HomeMy WebLinkAboutCOM 0183.042 2006-2008 ~-~1,
AT HONL`S REACH
6/05/07
Council Member Pilago
Council Member Ford
We applaud the effort to establish a BID for Kailua Village and can appreciate all the
hard work and long hours the committee has spent in developing this proposal. Among
the many great benefits of a BID, one of the greatest is giving government agencies one
organization to deal with that speaks for the interests of the whole district.
We aze Alii Cove Condominium Association in Zone 2 of the proposed Business
Improvement District We aze not opposed to paying a fair shaze to support the BID for
Kailua Village.
Our concern is over the way the District is being financed, and the way representation is
allocated. We also have some suggestions for possible ways of correcting the inequities
we have observed.
Chapter 35, the enabling document for the county providing for the establishment of a
BID states:
Section 35-20. Assessment apportionment.
An assessment levied pursuant to this chapter may be based on benefit received by a parcel of
land, the cost of making a supplemental service available to a parcel of land, the cost of
supplemental services and improvements benefiting a parcel of land, the stage or type of
development or use of a parcel of land, the happening of one or more specified events related to
the development or improvement of all or certain parcels of land, or any other reasonable basis
or formula as determined by the council.
We have looked at the property tax assessments for several of the paccels in the district
and feel that they do not in any way meet the requirements stated fora "reasonable basis
or formula". The size of the parcel and the tax assessment(s) aze not necessarily related to
the size of the business(s) on that pazcel, the impact on the District, or the services
required. Many of the lazgest businesses in the district in terms of revenues, physical
size, impact on services, and in terms of potential benefits received aze paying only a
fraction of their fair shaze into the District using the proposed formula. Others aze being
asked to contribute faz more than their fair shaze.
N sn I
Ref. To: ntp 2007
Ref. gate ` -
By my count there aze approximately 140 pazcels in Zone 1 of the proposed BID and
another 110 pazcels in Zone 2. Many of these pazcel owners will be paying their
assessment while representing a large number of independent businesses of varying sizes
located on those pazcels. In addition to those 250 assessments, there will be another
900+ assessments sent out to individual owners of Condominiums, but they will be
represented by less than a dozen parcels.
As currently proposed over 30% of the funding for the BID would come just from the
condominium owners. Those owners represent over 900 sepazate payers, but because
they are on so few pazcels they would get less than 12 votes total out of the 250 parcels
and over 1,100 contributors in the district.. Parcels containing several businesses such
as shopping centers would also get only one vote regazdless of the number or size of the
businesses in that center.
As and example each condominium owner at Alii Cove will pay a minimum of $100 and
there is 200 units. Alii Cove owners will pay a minimum of $20,000 That amount is
almost 20 times the amount one major restaurant in Zone 1 will pay ($1195) and about 40
times more than another ($534) also in Zone 1. Those restaurants do millions of dollazs a
yeaz in business, and serve hundreds or even thousands of customers every week.
In addition to the inequitable funding formula, I believe the voting structure is also
flawed. As individual Condominium owners paying into the district we should have a
say on a paz with others within the same zone and of the same relative size
What COULD be done to more appropriately address these issues.
Some possible funding formulas could be based on:
1. A percentage of GET paid to the State.
2. Square feet of business space.
3. Lineaz feet of street frontage.
4. Number of employees.
5. Type of business (hotel, restaurant, retail, professional, condo units, etc.)
6. All of these aze verifiable and aze based on a `per business' basis rather than `per
pazcel'.
Possible representation and voting structures for district decisions could be based on:
1. Dollars contributed.
2. Zone placement (different zones get different votes).
3. One Vote per payee.
4. One vote per Business license held.
Other possible considerations:
1. Start with a much smaller district, focusing on the core area and add new zones as
you gain experience and success.
2. Increase/decrease the number of zones to more accurately reflect the services and
benefits to be provided.
3. Neither the district nor the zones within the district have to be contiguous azeas,
there can be holes.
The BID is needed in Kailua Village and it can achieve great things. We ask the Council
to consider continuing the public comments on this proposal since it is such a lazge
undertaking that affects so many businesses and people in the District. Perhaps you can
direct the BID organizing committee to wait, go back and take another look at the
boundaries and how the funding and representation aze achieved. They can then come
back with a proposal that is more appropriate and avoids the possibility of the BID being
challenged in court in the future.
~1.r~
Keith Johnson, President
Alii Cove AOAO