Sausalito advances plan for business district

A pedestrian walks by shops along Bridgeway in Sausalito, Calif. on Monday, June 10, 2024. (Alan Dep/Marin Independent Journal)

Sausalito will move forward with creating a property business improvement district.

In a 4-1 vote on June 4, the City Council approved a resolution of intent to establish the entity. The vote also initiates mail-in balloting, the next step in the process. The city, which owns around half of the parcels, will contribute 50% to the district.

The decision comes during the city’s budget process. Sausalito’s budget is strained because of rising pension payments and the city’s loss of its insurance provider.

“This model, a public-private partnership, allows the people in the trenches to operate nimbly, quickly, with local knowledge, local control, to benefit themselves.” Mayor Ian Sobieski said. “The incentive is aligned and when they benefit themselves they benefit the city by filling our parking lots.”

The city-owned parking lots are fairly empty in the off-season, and the proposed district could help bring more business to the area year round.

Councilmember Jill Hoffman voted against the resolution because of budget concerns. She said she wanted to pause the issue until after the city solidified its budget. The creation of the district could cost the city about $650,000 over the first five years.

“The really disturbing thing is the financial analysis we were given,” Hoffman said. “We should be looking at this in the context of our total budget. This just doesn’t fit into our priorities.”

Business improvement districts provide extra services that are not offered by the city and are funded by annual assessments. They usually give more autonomy to business owners to make aesthetic changes and encourage tourism. They are often managed by nonprofit stakeholder groups.

The district would have two benefit zones. Zone one would include the core commercial area along the west side of Bridgeway with the most retail and restaurants, and zone two would include the city parking lots on the east side of Bridgeway and Humboldt Street.

Brandon Phipps, director of the city’s Community Development Department, said the district would result in a $156,000 net increase in revenue for the city because of transient occupancy taxes, parking fees and sales taxes. However, Phipps said if the city reduces its spending on things that the district could take over — like marketing, light programs, website management and maintenance — net gains to the city could be upwards of $624,000 over the first five years of the district.

“As indicated by and in this financial projection, the formation of the downtown Sausalito business improvement district will result in a positive financial return to the city,” Phipps said.

After the City Council approved a draft plan for the district in March, the city sent a petition to non-city property owners within the district’s boundary. Phipps said only one of the 27 respondents was in opposition.

“This is good news,” Phipps said. “The results of the petition are positive. They indicate that the city has received more than sufficient levels of support to adopt a resolution of support to form the PBID.”

Councilmember Janelle Kellman pointed out that 20 property owners did not reply to the petition. She asked what attempts have been made to engage those who have not replied.

“That seems to be a significant lack of interest in the program,” Kellman said. “That’s of concern, I would think.”

Phipps said a lack of replies does not necessarily mean there is a lack of interest, but did admit there have been challenges in reaching out to property owners because of time constraints. The item must be listed on the November ballot in order to begin district operation by the new year.

“People are hard to reach, and we don’t have their contact information,” Phipps said.

Scott Thornburg, the chair of the Economic Development Advisory Committee, said the business community is committed to the vitality of the city and wants to do more. He added that the district will provide the city with a “dramatic” increase in revenue.

“It’s a first-of-its-kind program for Sausalito,” Thornburg said. “It’s a test, it’s a creative solution to a real challenge.”

A City Council public hearing on the district is tentatively scheduled for July 30.