ADMINISTRATIVE REPORT

Date: January 22, 1999
Author/Local:PeterVaisbord/6304

RTS No. 350
CC File No. 8305

TO:	Standing Committee on Planning and Environment
FROM:	Director of City Plans
SUBJECT:	Approval of Council Initiative - Proposed Chinatown BIA

RECOMMENDATION

A. THAT Council re-confirm its approval of the Chinatown Merchants Association (CMA) as sponsor for the proposed Chinatown BIA.

B. THAT Council approve the commencement of a Council Initiative to establish the proposed Chinatown BIA;

AND FURTHER THAT Council forward the application of the Chinatown Merchants Association to a hearing of the Court of Revision.

C. Given there is some question as to whether there will be sufficient support from property owners at the Court of Revision to ensure approval of the CMA application, THAT Council encourage the CMA and the Chinatown Property Owners Association (CPOA) to reach a mutually agreeable solution for the future management of a Chinatown BIA;

AND FURTHER THAT Council inform the applicants it will take such proposals into account when considering the application at the Court of Revision.

D. THAT the City notify the property owners and tenants in the area (outlined in Appendix A) of the proposed BIA and BIA levy.

CONSIDERATION

E. THAT Council defer approval of a sponsor for the proposed Chinatown BIA to provide a further opportunity for the two applicants to negotiate a joint application, or for the Chinatown Property Owners Association to provide evidence of support;

AND FURTHER THAT staff report back on the results of the negotiations and/or the request for evidence of support.

GENERAL MANAGER'S COMMENTS

The General Manager of Community Services RECOMMENDS approval of A, B, C and D, and submits E for CONSIDERATION.

COUNCIL POLICY

Section 456 of the Vancouver Charter gives Council the authority to create a Business Improvement Area (BIA). Council may grant money to a BIA for planning and implementation of business promotion schemes provided that the money is recovered through a special property tax.

Council policies with respect to the establishment of a BIA include:

· October 14, 1997: A BIA may be established by Council Initiative; property owners and commercial tenants receive notification of the Initiative, and the BIA will not proceed if one-third or more of the tenants or owners, counted separately, are in opposition.

PURPOSE

The Chinatown Merchants Association (CMA) has submitted documentation of its outreach efforts and has completed the first step in the process of establishing a new Business Improvement Area (BIA).

The Chinatown Property Owners Association (CPOA) has also applied to establish a BIA over essentially the same area as that proposed by the CMA. The CPOA has not submitted documentation of its outreach efforts, but requests that its application be considered by Council.
The purposes of this report are to consider approval of a sponsor for a Chinatown BIA and to consider a Council Initiative for the proposed Chinatown BIA.

BACKGROUND

Until October 1997, the process for establishing a BIA required a petition of support from at least 50 percent of owners (representing 50 percent of the assessed property value), and a tenant survey, before Council would consider hearing an application to form a BIA. Because the collection of signatures had apparently been an insurmountable task, a number of applicants tried, but failed to meet the target requirements.

In October 1997, Council approved a streamlined process which eliminates the Petition requirement, and proceeds entirely by way of Council Initiative, i.e., the BIA initiative will not succeed if one-third of the property owners or tenants (counted separately) are in opposition.

Under the Council Initiative process, applicants are required to contact all property owners and businesses within the proposed area, solicit support for the BIA proposal, and forward documentation of their outreach activities to the City. Most applicants hold public meetings and distribute a survey to ascertain the level of support for their BIA proposal. This provides information for Council to determine whether a proposal is generally supported and can be forwarded to Court of Revision for formal hearing.

DISCUSSION

During the past year, the City has received applications from two organizations wishing to establish a BIA in Chinatown: The Chinatown Merchants Association (CMA) and the Chinatown Property Owners Association (CPOA). The BIA boundaries proposed by the two applicants are virtually identical, the major exception being the inclusion of International Village within the boundaries of the CPOA proposal. The CMA boundaries are attached as Appendix A. The CPOA boundaries are attached as Appendix B. Both applicants are proposing an annual budget of $300,000. Based on the CMA's proposed boundaries, the cost to property owners would be approximately $1.28 per $1,000 property value, which is similar to the rate paid in Gastown in 1997/98. Based on the CPOA boundaries, which encompass International Village, the rate would be 77c per $1,000.

