HomeMy WebLinkAboutCORRESPONDENCE - 12ANovember 16, 2020
Santa Ana City Council
City of Santa Ana
22 Civic Center Plaza
Santa Ana, CA 92701
RE: DTSA BID Renewal
Dear Members of the Santa Ana City Council:
I am writing to you as a longtime (4th generation) business and property owner in
Downtown Santa Ana, my family relocating to the area in 1919. The purpose of my
letter is to support agenda item #12A, the Resolution to Intent to Levy the 2021
Assessment for the DTSA BID. The Downtown BID has been integral in helping
manage and promote Downtown and with the current pandemic lets just say its
been a rough year and frankly the most challenging in the past 15 years 1 have
been involved in the area. As the President of Downtown Inc I can assure you
that the services the BID are providing are helping augment and support our
businesses during these unprecedented times and your support of this
resolution will help work through it. Thank you for your support.
Sincerely,
Ryan Chase
S&A Management
949-722-7400
ryanlylechase@gmail.com
Orozco, Norma
From: Victor Payan <vpayan@alumni.stanford.edu>
Sent: Tuesday, November 17, 2020 4:03 PM
To: eComment
Subject: Public Comment - Agenda Item 12A
Attachments: 2011-2012GrandJuryReportDTl.pdf
SANTA ANA CITY COUNCIL AGENDA: ITEM 12A
Adopt a Resolution of Interest to approve the 2021 Assessment Report for the SABID
Dear Mayor, City Council, and Staff,
I'm Victor Payan, a resident and artist living in the Eastside of Santa Ana.
* It's been inspiring to see the upswell of engagement among my fellow neighbors throughout this
pandemic. This quarantine has helped us all take the time to better understand the civic issues around us
that will help us succeed or fail.
Thank you for listening to us and hearing when we ask for things like the General Plan to be delayed.
Something that affects so many parts of our lives for such a long time, can't be rushed though. *
I ask today that you reconsider another part of Santa Ana that affects our economic, civic and cultural
core, the downtown BIDS, Downtown Inc and Santa Ana Business Council.
As a native of San Diego and having worked with many of San Diego's 30-plus BIDS and Economic
Development Agencies, I was real excited to engage with your setup here. Unfortunately, after a decade
of work, Downtown Santa Ana is still really struggleing and doing even worse than it was when I arrived.
How is this possible when the amount your Downtown BID raises is ten times what any of San Diego's
districts get?
Over $400,000 a year for boarded up storefronts, empty streets and a suffering economy?
On top of the ridiculous amount of money DTI and SABC already get from the BID monies, these boosters
actively siphon off significant additional funding that should be available for other Santa Ana
organizations, neighborhoods, leaders and community visions.
Downtown Inc and SABC actively work to undermine the reputation, work and opportunities of other
Santa Ana organizations, Community Advocates and City Staff. The Lead Consultants from both
organizations are known for misrepresenting themselves across Art, Culture and P1aceMaking
Communities and using their public positions for private gain.
We need that people are hired that are not at war with most of Santa Ana's homegrown, activist and
progressive community.
Since the Downtown BIDS were set up wrongfully as detailed in the attached Grand Jury Report, suffered
through severe dysfunction in its first decade and is still limping onward, why don't we take this
opportunity to curb some massive spending and review this whole situation?
Before you re -fund the BID, I ask that you:
• conduct an Audit and Investigation of Downtown Inc/SABC to determine whether they are
using City Resources and Money to benefit primarily their own board members, leadership and
associates
• recommend that a new RFP is drafted, with the input of business -owners (as opposed to
property -owners) and representatives from Santa Ana's diverse neighborhoods
• enact Conflict of interest guidelines for future BIDS so that equity is ensured with public
monies, as opposed to self -funded owner -initiatives and commercial districts
With these measures taken, I know that not only Santa Ana's downtown will benefit, but the City as a
whole. I would be happy to discuss this matter further, if you have any questions or to connect you with
my colleagues in the BID, Booster, Public Event and P1aceMaking field.
A also urge the City Council to review the Grand Jury Report, to determine if the concerns identified in it
are still in effect today.
Keep up the great work!
