HUNTINGTON BEACH : Plan for Merchants Gets Mixed Reviews

A plan to establish an independent organization to promote the downtown area drew mixed reviews from more than a dozen downtown merchants as the proposal was unveiled at this week’s City Council meeting.

Many merchants praised the proposed formation of the Huntington Beach Downtown Business Improvement District, which would represent merchants and market downtown as a distinct shopping area.

But others criticized the plan as ill-conceived and a financial burden that would impose annual fees of between $100 and $500--or higher in some cases--on merchants, many of whom run small, family-operated businesses.

A committee of downtown business leaders, who have been meeting for about a year, formally introduced the plan before the council Monday. On Jan. 21, city staff members will issue a report to the council on the proposal. A public hearing must be held before the council will decide whether to form the business district.

As proposed, the nonprofit corporation would be set up to represent about 200 merchants in an area bounded by Beach Boulevard, Pacific Coast Highway, Golden West Street and Palm Avenue. The group would be headed by a board of directors, which would organize sidewalk sales and other downtown events. It would also advertise the area to help it compete with nearby shopping centers.

The group’s operating budget for the first year is projected to be about $55,000, which would be paid by the merchants. Those fees--which opponents labeled a “tax”--would be collected by the city because only a public agency can levy formal assessments.

The annual assessments would vary, depending on the type of business, number of employees and location. For example, retailers and restaurant owners on Main Street would be charged $300 per year, or $400 per year if the business has more than 15 employees.

Critics said they consider those fees exorbitant for an organization they believe would accomplish little.

“It’s a tax, and we don’t want a tax,” said Bill Gallegos, a downtown restaurant owner. “We can do most of these things (the business district proposes) ourselves. Many of them are being done already.”

Opposing merchants are also concerned that the plan would establish an assessment that, once created, could be raised without limit.

“This is nothing but a tax that we property owners will have no say over once it’s adopted,” merchant Bob Bolan said. “I really don’t think this is the way to do it. Let the private sector handle it, and keep the city out of it.”

Proponents, however, said the business district idea is considered superior to a host of other promotional efforts the committee considered.

“I believe it will improve the overall economic environment in the downtown area,” said Richard Harlow, a downtown property owner and member of the district formation committee. “I think it’s absolutely essential that there be a downtown organization, so the city doesn’t have to deal with several hundred merchants who all have their own concerns.”

Members of the business district formation committee said that about 70 merchants have signed a petition backing the idea. But many merchants--including some whose names are included on the list--disputed its validity.

Before the public hearing is held, city officials said, a poll will be taken of the merchants within the proposed business district.