Modesto council weighs creating downtown benefit district

The City Council is expected to decide Tuesday whether to form the Downtown Modesto Community Benefit District, which would levy assessments on property owners that district advocates say would pay for improvements to make downtown cleaner, safer and more attractive, and which would bring in more visitors and investment.

The decision would come after ballots sent to 214 property owners more than a month ago are counted and the council has held a hearing to let the public weigh in on the issue. The hearing also is the deadline for property owners to turn in their ballots. The city will count the ballots after the hearing. The council can create the district only if a majority of the ballots are in favor. But the council can decide not to create the district even if there is majority support.

There are a couple of wrinkles. Proposition 218 – passed by California voters in 1996 and regulating how assessments can be imposed – requires that ballots for community benefit districts be weighted based on the assessments, so the more a property owner pays, the more his vote counts, and that all property owners pay the assessments. That means government, churches and nonprofits pay.

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. Modesto has the biggest assessment at $45,779 and the biggest vote of 6.56 percent. Stanislaus County is No. 2 with a $36,745 assessment and 5.27 percent of the vote, according to a July report provided by the city.

The city and the county, as well as the city’s former Redevelopment Agency and the Stanislaus County Office of Education, make up nearly 17 percent of the assessments and votes, according to the report. All of them have voted for or favor creating the district.

Critics say the effort to create the district is being driven by local government and not by property owners. Modesto officials have said that the city has contributed about $32,000 toward the roughly $70,000 raised to cover the costs to create the district, which includes hiring consultants.

But advocates say the effort came out of the Modesto Downtown Partnership – a group of business and property owners, downtown supporters, as well as local government – and is broad based. They see the district as a way to solve problems plaguing downtown, such as vagrants, panhandlers, trash and empty storefronts. They also see it as a way to unify and engage downtown. They say it is not uncommon for local governments to be the big property owners in downtown community benefit districts.

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. The district’s initial term is for 15 years and the assessments are expected to be $700,000, though they can increase by as much as 5 percent annually for inflation.

If the council approves forming the district, the assessments are expected to go out later this year and the services are expected to start in 2016. A nonprofit organization would be formed to manage the district.

The council meets at 5:30 p.m. in the basement chambers of Tenth Street Place, 1010 10th St.

This story was originally published August 31, 2015 at 4:07 PM with the headline "Modesto council weighs creating downtown benefit district."