Sincerely,
--- Victor Payan
I have attached the 2011-2012 OC Grand Jury report section on the Santa Ana's Property -Based Improvement
District to facilitate your review.
Additionally, below is the summary of findings and recommendations from the report:
FINDINGS:
In accordance with California Penal Code §933 and §933.05, the 2011-2012 Orange County Grand Jury
requires responses from each agency affected by the Findings/Conclusions presented in this section. The
responses are to be submitted to the Presiding Judge of the Superior Court.
Based on its study of the Santa Ana Property Based Improvement District, the 2011-2012 Orange County Grand
Jury makes the following Findings/Conclusions:
F1. City of Santa Ana appears to be in violation of California State Law in the formation of this Improvement
District.
F2. Monies collected from the improvement district appear to have only benefited a few and have not resulted
in a direct benefit to the assessed property as required by California law.
F3. An appearance of impropriety exists in the relationship between the developer and the City of Santa Ana.
F4. An appearance of impropriety exists in the relationship between the developer and Downtown Inc., the
administrator of the funds from the special district.
F5. The process by which the district was established in regard to the mailing of ballots, the process
of tabulation, and the voting by the City of Santa Ana does not appear to be in compliance with the statutory
requirements for establishing an assessment on property owners.
RECOMMENDATIONS:
In accordance with California Penal Code §933 and §933.05, the 2011-2012 Orange County Grand Jury
requires responses from each agency affected by the Recommendations presented in this section. The
responses are to be submitted to the Presiding Judge of the Superior Court.
Based on its study of the Santa Ana Property Based Improvement District, the 2011-2012 Orange County Grand
Jury makes the following recommendations:
RI. The City of Santa Ana should request that its City Attorney or independent counsel conduct an investigation
into whether the City of Santa Ana complied with the requirements of establishing a formation district; whether
that district benefits all property owners proportionately; and whether there are any violations or conflicts of
interest. If so, the City of Santa Ana should immediately take action to disestablish the district.
R2. The Santa Ana City Attorney and the Orange County District Attorney should investigate the alleged
violations of election laws and procedures.
zou - zoiz
Orange County Grandjury
Final Report
Table of Contents
Final Report of 2011-2012 Orange County Grand Jury Table of Contents
Foreperson's Letter to the Presiding Judge
Citizens Watchdog Power -The Orange County Grand Jury
Orange County Grand Jury Roster
2011-2012 Orange County Grand Jury Members
2011-2012 Orange County Grand Jury Photo Gallery
History of the Grand Jury System
INVITATION — To Participate in the Orange County Grand Jury
REPORTS
"Let There Be Light," Dragging Special Districts From the Shadows............................................I
The Orange County Vector Control District, "A Study in Little Known Services"......................33
Transparency Breaking Up Compensation Fog- But Why Hide Pension Costs?..........................43
Elder Abuse: The Perfect Storm....................................................................................................85
Emergency Medical Response in Orange County
109
Can the Consumer Price Index -Urban Keep Up With OCFA Wages?.......................................117
NESI-ASCON: the Saga Continues.............................................................................................125
Inspection of Orange County Adult Detention Facilities, Part I
137
Inspection of Orange County Juvenile Detention Facilities, Part II............................................153
Sex Trafficking in Orange County
167
The Dissolution of Redevelopment: Where have We Been? What Lies Ahead?........................179
City of Santa Ana, Special Assessment District
211
ARTIC-the Anaheim Regional Transportation Intermodal Center.............................................223
Anti -Bullying Programs in Orange County Schools .....
AB 109: Public Safety Realignment: A Paradigm Change
.229
245
Use of Governmental Influence On A Private Educational Institution.......................................261
2011-2012 Orange County Grand Jury
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
CITY OF SANTA ANA
SPECIAL ASSESSMENT DISTRICT
► GFRAND JURY 2011 2012
2011/2012 ORANGE COUNTY GRAND JURY
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
CITY OF SANTA ANA
SPECIAL ASSESSMENT DISTRICT
In July of 2011, the Orange County Grand Jury received a complaint requesting that it conduct
an inquiry into the establishment of a Community Management District (CMD) in the City of
Santa Ana, Ca. Such specially established assessment districts are frequently referred to as
"Property Based Improvement Districts" or PBIDs.
