Downtown votes on whether to form Modesto benefit district

There is an election going on over the future of downtown that turns upside down our understanding of what voting is about.

Property owners are deciding whether they will pay annual assessments to make downtown cleaner, safer and more attractive in an effort to attract more visitors and investment. But the ballots won’t be counted based on one person, one vote. Instead, they will be tallied based on the assessments.

The votes of property owners who pay more are worth more. An owner paying $5,000 in assessments gets 5,000 votes, while an owner paying $500 gets 500 votes. The assessments are based on how much property — as measured by lot size, building square footage and how much property fronts the street — someone owns.

A downtown property owner says this is unfair. He also objects to Modesto and Stanislaus County having the most votes. The city is No. 1 and the county is No. 2 in assessments and votes. A cynic might say the district is a way for local government to direct more money to improving downtown, sort of a sneaky tax increase.

Before addressing those concerns, here is some background on the proposed Downtown Modesto Community Benefit District.

Members of the Downtown Modesto Partnership are working to form the district and include Gallo Center for the Arts CEO Lynn Dickerson, attorney Dave Gianelli and Ryan Swehla with the commercial real estate firm NAI Global. The city and county also are part of this, according to Gianelli. He said in an email that the effort is broad-based and includes the Chamber of Commerce, the Stanislaus County Business Alliance and downtown businesses and property owners.

They have hired Marco Li Mandri with the consulting firm New City America to help create the district. His services and other costs to create the district are about $70,000. Modesto has provided about $32,000 toward that effort with the rest coming from other contributors. The city and other contributors will get reimbursed if the district is formed.

The proposed district’s boundaries are roughly Seventh Street to Needham Street-Downey Avenue and G Street to L Street, which is 117 acres and encompasses 318 parcels and 214 property owners. If the district is formed, all property owners would pay the annual assessments, including government, nonprofits and churches. The district’s initial term is for 15 years.

The annual assessments are expected to be $700,000 annually, but other benefit districts leverage their assessments with grant funding and income from special events, allowing them to invest more in their districts. A nonprofit would be formed to run the district. The district’s management plan designates spending 61 percent of the assessments on what is called sidewalk operations, beautification and order, 21 percent on district identity and streetscape improvements, 14 percent on administration and corporate operations, and 4 percent for contingencies, city and county fees, reserves and special projects.

Community benefit and similar districts are common throughout California, including in Tracy, Turlock and Stockton. Their services – such as steam cleaning sidewalks, marketing and security – augment but don’t replace services provided by government.

Gianelli said in his email the district will help downtown become the pride of Modesto and tackle such problems as vagrancy, trash, empty storefronts and create a vision for downtown. He added the district will help unify and engage property owners and other downtown interests.

Here is what district advocates have to say about the concerns:

Proposition 218 – which was sponsored by the Howard Jarvis Taxpayers Association and passed by voters in 1996 – requires the ballots be weighted based on the assessment amounts. They said this was done so smaller property owners could not impose a benefit district on larger property owners.

Downtown Modesto is not unique in having local government among the big property owners. They say that is the case for downtown districts in Oakland, Redwood City, San Leandro and Glendale. And they say while local governments control about 16 percent of the Modesto vote that is not enough to form the district without the support of private property owners.

But Stanislaus County officials said this week that they want to see majority approval from the private property owners to form the district. County CEO Stan Risen said county officials stressed, during early talks with district organizers, that they did not want government to supply the margin of approval for the district.

And the public will have a voice in whether a district is formed.

The results of the balloting will be announced at the City Council’s Sept. 1 meeting. If a majority of the property owners favor the district, the council will vote on whether to form the district but not until they have heard from the public.

This story was originally published July 29, 2015 at 4:04 PM with the headline "Downtown votes on whether to form Modesto benefit district."