups. Some groups feel that it is not fair that they be required to pay additional rent to help fund activities which they might not support. SAMS is willing to consider a rebate to non-profit societies in the amount of the additional levy. A budget amount to cover the potential outlay would have to be approved annually by the BIA membership.

Recommendation 2: That, as a condition of approval of funding, the Strathcona BIA agree in principle to reimburse non-profit societies the share of the BIA levy paid to their landlord. The detailed mechanism for reimbursement will be developed by the BIA and staff, in consultation he community.

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(c) 1998 City of Vancouver