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Managing Change: Bayside Takes Steps to Change How Downtown is Run

By Jorge Casuso

March 14 -- When consultant Brad Segal kicked off a process to change the way Downtown is managed and raises funds to address its most pressing problems, he wasn’t holding his breath. On a scale from 1 (“a lost cause”) to 10 (“this might certainly work”) Segal initially rated the chance of success at 3.

But during the past seven months, as stakeholders weighed in on the issues they wanted the new management to tackle and Bayside officials rolled up their sleeves and began crafting the recommendations they will make to the City Council this month, Segal has grown more optimistic.

Last month, after the board decided to present a management structure that balances the power of the City Council, which currently appoints all 11 Bayside Board members, with that of the private sector, Segal’s optimism has risen to a “6 or 7.”

“The fact we can frame these issues and get an outcome is a major accomplishment, (since) some of this is so emotionally charged,” said Segal, a consultant for Denver-based Progressive Urban Management Associates (PUMA). “If you had wagered that a year ago, I’d say you’re smoking and inhaling.

“We seem to be moving towards common ground,” Segal said. “I’m cautiously optimistic that we’ll get something done. This should signal to the property owners that change is on the way. We can’t completely privatize it (the Promenade) or take it from the public sector. So, that they came to a compromise is huge.”

While the key stakeholders – the property owners, businesses, residents and civic officials – all agree on the major goals for the Downtown, Bayside officials must now decide how those goals will be reached.

A draft report prepared by PUMA and Kristin Lowell Inc. that was released in early February proposes the following series of new initiatives:

• A “clean and safe” program that merges resources and operating principles from both the public and private sectors to boost maintenance and features an ambassador program that would provide additional “eyes and ears” for police.

• A new homeless initiative that offers a “proactive, balanced and compassionate approach” to reducing the number of people living on the streets.

• A renewed commitment to implement the Downtown Parking Strategic Plan, which would add 1,712 spaces over the next ten years at an estimated cost of $180 million.

Expanded marketing and promotional efforts, special projects to reduce congestion by promoting alternative modes of transportation and capital improvements that could be implemented in five years.

The proposed framework would give Bayside “a stronger oversight role for maintaining programs,” according to the draft report, in addition to increased funds to reinvest in parking and greater ability to participate in future capital improvements.

In order to raise the needed funding, the owners of the 350 property parcels in the expanded Downtown Business Improvement District (PBID) will have to agree to be assessed under a proposed “property-based model.” And property owners have not always seen eye to eye with public officials, Segal said.

“Some private leaders see Downtown as a real estate asset and want to maximize their profits,” he said. “Some City leaders see it as an asset tied to the psyche of the community. They see it as the community living room. This is Santa Monica. This is the alter ego of Santa Monica. This is where we gather. This is how we’re reflected to the rest of the world.

“In reality, it’s both. The question is, ‘Can we find a middle ground?’” said Segal.

Looking Ahead

Refusing to subscribe to the adage that “if it’s not broken, don’t fix it,” Bayside and City officials decided last year that it was time to step back and reevaluate the management structure and needs of Downtown.

The decision came nearly two decades after a boarded-up street that shut after dark was transformed into one of the most wildly successful shopping venues in the country. With the Third Street Promenade and its surrounding streets facing increased competition and showing signs of age, it seemed a good time to act.

To gauge the major concerns, Bayside sought input from more than 1,400 Downtown stakeholders and received 175 responses. Participants engaged in roundtable forums, responded to a direct mail survey and shared views in one-on-one discussions. Further, more than 800 residents and visitors were surveyed by telephone and on the Promenade.

“The response was the same across the board,” said Kathleen Rawson, executive director of the Bayside District. “Everyone wants Downtown to be clean and safe, efforts focused on reduction of homeless and less traffic and parking issues.

“We don’t want to let it get to the point where it’s broken,” Rawson said. “Cities don’t normally do that. They let things take their course.”

On February 15, Bayside Board members began discussing the findings of the PUMA report and crafting some of the key recommendations they will make to the council on March 17 that will shape how Downtown will be run for years to come.

The board’s first, and perhaps key, recommendation will be to allow the private sector to determine the makeup of half of the new Bayside Board that will be in charge of new assessments to boost safety and maintenance Downtown.

The board also voted to recommend that the boundaries of the Downtown Business Improvement District be expanded and that restaurants, offices, hotels and, perhaps, multi-family residences pay assessments based on the benefits they derive from the enhanced services. In the past, only retail businesses have paid assessments.

After an extended debate, the board opted to recommend a model of governance similar to that used by the Santa Monica Convention and Visitors Bureau – half of whose members are appointed by the council and half by the Chamber of Commerce, with one seat held by the City Manager.

The recommendation came after property owners said they would be reluctant to pay new assessments unless they were given more power to appoint board members. The board is one of the few in the country chosen entirely by the public sector.

“The property owners who are going to pay have said loud and clear that they are not going to pay unless they have a role in the process that is not at the mercy of the council,” said Board member John Warfel.

Before voting to recommend the CVB model, the board rejected an alternative model used in Boulder, Colorado, that calls for the council to appoint board members from a list of nominees provided by the private sector.

Council member Ken Genser, liaison to the Bayside Board, warned that he could not support the model, which he called “a political nightmare.”

“I think it’s really essential that the City maintain control of its public streets,” Genser said. “If property owners put together a slate, that’s going to be a very political process.”

Some Downtown officials supported a motion to strike an equal balance on the board of property owners, businesses and residents, “who have to be a big part of this,” said Board member John Warfel. “My concern is that any group have too much influence,” he said.