Chinatown Merchants Association (CMA)Proposal

The Chinatown Merchants Association (CMA) has been operating in Chinatown as a voluntary organization since 1981. In June 1991, Council first approved the CMA as a BIA sponsor. In September 1993, the CMA commenced the first of two attempts to establish a BIA under the former procedure, which required a petition representing the support of 50% of the affected property owners (representing 50% of the assessed property value). The time and volunteer resources required to collect the signatures proved too much for the CMA, and the application was abandoned.

In 1995, the CMA made a second attempt to establish a BIA in Chinatown. While the number of property-owner signatures obtained (70% of properties) was sufficient, the property value (40% of assessed value) was insufficient to meet the City requirements.

In February 1998, following the changes to the City BIA process, the CMA formed a BIA committee to consider a new sponsorship application and BIA proposal. The CMA indicated its intention to re-apply to the City for consideration of a BIA under the new process on April 28, 1998. A copy of their application letter is attached as Appendix C. As required by the City, the CMA has incorporated a separate non-profit society under the Societies Act, for the purpose of administering the BIA. It was registered on July 7 1998, as the Vancouver Chinatown BIA Society.

The CMA wishes to implement a BIA in 1999.

Chinatown Property Owners Association (CPOA) Proposal

The Chinatown Property Owners Association formally applied to the City for consideration of a BIA on April 15, 1998. A copy of their application letter is attached as Appendix D. As required by the City, the CPOA has incorporated a separate non-profit society under the Societies Act, for the purpose of administering the BIA. It was registered on April 24 1998, as the Chinatown Business Improvement Association.

In a letter received on January 20 1999, the CPOA notes that it wishes to pursue a BIA for implementation in the year 2000. Alternatively, the CPOA is willing to support the application of the CMA if a mutually acceptable arrangement can be found for property owner representation on the BIA board.

Process for Assessing Support

This is the first time the City has received competing applications to sponsor and establish a BIA over essentially the same area. Staff have offered to help facilitate discussions to put forward a joint application, but to date there appears to be little interest in pursuing such an initiative.

The emergence of two applications required staff to define a procedure for determining the relative level of support for each applicant. Council normally requires a sponsor to provide documentation of outreach efforts showing indications of support from property owners and tenants. In the present case, staff requested each of the two applicants to document their support by collecting and submitting signatures from property owners and commercial tenants within their respective proposed boundaries. The applicants were NOT required to achieve a 'target' percentage of signatures (as in the former petition process), but staff have tabulated the results to help Council determine which applicant, if any, should be approved.

For the collection of signatures, staff prepared a 'sponsor support form' in English and Chinese, several hundred copies of which were sent to each of the applicants. The forms are double sided: One side explains how a BIA works and how it is formed; the reverse side is the actual support form. The English version of the form is attached as Appendix E.

Staff indicated that completed forms would be accepted either from the applicants, or directly from property owners and tenants. The deadline for return of completed forms was October 31, 1998.

1. CMA Submission of Support

Completion of Sponsor Support Forms

Within the boundaries proposed by the Chinatown Merchants Association, there are approximately 130 property owners and 300 commercial tenants. The City has received a total of 335 completed forms indicating support for the CMA. This includes 82 property owners (approx. 63%) and 253 businesses (approx. 84%).

Outreach Activities

Since May of this year, the Chinatown Merchants Association has actively been working toward the present BIA application. In addition to mail distribution of sponsor support forms, the CMA has conducted its outreach activities through mailouts to property owners and tenants. The mailouts included information about the BIA proposal, a survey form (abandoned when the City form was produced), a BIA society membership form, and notices of public information meetings. The CMA held two public information meetings which were reported in the Chinese press. Based on the responses to the sponsor support form and their general outreach, the CMA believes their BIA proposal is generally supported. Documentation of their outreach activities is attached as Appendix F.

