Merchants Pushing City to Take Closer Look at Downtown Business Association

A group of merchants is trying to get the city to take a closer look at the Downtown Novato Business Association, a group they say is plagued by cronyism, lack of transparency and a revolving door of board members that does little to help businesses.

The DNBA was created in 1999 as a way to encourage visits to the town’s center through advertising and special events. In turn, the close to 400 businesses located in the Business Improvement District, or BID, pay between $158 and $525 a year for the service, depending on how many employees they have. 

The fees generate an estimated $50,000 each year. The organization also makes money with special events such as Nostalgia Days and the annual holiday tree lighting, all of which give it an annual income of around $75,000.

But despite the guaranteed stream of cash, some businesses say the group is dysfunctional, with half the seats on the board vacant following a string of departures, financial reports seldom shared with members, and vendors on the marketing committee. 

The annual report, due at the last meeting, has yet to be presented to the members, casting further suspicion on what’s going on behind closed doors.

“There’s a leadership problem with the organization,” said Carlos Castillo, owner of Loveable Rogue bookstore on Grant Avenue, who's spearheading a drive to collect signatures from at least 51 percent of merchants to freeze fees in 2014. 

“The group is in disarray. The city needs to suspend collecting the assessment and get the board in order first," he said.

Questionable Transactions

Other concerns include a $12,000 annual fee paid to a vendor to manage the group’s website, and $20,000 spent on the production and airtime of three Comcast commercials, which Castillo and some others say were “terrible.” 

Another is a $5,000 survey the group wants to conduct to ask merchants about how happy they are with the Downtown Novato Business Association.

“We don’t have confidence in the people running that group,” said Steve Jordan, co-owner of Creekside Bakery who organized a similar effort to halt fees several years ago, but could not get enough signatures. 

“When I don’t get regular reports, I get edgy. Just in the same way I’d get edgy if my bank stopped sending me statements…. We worked hard to make this a viable organization and it’s losing that credibility.”

Deals for Friends?

Tom Atkins, who became the president of the Downtown Novato Business Association in September after former president Darren Pomponio stepped down, said he’s trying to make improvements.

“I’m all for transparency, that’s one of my big issues while I’m president,” said Atkin, who owns AE Video and Web Designs and has been involved with the DNBA for 16 years,. “There are a number of things, procedural issues, and I want to lead our committees to fix this stuff.”

Atkin defended the three vendors on the group’s marketing committee, employees of Comcast, San Francisco Chronicle and Solvatech, a Novato-based web hosting and design company, each of which has contracts with the group.

“We’ve always had vendors on the marketing committee,” he said. “The committee has the best marketing people any downtown could ever ask for. They’re in touch with what’s going on and can get us great deals.”

Solvatech, owned by Martin and Susan Fisher, received $12,000 year to manage the group’s website, which they created from WordPress, a content management system that doesn’t require coding.

Atkin said the company also writes content on a regular basis, blogs and has even started building a local business directory.

“Susan has done a great job. They built the site to our specifications. She also went door to door building out our member database. We couldn’t be happier,” he said, adding that the website has received more than 9,000 unique visitors this year.

Regardless, the contract should not be going to someone on the marketing committee who is also a member of the Novato Chamber of Commerce, Castillo and others say.

“It’s completely unethical,” said Castillo.

Asked about DNBA’s $20,000 commercials on Comcast, Atkin said two spots have aired more than 1,400 times on a variety of channels including CNN, the History Channel, ESPN, NBC and numerous others. These were organized by Heather Elliott, a Chronicle ad rep who sits on the DNBA's Marketing Committee.

Despite Efforts, Little Impact

The association has also purchased ads in the Chronicle and Marin Independent Journal, but despite these efforts, some merchants say they haven’t felt the impact. Others have even gone as far to say that they’d rather spend the money on their own marketing than pay a fee to the Business Improvement District.

“People don’t shop by Googling “Downtown Business Association,” said Jan Morris, who owns Morris and Company, a gift store on Grant Avenue. “They look for specific products or brands. I’ve only had one person say they saw an ad on Comcast.”

To this criticism, Atkin said it’s not the DNBA’s role to bring visitors into specific stores, just downtown Novato.

“It’s up to the businesses to do their own marketing to bring people into their own store,” he said.

Asked about what kind of oversight the city has of the organization, Cathy Capriola, Novato’s Assistant City Manager said that the group has always been able to show their expenditures to date as well as reserves. The annual report is then reviewed by the City Council and approved, allowing funds to be released.

Castillo and others say the review of the report is not thorough.

"They pretty much just rubber stamp it every year," he said.

The NDBA’s annual report is scheduled to be reviewed by City Council on October 22. The council will then vote on the document at the November 12 meeting. It can also call for an audit of the organization's books, although it never has.

Michael Frank, the city manager, said the complaints about the DNBA are not new and anyone who is unhappy with the organization should get involved.

“The city has not received any written correspondence that there are issues, but it seems that these come up every year,” he said. “It’s a volunteer organization and the people doing it change from year to year."

To Jordan, Castillo and other critics, these words are dismissive of the what they describe as deep problems within the organization.

“These people should have an understanding of what they’re doing if they’re stepping up to positions of leadership,” Jordan said. “We’re being asked to invest in a program that we don’t see any benefit from. There is absolutely zero benefit to us."

If you're a downtown business, are you happy with the job the DNBA is doing? If not, what would you like to see them do? Share your thoughts in the comments below.