How Fees are Assessed
Welcome to the Downtown Business Community
You have located your business in a Downtown Business Improvement District where your fees are used to generate revenue that is used exclusively to promote this vital core commercial area. These assessments are collected by the City of Santa Cruz and forwarded directly to the Downtown Association of Santa Cruz (DTA).
The DTA actively promotes the downtown Santa Cruz business district through marketing, social media, programs, place management, and events. The DTA sponsors many special events to attract both local and regional visitors to Downtown. The DTA coordinates common retail promotion and group advertising. The DTA also, at the direction of its Board of Directors, lobbies the City Council and its advisory bodies on issues beneficial to business owners in the District. The DTA acts as liaison between business owners and city administrative offices. The DTA has membership on the Downtown Management Corporation (DMC) board. The DMC funds Uncle Poop Pet Waste Removal and the Downtown Ambassador Program that provides a critical source of friendly customer contact to visitors on the street.
Who is Responsible for Paying the Business Improvement Assessment?
Once business operations begin in the Business Improvement District, tenants are responsible for paying the District’s assessment fees. This includes both profit and non-profit businesses. The annual fee is billed to the business semi-annually on 1/1 and 7/1. Late fees do apply.
How are Business Improvement Assessment Fees Calculated?
The business improvement assessment is calculated using a formula. This formula calculates your assessment based on your business’ square footage, type, and location in the District. The consumer price index is adjusted annually.
How do I Determine My Business Assessment Fees?
To calculate your business Improvement Assessment, find the Type Factor percentage that relates to your business. Then find the Zone Factor percentage that corresponds to your location in the District.
|Retail and Restaurant
||Type 1 = 100%
|Financial Businesses, Bars, Entertainment and Theater Uses
||Type 2 = 60%
|Wholesale Trade, Service Uses, Professional Office, Auto Dealer
||Type 3 = 40%
Formula: *See also 5.05.040 FORMULA FOR ASSESSMENT Below
(Business s.f. x CPI) x Type Factor x Zone Factor + Base Rate / 2 = Semi-annual Assessment
(1,000 s.f. x .34) x 100% x 60% + $50 = $204/2 = 102$ Semi-Annual Assessment
Fee Assessment Information:
City of Santa Cruz Municipal Code: Chapter 5.05
PARKING AND BUSINESS IMPROVEMENT AREA ZONES AND RATE OF BUSINESS PROMOTION CHARGE*
* Editor’s Note: Previous ordinances contained herein include Ords.85-55 and 85-57.
The purpose of this chapter is to generate revenue for the exclusive purpose of promoting business in the business improvement area. Revenue generated from the levy of assessments provided for in this chapter shall be used within the business improvement area and shall not be used to provide improvements or activities outside the area.
(Ord. 90-30 § 2 (part), 1990).
5.05.020 BUSINESS IMPROVEMENT AREA.
There is hereby established a parking and business improvement area designated “Parking and Business Improvement Area” within the area bounded as set forth in the diagram included in this chapter.*
* The diagram referred to in this section is on file in the office of the city clerk.
(Ord. 90-30 § 2 (part), 1990).
5.05.030 BUSINESS IMPROVEMENT ASSESSMENTS.
An assessment, which shall be in addition to any general business license tax of the city of Santa Cruz, shall be imposed upon all businesses within the business improvement area based on the degree of benefit derived by businesses in the zones comprising the improvement area. This charge will be imposed twice each year.
(Ord. 90-30 § 2 (part), 1990).
*5.05.040 FORMULA FOR ASSESSMENT.
The rate of business promotion assessment shall be imposed according to the following formula:
(a) Sq. ft. x $0.25 x CPI x TF x ZF +$50 = $ Annual Assessment.
(1) Sq. Ft. = square footage of the business (Zone 1 – 10,000 square foot maximum; Zone 2 – 10,000 square foot maximum);
(2) CPI = the annually adjusted Consumer Price Index (utilizing 1990/1991 as the base fiscal year);
(3) TF = Type Factor: Type 1 = 100% (retail and food); Type 2 = 60% (financial, bars and theaters); and Type 3 = 40% (wholesale trade, services, professions and auto dealers);
(4) ZF = Zone Factor: Zone 1 = 100%; Zone 2 = 60%.
For example, a business that has 1,000 square feet, and is a Type 1 business located in Zone 1, would calculate its formula as follows:
1,000 x $0.25 x 100% x 100% x 100% + 50.00 = $300.00
(Ord. 96-24 § 1, 1996: Ord. 90-30 § 2 (part), 1990).
5.05.050 ANNUAL CPI ADJUSTMENT.
The director of finance shall annually determine whether the CPI factor in the formula for assessment in Section 5.05.040(a)(2) requires adjustment based on changes in the San Francisco metropolitan area Consumer Price Index. Any such changes shall be reflected in the formula used to compute the assessment. (Ord. 90-30 § 2 (part), 1990).
5.05.060 BENEFIT ZONES.
The benefit zones within which the rates of business promotion assessment shall apply are as shown on the diagram following the text of this chapter. (Ord. 90-30 § 2 (part), 1990).
5.05.070 REVENUE USE.
The revenue generated from the business promotion assessment shall be used to promote business in the Business Improvement Area. (Ord. 90-30 § 2 (part), 1990).
5.05.080 BUSINESSES SUBJECT TO ASSESSMENT.
The business improvement assessment imposed by this chapter shall be levied, collected and enforced on all businesses, including those exempt from the business license tax, in the same manner, at the same time, and with the same penalties and interest charges, as the general business license tax of the city of Santa Cruz. The annual business improvement assessment imposed by this chapter is payable in two equal semiannual installments. The first fifty percent installment payment is due on or before July 1st of the subject fiscal year. The first fifty percent installment payment for FY 1996-1997 only will be due August 10, 1996 and will be delinquent after September 10, 1996. The second fifty percent installment payment is due on or before January 1st of the subject fiscal year. (Ord. 96-24 § 2, 1996: Ord. 93-34 § 1, 1993; Ord. 90-30 § 2 (part), 1990).
5.05.090 PARTIAL ASSESSMENT FOR 1990-1991 FISCAL YEAR.
Notwithstanding the provisions of Section 5.05.080, for the 1990-1991 fiscal year only, only a percentage of the total annual business improvement assessment imposed by this chapter shall be due and payable. On July 1, 1990, thirty-seven and a half percent of the total annual assessment will be due and payable. On January 1, 1990, forty-five percent of the total annual assessment will be due and payable. Commencing with the 1991-1992 fiscal year, the business improvement assessment imposed by this chapter shall be payable in full. (Ord. 90-30 § 2 (part), 1990).
Invoice Questions (amounts, penalties, late payments):
City of Santa Cruz Finance Department
Policy Questions (how promotion fees are used)
Downtown Association Of Santa Cruz