After a preliminary investigation, it appeared that certain irregularities took place regarding the
election process that established the district. It was also alleged that a sufficient number of
property owners within the district objected to the process and have sought relief through a
petition to "disestablish" the district and filed a petition to do so with their elected
representatives on the Santa Ana City Council. This petition has been repeatedly re-calendared
by the Santa Ana City Council without making any definitive decisions as to the substance of the
petition. These actions or lack thereof, have prevented these petitioners from receiving their
rightful consideration.
METHODOLOGY:
The 2011-2012 Orange County Grand Jury took the following steps to investigate the citizen's
complaint letter. They:
• Compiled and read documents related to the complaint;
• Interviewed by phone and in person individuals related to the complaint;
• Interviewed city officials;
• Researched public documents relating to ethics of public officials;
• Reviewed applicable statutes and case law;
• Evaluated the compiled information; and
• Generated this report.
HISTORY:
For many years, almost from its very inception, the City of Santa Ana has had a downtown
shopping and business district known as "Fourth Street." It has a long cultural history of
Hispanic influence and atmosphere.
Approximately twenty-five (25) years ago, it came to be known as the "Fiesta Marketplace", a
reference to a business entity which began private development in the immediate area. Fiesta
Marketplace initially consisted of majority and minority partners, each of whom owned various
parcels of commercial property within the immediate vicinity of this "downtown" area. The
"Fiesta Marketplace" originated in 1985 for the purpose of the general improvement of Fourth
Street. Some of the improvements were to be financed through various funding sources
2011-2012 ORANGE COUNTY GRAND JURY Page 211
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
including the United States Department of Housing and Urban Development, as well as tax-
exempt bonds.
While the original intent appeared to be an effort to preserve the area's Hispanic and cultural
identity, subsequent efforts began to erode the very proposition that was supposed to preserve
this "redevelopment" area.
By 2006 and 2007, actions by the city and the developers were perceived as efforts to "gentrify"
the downtown area in what one newspaper reporter referred to as an "obvious effort to replace
the city's Mexican themed atmosphere with something more in keeping with a yuppie clientele."
Additional planning proposals included efforts to change the housing and business identities of
the downtown area with the addition of new apartment and condominium projects. Some
citizens saw this as a "Forced Gentrification Plan" along with other descriptions such as the
"Remove the Poor Mexicans from Downtown Santa Ana Plan." I
Under any terms or descriptions, the changes being proposed were destined to create a cultural
conflict. As explained by the city planners in the "Renaissance Plan", "The community's
heritage needs to be celebrated to express and enjoy the important aspect of daily life. Often
when communities forget their past they lose their cultural meaning and stand to seriously dilute
any future identity."2
In response to the concerns being voiced, by 2008, city officials were making promises to amend
their earlier redevelopment plans giving more consideration to the cultural history of the
downtown area.
But in 2008, the City of Santa Ana initiated a program that offered financial rebates to the
business owners in the downtown area to improve the facades of their buildings. The "Fourth
Street Fagade Program" allocated one million, two hundred and fifty thousand dollars
($1,250,000) for improvements to building fronts with a supposed limitation of $75,000 per
storefront. However, for various reasons, the money went to only three (3) property owners:
CM Theater LP (West End Theatre) .......................... $ 63,814.77
Gumm & Livingston Investments (Pacific Building)...... $110,191.00
Fiesta Marketplace Partners (S & A Properties)............ $765,000.00
The vast majority of these rebate dollars went to the same property owners/developers who
comprised the majority interest in the "Fiesta Marketplace" entity, i.e. those developers who
were the primary interests in changing the culture of the area.
These same property owners/developers have, and continue to have, extensive connections to the
newly formed non-profit business group called Downtown, Inc. As of this writing, these
developers presently serve as the officers and directors of Downtown Inc., the entity the City of
Santa Ana chose to manage the proceeds from the special assessment.
' Orange County Register, Dec. 23, 2007
2 Ibid
2011-2012 ORANGE COUNTY GRAND JURY Page 212
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
Also, in 2008, the City of Santa Ana began efforts to establish a new "CID" or Community
Improvement District for the same area.
