La Jolla Merchants Association discusses business side of a Maintenance Assessment District (MAD)

Continuing public outreach, the steering committee behind the proposed Maintenance Assessment District (MAD) presented its plans to the La Jolla Village Merchant’s Association (LJVMA) Feb. 10, which was meeting at its new home, La Jolla Riford Library. As the trustees who currently handle Village beautification and cleanup efforts, LJVMA members discussed how a MAD might affect local businesses.

La Valencia General Manager and MAD steering committee chair Mark DiBella told the group the proposed MAD would be managed by a nonprofit organization called Enhance La Jolla, under the auspices of the La Jolla Community Foundation. The MAD would beautify and improve the Village through maintenance above what the City of San Diego can provide, and capital improvement projects. Enhance La Jolla would manage MAD funds and would contract for ongoing maintenance services for the district.

The MAD would have two areas — a business zone and a residential zone — with different frequencies of service. For example, sidewalk cleanup, graffiti removal, extra trash pickup and landscape maintenance would occur a couple of times a week in the commercial zone and a couple of times a month in the residential zone.

As the managers of La Jolla’s Business Improvement District (BID), LJVMA collects fees from businesses operating in the Village, which in turn fund LJVMA services, including business support through beautification, marketing, special events and advocacy. Hoping to take the maintenance duties off their plate so LJVMA can focus on business promotion, DiBella spoke in favor of the MAD. He said a big difference between a BID and a MAD is the source and method of funding. “A BID is funded by assessments that just go to merchants, and these funds are collected by sending out a bill,” he said. “A MAD is a property tax assessment for every property owner in that district (businesss or residential).”

In the past, LJVMA has had difficulty collecting BID fees from every merchant. In January 2014, LJVMA executive director Sheila Fortune and president Claude-Anthony Marengo put out an “all hands on deck” initiative to collect BID fees. At that time, Fortune reported several businesses were not paying their fees, so LJVMA members needed to interface with the owners to get them collected. Later that year, with the increased outreach, the number of businesses paying their fees went up.

With a MAD, DiBella said, the assessments are collected automatically. “Everyone wants to know what this will cost them,” he said, noting the exact amount for businesses would depend on the parcel size of the land on which the business sits, while resident property owners could expect to pay about $100 a year.

DiBella added that the largest parcel owner is the City of San Diego, and would likely (and happily, he said) pay about $50,000 a year. DiBella’s business, the La Valencia Hotel, is the fifth largest parcel and it would pay about $9,000 a year (or $700 a month) to the MAD.

Citing specific businesses owned by LJVMA board members, he said Warwick’s bookstore owner Nancy Warwick would pay about $700 a year, or $58 a month. LJVMA member and Monarch Arredon Contemporary gallery owner Elsie Arrendo, who is one of several tenants in her building, would pay about $104 a month, divided between the retail tenants.

Hearing this, Warwick said she sees paying MAD assessments as “an investment in our future” and expects she would “recoup the money I spent with an increase in business. I think it will make us a more competitive community.”

However, LJVMA vice-president James Niebling said he was concerned about the added cost to smaller businesses. “La Jolla is made up of boutique businesses, mom-and-pop businesses, for whom an additional fee per month on top of what they already pay in BID assessments is a lot. We need to be concerned about that. It might be a real challenge for them,” he said. Further, he questioned how the Enhance La Jolla board would engage the LJVMA, so they could work collaboratively.

DiBella explained Enhance La Jolla would have a board of directors – initially comprised of members suggested by the steering committee – who would, hopefully, have LJVMA representation. That board of directors would decide which projects and efforts get funding and how much. The board would be comprised of property owners (50 percent plus one) and interested stakeholders, such as business owners or residents. Complaints or requests for service would be reported to the Enhance La Jolla board.

Taking management cues from other MADs in San Diego, DiBella said, “One of the things I try to emphasize is that we are not creating something new. There are more than 60 MADs across San Diego. We’re banking on the fact that these are very successful (in other areas). One of the great things about a MAD is once one is formed, it allows that area to benefit from private donations. Right now, if someone wanted to donate for new benches, we couldn’t put the benches in (due to city liability laws), and we know there are a number of donors who would like to participate.”

LJVMA declined to vote for or against a MAD at the February meeting, but asked DiBella and supporters to return to the March meeting.

La Jolla Community Foundation board members have said they would like the MAD established by July 31 to allow the assessments to be available for use by Jan. 1, 2017. As early as this spring, the San Diego City Council could vote to approve a resolution of intention to form a MAD, which triggers a vote of affected property owners. Although the entirety of the 92037 ZIP code would not be eligible to vote, anyone who would be affected would receive a ballot in the mail in late spring. Ballots are weighted based on the size of property owned. The results of the vote would go to the City Council for verification in summer.

La Jolla Village Merchant’s Association next meets 3 p.m. Wednesday, March 9 at La Jolla Riford Library, 7555 Draper Ave.