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Downtown owners vote for improvement district


Downtown Merced is on its way to having what is known as a Property Based Business Improvement District or “PBID” — a strategy that a majority of City Council members and local supporters believe will transform Main Street and its surroundings into the envy of other valley destinations.

Downtown property owners faced a vote over the issue through mailed ballots, and those ballots were counted at City Hall on Monday night. The result showed that 66.3 percent of the votes were in favor of the PBID creation.

With a PBID, the owners are agreeing to assess themselves a property tax that would generate a revenue stream to improve the downtown area with beautification and landscaping efforts, special events, marketing, and an ambassador program. The PBID will be managed by a governing board made up of the owners, including the City of Merced.

After the count, the City Council voted 4-2 to approve a resolution to create the PBID. Council members Jesse Ornelas and Fue Xiong voted NO.

The Council also made a series of decisions to: dissolve the Downtown Business Improvement Area, including the so-called “double-tax” that business owners currently pay on their licensing fees; reconfigure the city’s maintenance district to align with the new PBID, adjust the city budget for PBID requirements, and start an ad hoc committee process to form a PBID advisory board.

Monday night’s action by the City Council culminates a three-year effort to move the plan from idea to reality.

“I am very excited that the PBID is coming,” said Councilwoman Sarah Boyle. “I don’t know how many people have contacted me over the past three years asking why our downtown is not like Turlock’s, and then education them about that city having a PBID. Now we are getting a PBID so I’m excited to see what’s going to come in the future.”

Not everybody on the dais was excited. Council member Fue Xiong said it was a bad idea.

“We will be doing the community a disservice when we establish a PBID that we do not have control over. The city is paying 15 percent of the total assessment. That’s incorporated into the PBID. Although we’re getting a seat at the table, ultimately this will be managed by private owners. And I think that is a bad use of public funds. If there is any sort of malpractice, or whatever happens for the next five years, we cannot do anything to it. We are married to the PBID and so I think it is bad. We don’t have control.”

After Councilwoman Bertha Perez expressed some dismay over Xiong’s comments, City Manager Stephanie Dietz spoke up to clarify some PBID details for city leaders.

“The city is the fiduciary to collect those taxes,” Dietz said, “and pass them through to the PBID board. You have a seat on that board. But do you have complete control over how they allocate and spend the money? … No.”

Dietz added, “[Before this process started] there was a lot of mistrust between the city having control and the property owners not seeing the level of service that they desired. And this [the PBID] was the proposed solution.”

The PBID does NOT replace existing city services in the downtown area which will continue on the City of Merced dime. That includes: Police patrols and calls to service, tree trimming, garbage pickup, street sweeping and lighting, Bob Hart Square maintenance and infrastructure improvements, among other things.

The PBID district would take up approximately 25 square blocks of the downtown area. It is roughly bounded by 16th Street to the South, R Street to the west, 18th and 19th Streets to the north, and G Street to the east.

Annual fee assessments are expected to begin in the 2023-24 fiscal year. In its first year, the PBID budget is expected to have an estimated $426,000 in revenues, or 98 percent of the property assessments.

The PBID came at the recommendation of a former City Council subcommittee that visited three downtowns, Visalia, Turlock and Modesto.

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