Staff Comments - CMA Submission

Staff are satisfied that the CMA has notified property owners and tenants within the proposed BIA boundaries. Staff attended two public information meetings held at the Chinese Cultural Centre at which approximately 60 people (in total) were in attendance. Participants seemed generally supportive, although there were concerns raised regarding costs and benefits, and complaints from some participants that not enough CMA literature is in English.

The City's sponsor support form asked recipients to choose between two sponsors, and not whether they favoured a BIA; however, the results may be seen as an indication of support/opposition for the applicant's BIA proposal. As there are approximately 130 properties and 300 businesses within the proposed BIA area, the results should be very reliable, with an overall response rate of 77.9 %.

The City's sponsor support form contained the name and telephone number of the City's BIA Coordinator. The coordinator received 2 calls (representing property owner and tenant interests) both of which indicated possible non-support of a BIA if it meant creation of a third business organisation in the area.

The documented outreach activities and results are sufficient for staff to recommend forwarding the CMA proposal to the Court of Revision.

2. CPOA Submission of Support

Completion of Sponsor Support Forms

Following receipt of the blank signature forms, the Chinatown Property Owners Association indicated that, due to a number of concerns (see below), it would not participate in the signature-gathering process. To date, the CPOA has not returned any completed sponsor support forms.

Outreach Activities

The CPOA has provided neither the completed sponsorship forms nor any other documentation of its outreach efforts. A letter received from the CPOA on January 20 1999, notes that the BIA is proposed to commence in 2000, presumably providing additional time to gather support.

Staff Comments - CPOA Submission

As the CPOA has provided no documentation of its outreach activities, staff have no basis on which to gauge support for the CPOA, or even to determine whether the CPOA has approached property owners and businesses within its proposed BIA boundaries. Therefore, with the information currently at hand, there is no basis upon which staff can recommend that Council refer the CPOA application to a Court of Revision.

3. Overall Comments Regarding Sponsor Support

With only one of the two applicants participating in the sponsor support process, it is difficult to determine with certainty their relative levels of support. However, assuming that all property owners and tenants who did not complete the form support the CPOA, then CPOA would have, at best, 37% of the property owners and 16% of the tenants, compared to 63% and 84% respectively for the CMA. Therefore, the numbers would strongly favour the CMA as BIA sponsor.

As individuals were asked only to indicate which of the two sponsors they support, the results cannot alone be taken as a poll of support for the CMA's BIA proposal itself. If Council wishes to interpret these results as an initial indication of BIA support, it is important to note that if Council forwarded the CMA proposal to the Court of Revision, it could be defeated by the 37% of property owners presently unaccounted for.

4. Concerns With the Sponsor Support Process

The Chinatown Property Owners Association has raised concerns with the City's sponsor support process. The main points are summarized as follows:

(a) CPOA concern: The sponsor support process was essentially an election or referendum, and should therefore have followed election or referendum procedures.

Staff comment: The sponsor support process is not an election or referendum. It is simply a method to help Council determine the relative level of support for each applicant, so that Council can decide whether to forward an application to a hearing of the Court of Revision. The Court of Revision is the formal hearing.

(b) CPOA concern: The process does not ensure that non-support forms returned to the applicant would be passed on to the City; nor does it ensure that all property owners and businesses would be contacted.

Staff comment: It is true that the process does not ensure all forms are returned or all individuals are contacted. However, staff had hoped that with two groups collecting signatures, the process would be a reliable way of gauging relative support. However, with only one group collecting signatures, it is only possible to estimate the level of support for the one group.

(c) CPOA concern: Because the CPOA received the sponsor support forms 11 days later than the CMA, the CMA had an unfair advantage collecting signatures.

Staff comment: Applicants were both sent a letter on July 21 enclosing a sample form, with request to contact staff to send a supply of forms. The CMA immediately requested that the forms be sent out. Unfortunately, the CPOA did not realize they needed to request the forms. Nevertheless, staff did send the forms to the CPOA. As the October 31 deadline gave three months to complete and return the forms, a difference of 11 days is not likely to have been significant.

