Quick Take:
With a big post-pandemic resurgence underway, the Downtown Association of Santa Cruz wants to hike by nearly 15% what district businesses pay to help support cleaning, safety services, the Downtown Ambassador program and more. A hearing before the city council is set for Sept. 26; if passed, the increase — the first in three decades — would go into effect in January.
As downtown Santa Cruz continues to recover from the economic impacts of the pandemic, the nonprofit organization that represents downtown businesses is asking for its first assessment hike in 30 years to help support a post-pandemic rebound in downtown foot traffic.
Businesses within the downtown district currently pay an assessment fee of 47 cents per square foot. That fee has remained flat for three decades; now, the Downtown Association is asking to up it to 54 cents — an increase of nearly 15%. These fees (divided into two payments annually) are collected by the city but are sent directly to the Downtown Association to pay for everything from marketing to cleaning and safety services, according to executive director Jorian Wilkins.
The fee was approved by the city council Sept. 12; a public hearing will be held on the matter Sept. 26 (more on that below). If it passes, the enhanced fee would go into effect for billing in January.
“Downtown is experiencing a resurgence,” Oswald Restaurant owner Damani Thomas and The Penny Ice Creamery co-owner Zach Davis, the Downtown Association’s board chair and vice chair, respectively, wrote in a letter to the organization’s members. “According to credit card data, spending in our district has rebounded by a notable 104% as of spring 2023, compared to the pre-pandemic year of 2019.”
The directors said this rebound is a “testament to the resilience of our community and the support of your customers.” Wilkins also noted that more businesses have now opened downtown than closed during the pandemic, with over 30 new businesses opening since 2022.
These fees help pay for things like the Downtown Ambassador program, cleaning and safety services — in addition to marketing efforts aimed at bringing more consumers downtown and programs such as Downtown Dollars, which are essentially like gift cards that can be used at participating businesses.
Teams cleaned up over 8,000 pieces of litter, addressed almost 700 instances of graffiti and cleaned garbage cans 825 times last year. A total of 12,614 “hospitality interactions” — ambassadors chatting with visitors downtown, visits to the information kiosk and the like — were logged in 2022 and there were 20% more information requests at the downtown information kiosk, according to the Downtown Association. With more foot traffic anticipated in the coming months and years, these numbers are expected to grow in tandem — requiring more funds to support these efforts.
With more foot traffic anticipated in the coming months and years, these numbers are expected to grow in tandem, requiring more funds to support the association’s efforts, said Wilkins, pointing to the number of new mixed-use development projects currently underway downtown.
“It’s exciting times around here,” she said.
How the fees are assessed: The annual fee for each downtown business is assessed based upon several factors, including building square footage, business type and business zone, plus a base fee of $100, according to Rebecca Unitt, economic development manager for the City of Santa Cruz.
There are four business types: retail/food/lodging, financial/bars, nonprofit/theaters and wholesale/trade/services/professions/auto dealers. The downtown area is divided into two zones; Zone 1 encompasses most of Pacific Avenue and parts of Front Street between Water Street and Soquel Avenue, explained Unitt. Zone 2 generally encompasses other streets that intersect or parallel Pacific Avenue.
In other words, a business that comprises 1,000 square feet and is a retail or food business on Pacific Avenue (type 1 in Zone 1, which is on the higher end of the scale) would pay $640 per year to the Downtown Association if the proposal is passed, according to the report filed with the city council.
Next steps: At the hearing on Sept. 26 at 1 p.m., the city council will consider any qualified written ballot in favor or in opposition that is filed with the city clerk prior to the meeting. Each ballot must contain a description of the business in which the person protesting the increased assessment fee has an ownership interest in. To submit a ballot in writing, deliver it in person or mail it to the Santa Cruz City Clerk at 809 Center St., Santa Cruz 95060.
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