FACTS:
In 2007, the City of Santa Ana began to review various options on how to increase revenues
available for improvements in that business district commonly referred to as "downtown."
In January of 2008, the city formed the Management District Formation Committee for the
purpose of developing a Community Management District (CMD). The committee also began
working with a consultant in an effort to define the specific area to be considered as part of any
district and to develop the actual management plan.
From June through October of 2008, the petitioning process took place.
On July 7, 2008, the City of Santa Ana City Council added Article XX to Chapter 13 of the
Municipal Code allowing for the establishment of CMDs. This ordinance differs significantly
from state law in that the ordinance set "pre -formation petitioning" at 30% of the proposed
district value while the state normally required 50%. Also, the life span of the CMD was set for
10 years while state law limits the life span to five years, with renewals of 10 year periods.
On August 5, 2008, Downtown Inc., the newly formed non-profit organization filed Articles of
Incorporation with the Secretary of State with the intention of becoming that organization which
would manage the proceeds from the new CMD. This non-profit organization had a board of
directors that consisted of the very same developers who were pursuing the developmental
changes for the downtown area.
On August 18, 2008, the Santa Ana City Council adopted Ordinance No. NS-2771..."An
Ordinance of the City Council of the City of Santa Ana Adding Article XX to Chapter 13 of the
Santa Ana Municipal Code Related to Establishment of Community Management Districts."
On August 29, 2008, the Santa Ana City Council adopted the CMD plan, and on October 6,
2008, declared its intention to go forward with the establishment of the CMD. On October 16,
2008, a notice of public hearing in this regard was issued, and a public hearing was set for
December 1, 2008.
The voting process to establish "property based improvement districts" is based upon the
assessed value of the properties and not on an individual or "one man -one vote" rule.
On December 1, 2008, the following voting tabulations were reported to the City Council. The
tabulations were reported in two ways, i.e. one including the ballots from the Town Square
Condominium project and one excluding the project:
2011-2012 ORANGE COUNTY GRAND JURY Page 213
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
Including Town Square:
In support: (31) representing $301,510 or 59.7% of total assessed value.
Opposed: (73) representing $203,556 or 40.3% of total assessed value.
Excluding Town Square:
In support (27) representing $301,252 or 60.03% of total assessed value.
Opposed (42) representing $200,558 or 39.97% of total assessed value.
A cursory review of this tabulation shows that a minority (27) of the "in support" votes
controlled a majority of the total assessed value. This became a critical issue as the district
became operational.
On December 15, 2008, the clerk of the City Council "certified" the voting results and certain
items are of significant note.
Ballots mailed: 421
Ballots returned: 107
Ballots returned from Town Square Condominium Project: 35
Ballots returned (excluding Town Square): 69
Total weighted assessment amounts of returned ballots:
All ballots: $505,066
Excluding Town Square: $501,810
These numbers are problematic in that only twenty-five percent (25%) of the ballots were
returned. This would indicate the existence of administrative problems with the procedure,
disinterest by the voters, a lack of understanding as to the ramifications of the voting, or a
combination thereof.
However, based upon these results, the City Council moved forward with a resolution to
establish the "Downtown Santa Ana CMD." On April 21, 2009, the Santa Ana City Council
authorized the execution of an agreement with Downtown Inc., the non-profit corporation.
On May 4, 2009, the Council approved a resolution to modify the original plan to change the
dates of implementation to reflect a new and different period from January 1, 2010, to December
31, 2014.
On May 18, 2009, a public hearing was conducted related to the proposed amendment to the
original plan.
On September 17, 2009, approximately 10 months after the votes were certified by the City
Clerk, Downtown, hic. sent correspondence to the property owners announcing the results of the
vote and the subsequent establishment of the CMD and in November of 2009, the first
assessments were delivered to the property owners in the newly established CMD.
2011-2012 ORANGE COUNTY GRAND JURY Page 214
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
Many of the property owners claimed they were taken by surprise at the existence of the
assessment much less the amounts. In many cases, their property taxes with the assessment
doubled and in some cases tripled. Many assessments went unpaid and many properties were
threatened with legal actions.
As more of the assessments became known, the protests from those most affected became more
vocal and louder.
