Members of the Greater Golden Hill Community Development Corporation recently discovered a ruse that might help them overcome opposition to assessing their fellow citizens nearly $489,000 in increased taxes. Heretofore the development corporation has not been able to muster enough support from property owners to bring the matter to a vote. Thirty percent of owners in the proposed district are needed. But Scott Kessler, deputy director of San Diego's Economic Development Division, is now saying that the interest of 30 percent of the citizens is not required for a vote to go forward. That's because the development corporation, he says, didn't apply for City money to help the process get started.
What the private, nonprofit development corporation wants is a "maintenance assessment district," a device that has become popular in recent years to finance local community improvements. Under California law, a maintenance assessment district (MAD) must confer special benefits on its citizens' real property above and beyond the general benefits the City already provides. Examples might be several trash pickups per month beyond regular trash collection or putting streetlights in dark neighborhoods.
According to retired attorney Hal Tyvoll, who was on the development corporation's board in 2000, the effort to establish a maintenance assessment district in Greater Golden Hill began back then. The area includes Golden Hill, South Park, Brooklyn Heights, Orange Park, Morse, Seaman, and Choates. "The organizing center at that time," Tyvoll tells me, "was the 25th Street and 28th Street corridors in Golden Hill, especially where they cross Broadway. The services they wanted were more appropriately provided by a 'business improvement district,' though they weren't using that term. The problem they had, however, was that the businesses in the area didn't want to pay for the services. So [the development corporation] looked for ways to expand the revenue base outward."
Tyvoll shows me the development corporation's meeting minutes from July 26, 2000. Its chairman was none other than Golden Hill resident Scott Kessler, and one of its board members was Golden Hill businessman Rob Fanella, the organization's current chairman. A subcommittee had the responsibility of studying the maintenance assessment district. The subcommittee, called the Golden Hill Commercial Revitalization and Economic Development, seemed devoted to economic interests in Golden Hill exclusively.
The meeting minutes show that members discussed "the Proposal for Organization of Golden Hill Property Owners into a Community Maintenance Assessment District submitted by Marco LiMandri of New City America." LiMandri was a consultant to the group. His company, New City America, specializes in setting up business improvement districts and maintenance assessment districts.
The biggest problem the development corporation was facing that night was how to raise enough money to proceed. The meeting minutes record the following: "Everyone felt that the proposed district should include the entire [Greater Golden Hill] Planning Area as it was unlikely there was enough mass to fund a MAD without including all the households in Golden Hill."
Eventually, in 2002, the development corporation sent out a survey to the over 3500 Greater Golden Hill property owners to see how many would support the maintenance assessment district. The positive response was approximately 14 percent, nowhere near the 30 percent the City requires. And that was the end of the effort -- for the time being.
"In the meantime," claims Tyvoll, "Marco LiMandri managed to insinuate himself into the legislative process." Tyvoll shows me a September 30, 2002 letter LiMandri wrote to a City Land Use and Housing Committee criticizing the limitations of maintenance assessment districts. Legislation governing them, wrote LiMandri, "is not responsive to the growing needs of San Diego. The Maintenance Assessment District ordinance adopted by the City Council in 1998 does not provide for the funding of...economic development or marketing and promotional activities....
"The one group that is geared to coordinate such activities, the City's [Business Improvement District Council], does not make provision for property owners' inclusion in their membership....
"Finally, BIDs...only assess business license holders." At the end of his letter, LiMandri indicated several sources for his thinking. "I took [some of my] wording," he wrote, "from the existing BID legislation and [property-based] BID legislation from the Streets and Highway Codes."
Tyvoll maintains that reasoning like LiMandri's subtly pushes maintenance assessment districts, which are intended to help neighborhoods, toward improving local business, the goal of business improvement districts. In fact, the San Diego Municipal Code discussion of maintenance assessment districts, amended less than eight months after LiMandri wrote his letter, urges that the understanding of maintenance "improvements be interpreted liberally."
The current appearance of the maintenance assessment district initiative in Greater Golden Hill began in April with a new property-owner survey. The results were almost identical to the first survey -- about a 14 percent positive response. But in May, District Eight councilman Ben Hueso gave the development corporation $45,000 in federal community development block grant funds to get the maintenance assessment district effort off the ground. Unlike the start-up funds loaned by the City for such projects, these monies do not have to be paid back.
Among the benefits that the new district would provide are high-pressure washing of sidewalks, daily graffiti cleanup, removing large abandoned items from the community, landscaping along streets, cleaning up canyons, placing and emptying trash cans on major streets, and providing community banners and street signage.
A number of these items, says Hal Tyvoll, do not qualify as benefits to real property. "They may, incidentally, increase property values," he says, "but that's not a goal of maintenance assessment districts. The problem we have is that not even city officials seem to understand the difference between maintenance assessment districts and business improvement districts. By California law, the two are totally different animals. Take community banners, for instance. They would be appropriately provided by a business improvement district, since that mechanism is a more open-ended way to generally enhance the business climate of an area. And it is not bound by the requirement to provide special benefits to real property. In the Greater Golden Hill plan, however, the two types of district are being mixed up."