(d) CPOA concern: Material distributed by the CMA, written on 'Chinatown BIA Association' letterhead, may have given the impression that Council had already approved the BIA and/or the sponsorship application. Another letter distributed in May could have given the impression that if the CMA's sponsorship proposal was supported, the City would grant outright the annual cost of the Chinatown security patrol (approx. $150,000).

Staff comment: The sponsor support form included a detailed explanation of BIAs and the formation process, in both English and Chinese. The form also included a telephone number at City Hall for additional information.

It is possible that some people receiving the material distributed by the CMA may have neglected to read the information on the City's form, thereby drawing the wrong conclusions. If so, some of the forms indicating support for the CMA may not reflect informed choice. .

The above considerations should be taken into account in determining whether to approve a group to sponsor the proposed Council Initiative for a Chinatown BIA.

5. Proposal to Resolve the Dilemma of Two Applicants

Staff note that if a BIA is approved and there continue to be differences within the business community, it is unlikely the BIA will be effective in the long run. The CPOA has offered to support the CMA proposal if property owners can be assured of fair representation on the BIA Board.

It has not been the City's practice to impose a membership structure on a BIA Board, as the BIAs are arm's length non-profit associations. Nevertheless, Council may wish to encourage the two associations to seek a workable solution prior to making a final decision at the Court of Revision (Recommendation C).

Staff note that most BIAs make specific provision for representation of both property owners and business tenants. In the case of Chinatown, the total eligible membership within the proposed BIA is approximately 430 members, of which 130 (30 percent) are property owners. One option might be for the proposed BIA Board to be composed of:

· 30% property owners acceptable to the CPOA;
· 30% business tenants acceptable to the CMA; and
· 40% other eligible property owners and/or business tenants.

This would ensure at least 30% of Board members reflect the interests of property owners. At least 30% and up to 70% of Board members could represent business interests. This reflects the existing composition of property owners and business tenants in the area.

CONCLUSION

Two groups have applied to sponsor a BIA for virtually the same geographic area: The Chinatown Merchants Association (CMA) and the Chinatown Property Owners Association (CPOA). This situation, as far as staff are aware, is unprecedented. Staff have offered to facilitate a joint BIA application, but to date there appears to be little interest in pursuing a combined application.

To help Council gauge relative support for the two applicants, the City provided the applicants with sponsor support forms to be completed and returned to the City for tabulation. The CPOA subsequently indicated it would not participate in the signature-gathering process. Forms returned on behalf of the CMA indicate that the CMA is generally supported. However, 37% of the property owners remain unaccounted, and could conceivably defeat the proposal at Court of Revision.

Council has several options available to it. It can:

1. Approve either the CPOA or the CMA based on the results of the City's sponsor support form and staff comments on the respective applications;

2. Approve neither the CPOA nor the CMA; or

3. Defer approval of a sponsor group to provide further opportunities for negotiation of a joint application, and/or to provide the CMA and CPOA with a further opportunity to submit evidence of support (Consideration E).

Given dates for the Court of Revision and commencement of tax collection for 1999, if a Chinatown BIA is to start in 1999 Council would need to proceed at this time to designate a sponsor and refer a proposal to a March 1999 Court of Revision. Based on material received to date, and comparing the material provided with that received from other new BIAs, staff note that the CMA has provided adequate documentation to recommend referring the Chinatown Merchants Association proposal to a hearing of the Court of Revision (Recommendations A, B, and D).

Given the issues surrounding multiple sponsors, Council may wish to encourage the sponsors to find a mutually acceptable solution to managing the future affairs of the BIA, to be reported at the Court of Revision (Recommendation C). Alternatively, Council may prefer to adopt Consideration E to provide more time to negotiate a joint application or further confirm sponsor support levels.

APPENDICES C-F (LIMITED DISTRIBUTION. On file in the City Clerk's Office)

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(c) 1998 City of Vancouver