On August 1, 2011, a notice for a public hearing was issued indicating the city's intent to modify
the boundaries for the downtown CMD. "Considerable dissention took place at this hearing
alleging mismanagement issues associated with Downtown Inc., and the mayor pro tem directed
staff to prepare a resolution for the "disestablishment of the PBID." A second city councilman
indicated that any modifications to the original district area is considered a new district, and cites
Proposition 218 in support of that position.
On August 24, 2011, a public hearing was held wherein numerous speakers addressed the city
council. The majority of the speakers objected to the PBID indicating that proper procedures
were not followed in its establishment, that the assessments being made did not provide a
proportional benefit as required by applicable law, and requested that the PBID be
"disestablished." Subsequent comments from city council members revealed a lack of consensus
as to what actions if any could, or should, be taken. At least three (3) of the members of the city
council agreed that certain changes had to take place, most notably in the manner in which
Downtown hie. was organized and conducting the business of administering the PBID. At this
council meeting, the council agreed to allow an amendment to the boundary of the PBID.
On September 11, 2011, the city council again met to discuss the disestablishment of the PBID.
Again, extensive discussions took place regarding the manner in which the PBID was
established, whether it should continue, a lack of transparency by Downtown Inc., and
mismanagement issues with Downtown Inc. The lack of consensus amongst the council
continued and the matter was continued until October 3, 2011.
On October 3, 2011, a resolution was introduced before the city council to disestablish the PBID
pursuant to Article XX, Chapter 13, of the Santa Ana municipal code. Multiple petitions had
been received by the city calling for the disestablishment, "specifically, the City Clerk received
fifty-six (56) signatures on petitions protesting against the existence of the CMD." The
resolution also states that "there are questions regarding the overall support for the CMD from
the remaining property owners during the vote if the City had not cast votes in support of the
CMD." Comments at this meeting included statements that fifty-nine (59) signatures requesting
disestablishment had been received, and that the proposed budget submitted by Downtown Inc.
was "substandard." The matter was again continued until November 7, 2011.
On November 7, 2011, the Mayor Pro Tem asked the city council to "clean things up." She
further stated that the council never approved the bylaws or the agreement, i.e. with Downtown
Inc. Furthermore, she stated that "State Law has a Clause for Disestablishment that was deleted
from the Resolution that approved the Santa Ana Ordinance." Three motions were made: (1) to
set a public hearing for the disestablishment of the PBID; (2) to have an advisory election
2011-2012 ORANGE COUNTY GRAND JURY Page 215
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
without the city's vote; (3) to add a process for disestablishment. All three motions died for a
lack of votes.
Fiesta Marketplace Partners owns 145,000 square feet of retail and office buildings, with
approximately 45 tenants in downtown Santa Ana. When first developed in the late 1980s,
Fiesta Marketplace was specifically oriented to Hispanic shoppers. Most recently, the area has
been renamed East End.
The 66-block special assessment district includes 312 property owners and approximately 800
businesses. Property owners have been ordered to pay assessment fees for extra security,
marketing and promotional events in the immediate area. A considerable portion of these
expenses are related to the "newer" businesses such as restaurants and nightclubs.
The developer in this matter has indicated publically that his relationship with the City of Santa
Ana was, in many instances, "informal." He further indicated that this was possible because
"city staff had a rough idea of whether the City Council would back their plans." "That's the
kind of relationship I had with them. They said something, they did it. I said something, I did
it." However, he also stated that after the allegations of "gentrification" were made, the "political
atmosphere started to turn sour, and city staff became less confident in making agreements." "It
was as if one day you could trust what staff was saying, then the next day they were scared and
couldn't commit to anything."3
In regard to many of the smaller shopkeepers the developer stated: "They're in business because
I'm propping them up. But I can't do that forever. Some of them are going to make it because
they are going to change, and others are just going to keep doing things the way they've always
done, and they will fail. A "In order for the retailer to adapt, they're going to have to figure out
what to sell and how they're going to sell it," he said.
There is significant opposition to the PBID, the procedures used in its formation, and to how
Downtown Inc. is managing the proceeds, from many area business owners. Many comments
were made in local newspapers and neighborhood publications.
