Council OKs Downtown BID Fee Despite Opposition From Merchants

The Novato City Council has rejected a proposal by several merchants to suspend the annual fee levied against downtown businesses despite concerns about how the money is being spent.

For the past several weeks, Carlos Castillo, owner of a Loveable Rogue, and Steve Jordan, who owns Creekside Bakery, have been busy collecting signatures from merchants in the downtown Business Improvement District (BID) who must pay between $152 and $500 each year to the city.

The fee is mandatory and is used to promote the area by the Downtown Novato Business Association. Those who have not paid it have sometimes been referred to collections, prompting anger by some merchants, who call the fee “taxation without representation.”

There are about 400 merchants in the downtown BID. At Tuesday’s council meeting, Castillo and Jordan presented 152 signatures to the council from merchants who oppose the fee, or about 36 percent, and asked for more time to collect the rest. The council declined the request.

“Ninety four percent of the merchants we spoke to oppose the assessment,” Castillo said. “We asked for more time, just another week, since we’re just two guys trying to cover a lot of ground, but they wouldn’t give it to us. The city knows the sentiment out there and they knew we could have gotten the rest of the votes.”

Criticism of the DNBA includes spending $15,000 on a website, $20,000 on three Comcast commercials whose quality has been questioned, and vendors on the group’s marketing committee, who lobby to get contracts for their employers. About half the board is missing and meetings are poorly attended.

President Tom Atkins said he's aware of the concerns, but working hard to right the organization, recruiting new board members and collecting input into how to better market downtown.

Despite comments from merchants and the signatures, on Tuesday the council approved the assessment, but modified the Downtown Novato Business Association’s budget to include a paid, part-time executive director to oversee the group’s activities. The hope is the new hire will compile the budget, annual report and meeting minutes, which have been either absent or hard to obtain, according to Castillo.

Councilman Eric Lucan said he voted to move forward with the levy in order to not delay sending out business permits, which go out at the same time as the annual fee. However, Lucan acknowledged merchants’ concerns and the growing frustration with the DNBA.

“I don’t think it was time to throw in the towel yet, even if the past couple of years have been rough,” Lucan said. “We have an opportunity to make this better and I think it’s important for the city to work with the DNBA... This year will tell whether the concerns get addressed.”

Lucan hopes the new executive director can give the DNBA the oversight and focus it has sometimes lacked. So does Mayor Pat Eklund, who said she hopes the new hire will “rejuvenate an organization that has not been working well in recent years.”

To Castillo, moving forward with the assessment in light of what he describes as overwhelming opposition, is downright authoritarian.

“The city says all this stuff about ‘We’re listening to you’, but they’re not. If they don’t agree with you, they’re going to find a way to circumvent your opinion,” he said.

One challenge Jordan and Castillo have discovered is that the city requires any signature opposing the BID come from the owner of record, making it virtually impossible to obtain support from national chains such as Lucky, Starbucks, Peets as well as banks. However, any local branch manager can sit on the DNBA board, something Jordan says is hypocritical.

“They found a way to invite them to participate without allowing them to voice their protest,” he said.

A broader concern is the wisdom of one marketing plan that works for the many different businesses, including car repair shops, nail salons, restaurants, banks and clothing stores, that lie within the Business Improvement District.

“There are just too many competing interests and they all want different things,” Castillo said.

What do you think? If you’re a downtown merchant, do you support the downtown Business Improvement District fee? Or should businesses focus on their own marketing efforts?

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