While the motion failed, Genser said he is confident the mix will evolve naturally. “The council looks at the best person to fill the slot at the time,” Genser said. If you mandate the makeup, he added, you “get a weaker board.”

The board also unanimously voted to recommend expanding the boundaries of the Downtown Business Improvement District. The proposed boundaries are the east side of Ocean Avenue, the east side of 7th Street, the north side of Wilshire Boulevard and the 10 Freeway.

The new boundaries will include half a dozen hotels, a stretch of high-end restaurants overlooking Palisades Park and several dozen new apartment buildings along 5th, 6th and 7th streets. “We’re looking at offices, we’re looking at hotels, we’re looking at people who haven’t paid in the past,” Rawson said.

The proposed district would generate between $1.4 million and $2.1 million per year, compared with the $217,000 in current assessments paid by retail stores within the narrower boundaries of the existing district. Under the recommendation, the current assessments would be scrapped.

The board also will recommend that the rate of the assessments be based both on the kind of use and the benefits derived from the services. Still, the new assessments, which must by approved by the council, as well as by those assessed, will be “miniscule ... versus the value and rent of these properties,” said Robert O. York, a consultant for the Bayside District.

More Direct Accountability

To gain the support of the property owners, Bayside officials must come up with a way of holding the City accountable for the assessments, including crafting guidelines for the services their dollars will provide. This became the key point when the board recommended nearly doubling the cleaning budget at its meeting last month.

Boosting the current $770,000 maintenance budget by between $500,000 and $750,000 was one of the key recommendations approved by the board. But who will clean the Third Street Promenade and surrounding streets still is up for debate.

Downtown officials argued that the stakeholders who will pay for the expanded services in the form of new assessments need to have a way of making sure the job – which will either be contracted out or performed by City workers – gets done.

“I think the maintenance issue is absolutely critical,” said York. “If there isn’t some kind of objective criteria, I’m not sure this is going to make people happy or achieve the goal.”

Some of Downtown’s major property owners – including Macerich Co., which owns Santa Monica Place – support boosting maintenance and security.

“We feel that the success of the Promenade is important to the success of the new Santa Monica Place,” said Randy Brant, Macerich’s senior vice president for development and leasing, who is in charge of the mall’s proposed redesign.

“The maintenance and security of Third Street are not up to the level we think they should be,” Brant said. “Anything that is done to better Third Street and Downtown Santa Monica is good for all of us.”

“It must be crystal-clear what they are expected to provide, and it must be agreed upon in writing,” said Rawson.

In order to make sure maintenance is adequate, consultants have suggested crafting a services agreement that specifies the frequency of services, the hours of operation and the equipment that is used.

Maintenance also requires oversight that could include weekly conferences between Bayside and City officials and, perhaps, a grading system.

“There must be some accountability that the job is done well,” said Bill Tucker, a Bayside Board member who owns property on the Promenade.

But it is unclear what the Bayside officials could do if the City fails to follow through on its end of the bargain.

“What’s the hammer? What’s the consequence?” Rawson asked. “It doesn’t matter who does it. It matters that it gets done.

“We have to change it from a subjective review to an objective review,” Rawson added.
“They need to provide the service, period.”

“We need enhanced maintenance, and it must be accountable,” said Warfel. “Accountability is nothing if there are no consequences.”

City officials are confident the job – which will be directly under a newly created post in charge of maintenance citywide – will get done.

“You can’t cross the line of saying you can fire the City,” Council member Genser said.
“But you shouldn’t need to do that.”

Other Key Issues

The Bayside Board next month must hammer out a list of remaining recommendations to take to the council. Key among them is an ambassador program that would “serve a multitude of functions,” according to the draft report.

Dressed in “informal yet distinctive uniforms,” such as polo shirts, khakis and hats, the ambassadors would provide a “concierge” service for visitors, “assist police to discourage nuisance crimes” and “work with social service providers to connect support services to street populations.” They also would monitor the restrooms.

The program – which would cost an estimated $500,000 in new property assessments – would put between eight and ten ambassadors on the street.

Another key proposal made by consultants mirrors the recommendations made by the Washington-based Urban Institute in its report on the homeless for the City.

The proposal calls for:

• A homeless outreach team that includes two professional social workers that meet daily with the homeless to bring them into the City’s expansive network of services. The team would work with the ambassadors.
• A job placement program through the “clean & safe” initiative that would offer work opportunities to homeless individuals, who would be encouraged to participate in treatment and housing initiatives.
• A connection to the Homeless Community Court that allows those charged with misdemeanors, such as aggressive panhandling and other nuisance crimes, to participate in services rather than serve jail time.

Other key proposals include supporting a strategic plan approved by the council in 2002 to replace and retrofit the six Downtown public parking structures and build new structures.

The proposal could include directing income from Downtown parking structures back into their upkeep, rather than into the City’s general fund, and increasing property assessments to bankroll future parking improvement bonds.

If the City Council buys into the Bayside Board’s general recommendations this month, it might take three months to draft a plan, another three months to launch a petition drive to garner property owner approval and then three more months to get final council approval.

If all goes well, by year end, Bayside could be on the path to a new future, Downtown officials said.

“You as a visitor Downtown will notice the difference,” Rawson said. “That’s our goal. The average person will be able to touch and physically see the difference. Otherwise, there’s no reason to do it.”

“It would be so much cleaner, so much more improved,” Segal said. “It would be sparkling. The city would love it. You would absolutely see and smell and experience it. We need to shine the diamond.”


“We don’t want to let it get to the point where it’s broken.” Kathleen Rawson


“The property owners who are going to pay have said loud and clear that they are not going to pay unless they have a role in the process that is not at the mercy of the council.” John Warfel



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