One shop keeper said some of the changes taking place are hurrying the trend of Spanish-
speaking customers seeking other places to shop. "This plan should have, from the beginning,
been inclusive and gotten all the merchants together so they're not forcing anyone out but that
didn't happen," he said.
The comments from that merchant reflected the attitude of many others. "What are we paying
for? They don't do anything for us. They only care about nightlife and bringing in the wealthy,
but those people aren't going to help my business." There have been additional allegations that
the proceeds from the assessments rom "struggling property owners" are being utilized for the
3 Voice of OC, July 22, 2011
° NY Times article October 30, 2011
2011-2012 ORANGE COUNTY GRAND JURY Page 216
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
benefit of certain individuals. That merchant also stated "So many people donated their time and
money to helping the downtown and to see this infuriates me so much."
By August of 2011, the level of discord and combative rhetoric had reached a high level of
intensity. By this time, the special assessments had taken place, the actual amounts of the
moneys due were known, many had gone unpaid, and actions were being taken to collect those in
arrears. This was taking place during a time of economic distress as well.
The primary influences promoting the changes to this consistently historical area were the
developer on the one hand with resistance by the cultural traditionalists on the other, with the
latter being forced to pay for the changes which they vigorously opposed. They were being
assessed monies that were being used to change the identity of the very area that they had long
cherished.
Allegations of racism inevitably became an integral part of the dispute and further escalated the
loudness of the discussion and the intensity of the differences.
Many property owners complained that the special assessment district was illegal in its
formation, and that the promoters of the special district deliberately eliminated the
disestablishment procedure. The petitions to disestablish the assessment district were in an
amount representing numbers considerably in excess of the minimum required and have been
submitted to the City of Santa Ana.5 It is also alleged that the City of Santa Ana voted its
interest in the formation process in violation of the proper procedures established by law and that
their vote constituted 38% of the votes needed to establish the district. The results have caused,
on average, a doubling of the financial burdens on the respective properties.
Additionally, these property owners point out that the majority of the proceeds of the assessment
are being utilized in a manner that benefits a particular clientele, those related to the business
interests of the developers with little or no benefit to the majority of the property owners. They
believe that they are paying a significant surcharge on their properties that they cannot afford, for
services that are of no benefit to them or their businesses, with the result that they will be driven
out of business, and have become disenfranchised and disillusioned.
And, although numerous requests and proposals for relief were made to the Santa Ana City
Council, continuing inaction by the city council has aggravated an already serious situation.
A significant number of issues have arisen related to the procedures required to establish a
Community Improvement Districts. Many of these issues are directly related to the originating
ordinance approved by the City Council while others are related to specific provisions of the
California Government Code and the Constitution of the State of California:
"Prior to levying a new or increased assessment, or an existing assessment that is
subject to the procedures and approval process set forth in Section 4 of Article XIII D of
the California Constitution, an agency shall give notice by mail to the record owner of
each identified parcel. Each notice shall include the total amount of the proposed
