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Funding of business district cop at stake in renewal vote

Officer Jeff Schouten, right, stands outside Starbucks in the Marketplace at Birdcage, accompanied by Sgt. James Evans. // Mike Hazlip

Sentinel staff report–
The executive director of the largest business district in Citrus Heights is warning of potentially “catastrophic” impacts if an upcoming vote goes the wrong way.

The Sunrise MarketPlace is made up of 400-plus businesses in the Sunrise-Greenback commercial corridor and was formed as a Property and Business Improvement District (PBID) in 1999. The district plays a supportive and marketing role for businesses, along with hosting events and most recently hiring a dedicated patrol officer to increase security in the district.

Funding for the district comes from a property tax assessment paid by each of the roughly 80 property owners in the district, rather than being paid directly by business owners or coming from the city’s General Fund. Similar to a homeowners association, each property owner helps fund the PBID and likewise has a say in how that money will be spent to benefit their specific area.

The arrangement has made PBIDs increasingly popular among cities as a way to enhance commercial areas while not raising taxes on residents. However, property owners can be harder to convince, as it means increased taxes on their properties, which can also be passed down in the form of increased rent for the businesses occupying the properties.

In order for the tax to be levied, a majority of property owners in the district have to vote in favor of paying the assessment, with renewal votes historically coming up every five to seven years. Property owners are being asked to renew again this year for a three-year term, otherwise the Sunrise MarketPlace PBID will expire on Dec. 31, 2021.

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“With the city proposing cuts to police and other city services, Sunrise MarketPlace is more important than ever,” said the district’s executive director, Kathilynn Carpenter, referencing the city’s budgetary troubles. “I sincerely believe that if we do not renew, it could be catastrophic to the area.”

“Our banners and holiday décor (would) come down. The lights on the palm trees will be removed. We own the Santa Set and Tree at Sunrise Mall, this would be sold along with all assets,” Carpenter said in an email to The Sentinel. “There will be much fewer special events and no district-wide marketing, advocacy or economic development. Our business support would go away.”

She also highlighted last year’s decision for the district to contract with the city to receive a dedicated patrol officer at an annual cost of approximately $177,000, paid for with district funds. Officer Jeff Schouten was chosen for the role, and began working in the area full time last May.

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Carpenter said the district has seen an overall drop of 28% in persons crimes and 33% in property crimes, in comparing 2020 crime with 2019. She also said the officer has worked with businesses to clean up graffiti and vandalism, along with assisting in trespassing incidents.

A police lieutenant told The Sentinel last year that the pandemic played a factor in the crime drop reported in the Sunrise MarketPlace, but credited the dedicated patrol officer as a significant factor in reducing crime. Carpenter said the dedicated patrol would be discontinued at the end of this year without funding, and said the city isn’t in a position to “backfill” funds.

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City spokeswoman Nichole Baxter said in an email last week that the city “is in full, enthusiastic support of the PBID renewal,” crediting the district with supporting businesses and serving the community with events. However, the city and the Sunrise MarketPlace (SMP) board have had some disagreement in recent months over the latest renewal.

Public records of meeting minutes requested and obtained by The Sentinel for the December meeting of the district’s PBID renewal steering committee indicate disagreement between board members and the city over how long the renewal term should be, and whether SMP should be named as the party charged with managing the business district.

The board’s interest was for a longer 10-year renewal term in the interest of certainty, while the city’s interest was to see flexibility with a shorter term. Minutes indicate a compromise was set for a three-year renewal term, with SMP named as the Owners Association.

Carpenter said the board wanted to see a longer term, noting the costs associated with renewing being around $100,000, plus staff time. Baxter said a “three year renewal term allows the district’s business community the ability to make important decisions as progress happens at the Sunrise Mall site,” noting the city’s plan to revitalize the 100-acre mall property.

How much is the tax?
The property tax assessment for the proposed three-year term is based on the square footage of the property. For retail, the assessment would be a little over 6 cents per square foot ($0.0669) and for office it would be a little over 3 cents per square foot ($0.0369).

If the PBID is renewed, the assessment is anticipated to raise about $850,000 per year, with an additional $45,000 coming in from events, grants and other sources.

What’s Next?
The Sunrise MarketPlace is currently in the process of reaching out to property owners in the district to receive petitions in support of renewal. Petitions must be received from property owners paying a combined total of more than 50% of the assessment.

If enough petitions are received by the end of April, the city would then send out an official ballot to every property owner in the district. If there are more “yes” votes than “no” votes, weighted by assessed value, the PBID will be renewed. That vote must be completed by mid-July, in time to send assessment data to the county, Carpenter said.

As of the end of February, the executive director said $162,000 worth of petitions had been received, well-short of the approximately $440,000 needed. According to a visual on SMP’s website, that number has since increased to about $205,000.

Carpenter said it can be difficult securing petitions from landlords who don’t live or work in the district. In personally been reaching out to property owners, she said it often means “you’re talking to an asset manager out of state.”

The renewal this year was anticipated to be more difficult due to the pandemic’s negative impact on businesses, but Carpenter noted the PBID successfully renewed during the Great Recession a little over a decade ago. She remains optimistic for another renewal this year.

“Probably our police officer will make the difference; because having the full-time, on-duty officer has made a big difference,” she said.

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