An Orange County Grand Jury Report on the City of Santa Ana’s procedure on establishing a Community Management District (CMD), also known as a Property Based Improvement District (PBID), in the downtown is available here.
We’ll fast forward within the Grand Jury Report to its Findings:
FINDINGS (FROM ORANGE COUNTY GRAND JURY’S SANTA ANA PROPERTY BASED IMPROVEMENT DISTRICT REPORT, JUNE 28, 2012, PAGE 10):
In accordance with California Penal Code §933 and §933.05, the 2011-2012 Orange County Grand Jury requires responses from each agency affected by the Findings/Conclusions presented in this section. The responses are to be submitted to the Presiding Judge of the Superior Court.
Based on its study of the Santa Ana Property Based Improvement District, the 2011-2012 Orange County Grand Jury makes the following Findings/Conclusions:
FINDING 1. City of Santa Ana appears to be in violation of California State Law in the formation of this Improvement District.
F2. Monies collected from the improvement district appear to have only benefited a few and have not resulted in a direct benefit to the assessed property as required by California law.
F3. An appearance of impropriety exists in the relationship between the developer and the City of Santa Ana.
F4. An appearance of impropriety exists in the relationship between the developer and Downtown Inc., the administrator of the funds from the special district.
F5. The process by which the district was established in regard to the mailing of ballots, the process of tabulation, and the voting by the City of Santa Ana does not appear to be in compliance with the statutory requirements for establishing an assessment on property owners.
IMPORTANT POINTS OF THE REPORT
From the Grand Jury Report:
The city ordinance that governed the formation of the PBID differed from state law in that it required 30 percent approval of the properties in the district, with the votes weighted by assessed value. The state normally requires 50 percent. Also, the life span of the PBID was set at 10 years, while the state limits the initial span to five years, with renewals for 10 years.
Because the city of Santa Ana voted on behalf of its downtown properties in the election that formed the PBID, and then used the city clerk’s office to tabulate the vote, there is a lack of impartiality, or certainly the appearance of one.
Furthermore, in light of the history of this area over the past twenty-five (25) years, the way in which public money has been channeled to a select few, and with these select few continuing to exercise control over the proceeds produced by this assessment district, there exist strong reasons to suspect that appropriate procedures were not followed.
The LA Times chimed in on the matter too, stopping short of verifying that Santa Ana did act against State of California standards concerning the formation of a CMD / PBID.
FINAL SYNTHESIS: A CONCLUSION DRAWN FROM A FIRST HAND ACCOUNT AND THE VERIFICATION OF THE OC GRAND JURY REPORT
I have always wanted to see improvement to the downtown, but I don’t agree with all of the patterns seen in recent years there.
I’ll reiterate what I’ve said time and time again. More local people need to be business and commercial real estate owners, and not just the new-coming or those that have owned downtown property for awhile but don’t upkeep it. My argument is about empowering the local community through fostering a business mentality and entrepreneurship. Having a PBID has done nothing to help in this matter, because the focus of the PBID is not too empower the people already in place in Santa Ana, it doesn’t include them as part of the solution.
In a response to the Grand Jury Report, a representative of Downtown Inc wrote the following:
Based on our conversation, I appreciate your analysis that the City’s Rebate Program (the Fourth Street Façade Program) and the PBID’s assessments are separate issues. However, in the OC Watchdog article, the issues are lumped together. In my opinion, the Grand Jury report incorporates issues that do not pertain to Downtown Inc., i.e. the City’s Rebate Program. (Orange County Register: “Grand Jury Never Contacted Us,” June 29, 2012).
How convenient to separate two things that are entirely related, which are façade improvement and property assessments. Why is it not the task of those that administer PBID money to see what’s wrong with the picture (blighted buildings) and approach those owners to improve their properties? If it’s not their task to inform property owners, why is it not their task to proactively engage the city to enact an amendment to its municipal code to deal with blighted buildings and their owners? After all a PBID is for improving properties. Let me remind you of what the mechanism that funds you is about. It’s called a PROPERTY Based IMPROVEMENT District. What’s that you say? There is no more redevelopment money? Then another method for improving property and stimulating economic development must be included in the city’s municipal code, without stopping short of executing the powers of eminent domain.
Your jobs are to IMPROVE PROPERTY in a district. What is obvious is that “district” has been interpreted to mean only an “East End” and an “Artists Village.” Someone needs to do their homework and see what the National Register of Historic Places says about Downtown Santa Ana. The boundaries according to the National Register are in fact not promoted in their entirety. Take a page from Pasadena that doesn’t simply promote pockets of its historic downtown.
There are plenty of examples of downtown property owners that keep their buildings in terrible conditions. 410 W. Fourth street is but one example. That property owner has failed to be proactive in finding a tenant for his street level space and as a result it has become a place that is commonly trashed by Club Velvet clients, and others possibly, because of that club’s proximity. The existence of neither the PBID nor its offshoot Downtown Inc has done anything to remedy that recurring and intolerable problem at 410 W. Fourth or any other poorly-kept downtown building, therefore, Downtown Inc cannot use “cleanliness” as a reason to further its intentions.
INCONSISTENCY AND NONSENSE
Another troubling point with the PBID’s Downtown Inc is their dropping support of bringing Chivas USA to Santa Ana. At first the entity placed large banners announcing support for the club to come here, then suddenly, they pulled support due to being intimidated by a vocal minority.
A project like this is good for Santa Ana because this is the most popular sport in this town in case you didn’t know. A project like this creates jobs. A project like this is worth fighting for, which is something that Downtown Inc failed to do. This, undoubtedly, reveals that the entity and those that intimidated them are out of touch with Santa Ana. What is wrong with the fact that football / soccer is preferred by people of Mexican descent? Can anyone truly block out the sun with their finger and ignore that Santa Ana is a majority Latino town? What is wrong with expressing ourselves through art and sport?
Along these same lines, many downtown businesses do not cater to locals, and by that I mean people that have long roots in Santa Ana, that same Latino majority that has been here all along. It’s not uncommon to see many a party bus bring in people from some other part of the county. The proof is in the type of entertainment offerings at different venues ranging from the Yost to Memphis, just to give one example. A business owner might argue against my point, but even if there has been one offering here and there, they still are very far from enough, and few and far between. These entertainment offerings certainly don’t satisfy or reflect on the majority Latino population that Santa Ana is made up of. What is wrong with Spanish Pop, Rock en español, a Mexican rock band? I have yet to see the Yost as packed as when Molotov performed there. Entertainment attractions like these are a very profitable and perfect fit for Santa Ana. Anything else seems like a willful intent to not attract that profile of a Santa Ana Latino consumer and commoner. The message that is sent is that Santa Ana Latino resident money is not good enough. The solution is not to replace one group of people with another.