5 Streets and Highway Code Section 36670(a).
2011-2012 ORANGE COUNTY GRAND JURY Page 217
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
assessment chargeable to the entire district, the amount chargeable to the record owner's
parcel, the duration of the payments, the reason for the assessment and the basis upon
which the amount of the proposed assessment was calculated, and the date, time, and
location of a public hearing on the proposed assessment. Each notice shall also include,
in a conspicuous place thereon, a summary of the procedures for the completion, return,
and tabulation of the assessment ballots required pursuant to subdivision (c), including a
statement that the assessment shall not be imposed if the ballots submitted in opposition
to the assessment exceed the ballots submitted in favor of the assessment, with ballots
weighted according to the proportional financial obligation of the affected property. "6
At the conclusion of the public hearing conducted pursuant to subdivision (d an
impartial person designated by the agency who does not have a vested interest in the
outcome of the proposed assessment (emphasis added) shall tabulate the assessment
ballots submitted, and not withdrawn, in support of or opposition to the proposed
assessment. For the purposes of this section, an impartial person includes, but is not
limited to, the clerk of the agency. If the agency uses agency personnel for the ballot
tabulation, or if the agency contracts with a vendor for the ballot tabulation and the
vendor or its affiliates participated in the research, design, engineering public
education, or promotion of the assessment, the ballots shall be unsealed and tabulated in
public view at the conclusion of the hearing so as to permit all interested persons to
meaningfully monitor the accuracy of the tabulation process.. "7
Furthermore, in 1996, the voters of the State of California passed Proposition 218 (Cal. Const.,
art. XI11 D). Considerable interpretation was given to this provision in 2008 by the courts:
"Before Proposition 218 became law, special assessment laws were generally statutory,
and the constitutional separation of powers doctrine served as a foundation for a more
deferential standard of review by the courts. But after Proposition 218 passed, an
assessment's validity, including the substantive requirements, is not a constitutional
question. There is a clear limitation however, upon the power of the Legislature to
regulate the exercise of a constitutional right. All such legislation must be subordinate to
the constitutional provision, and in furtherance of its purpose, and must not in any
particular attempt to narrow or embarrass it. Thus, a local agency acting in a legislative
capacity has no authority to exercise its discretion in a way that violates constitutional
provisions or undermines their effect. ,8
The court further states that:
"Under the plain language of Proposition 218 (Cal. Cont., art. AW D), a special
benefit must affect the assessed property in a way that is particular and distinct from its
6 California Government Code section 53753(b)
7 California Government Code section 53753 Subsection (e)(1):
Silicon Valley Taxpayers' Assn., Inc. v. Santa Clara County Open Space Authority. 44 Cal.4'" 431.
7 Ibid
8 Ibid
2011-2012 ORANGE COUNTY GRAND JURY Page 218
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
effect on other parcels and that real property in general and the public at large do not
share. "9
A "tax" can be levied without reference to peculiar benefits to particular individuals or
property. But, a special assessment, unlike a tax, must confer a special benefit upon the
property assessed beyond that conferred generally. `An assessment can be imposed only
for a "special benefit" conferred on a particular property"10. An assessment is
"invalid" if it does not comply with the special benefit and proportionality requirement
of Proposition 218, or if it fails to "directly connect any proportionate costs of and
benefits received from the permanent public improvement. "11
It has been alleged the tabulation of the ballots was not performed in a manner consistent with
requirements of the Government Code. Because the City of Santa Ana placed its interest into the
process by voting, it now had a vested interest in the outcome of the process, and thereafter used
its own clerk's office to conduct that tabulation, there is a lack of impartiality, or certainly the
appearance of one.
The language of the applicable constitutional provisions is clear and unequivocal as to its intent
as well as to when such assessments are to be allowed and the manner in which they are to be
appropriated. As stated above: "A special assessment must confer a special benefit upon the
property assessed, beyond that conferred generally." (emphasis added)
Furthermore, in light of the history of this area over the past twenty-five (25) years, the way in
which public money has been channeled to a select few, and with these select few continuing to
exercise control over the proceeds produced by this assessment district, there exist strong reasons
to suspect that appropriate procedures were not followed.
Most importantly, the actions taken by the developers, the confusion which took place in the
voting process, the failure to comply with the legal requirements relating to special assessment
districts, the difficulties associated with businesses in a period of economic limitations, and the
lack of civility in the discussions, have resulted in tumultuous circumstances at best. These
circumstances have become unmanageable and can only result in serious financial difficulties for
all concerned. The developers will be in danger of having abandoned properties as the smaller
business seek alternatives elsewhere, and those that cannot afford the change will be put out of
business. The City of Santa Ana will continue to suffer the financial drawbacks associated with
those conditions.
The City Council of Santa Ana has been placed on notice on numerous occasions as to their lack
of compliance with the legal requirements well established in California law as related to the
establishment, management, and continuance of special assessment districts. Its continuing
disregard of the concerns of the majority of the citizens being impacted by these circumstances
constitutes a disenfranchisement and disservice to its constituency. The time has long past for
the city managers and the city council to step back, reflect on what has taken place and take
11 Ibid
2011-2012 ORANGE COUNTY GRAND JURY Page 219
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
corrective actions. Continuing to ignore this matter can only result in further discourse, both
conversationally and legally, which will be detrimental to all.
FINDINGS:
In accordance with California Penal Code §933 and §933.05, the 2011-2012 Orange County
Grand Jury requires responses from each agency affected by the Findings/Conclusions presented
in this section. The responses are to be submitted to the Presiding Judge of the Superior Court.
Based on its study of the Santa Ana Property Based Improvement District, the 2011-2012
Orange County Grand Jury makes the following Findings/Conclusions:
Fl. City of Santa Ana appears to be in violation of California State Law in the formation of this
hnprovement District.
F2. Monies collected from the improvement district appear to have only benefited a few and
have not resulted in a direct benefit to the assessed property as required by California law.
F3. An appearance of impropriety exists in the relationship between the developer and the City
of Santa Ana.
F4. An appearance of impropriety exists in the relationship between the developer and
Downtown Inc., the administrator of the funds from the special district.
F5. The process by which the district was established in regard to the mailing of ballots, the
process of tabulation, and the voting by the City of Santa Ana does not appear to be in
compliance with the statutory requirements for establishing an assessment on property owners.
RECOMMENDATIONS:
In accordance with California Penal Code §933 and §933.05, the 2011-2012 Orange County
Grand Jury requires responses from each agency affected by the Recommendations presented
in this section. The responses are to be submitted to the Presiding Judge of the Superior Court.
Based on its study of the Santa Ana Property Based Improvement District, the 2011-2012
Orange County Grand Jury makes the following recommendations:
2011-2012 ORANGE COUNTY GRAND JURY Page 220
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
R1. The City of Santa Ana should request that its City Attorney or independent counsel conduct
an investigation into whether the City of Santa Ana complied with the requirements of
establishing a formation district; whether that district benefits all property owners
proportionately; and whether there are any violations or conflicts of interest. If so, the City of
Santa Ana should immediately take action to disestablish the district.
R2. The Santa Ana City Attorney and the Orange County District Attorney should investigate
the alleged violations of election laws and procedures.
REQUIREMENTS AND INSTRUCTIONS:
In accordance with California Penal Code Sections §933 and §933.05, the 2011-2012 Orange
County Grand Jury requires responses from each agency affected by the Findings/Conclusions
and Recommendations presented in this section. The responses are to be submitted to the
Presiding Judge of the Superior Court.
"Not later than 90 days after the grand jury submits a final report on the operations of
any public agency subject to its reviewing authority, the governing body of the public
agency shall comment to the presiding judge of the superior court on the findings and
recommendations pertaining to matters under the control of the governing body, and
every elected county officer or agency head for which the grand jury has responsibility
pursuant to Section §914.1 shall comment within 60 days to the presiding judge of the
superior court, with an information copy sent to the board of supervisors, on the findings
and recommendations pertaining to matters under the control of that county officer or
agency head and any agency or agencies which that officer or agency head supervises or
controls. In any city and county, the mayor shall also comment on the findings and
recommendations.
(a.)As to each Grand Jury fading, the responding person or entity shall indicate one of the
following:
(1) The respondent agrees with the finding.
(2) The respondent disagrees wholly or partially with the finding, in which case the
response shall specify the portion of the finding that is disputed and shall include an
explanation of the reasons therefore.
(b.)As to each Grand Jury recommendation, the responding person or entity shall report one of
the following actions:
(1) The recommendation has been implemented, with a summary regarding the
implemented action.
(2) The recommendation has not yet been implemented, but will be implemented in the
future, with a time frame for implementation.
(3) The recommendation requires further analysis, with an explanation and the scope and
parameters of an analysis or study, and a time frame for the matter to be prepared for
2011-2012 ORANGE COUNTY GRAND JURY Page 221
SANTA ANA'S PROPERTY BASED IMPROVEMENT DISTRICT
discussion by the officer or head of the agency or department being investigated or
reviewed, including the governing body of the public agency when applicable. This
time frame shall not exceed six months from the date of publication of the Grand Jury
report.
(4) The recommendation will not be implemented because it is not warranted or is not
warranted or is not reasonable, with an explanation therefore.
(c.) If a finding or recommendation of the Grand Jury addresses budgetary or personnel
matters of a county agency or department headed by an elected officer, both the agency or
department head and the Board of Supervisors shall respond if requested by the Grand
Jury, but the response of the Board of Supervisors shall address only those budgetary /or
personnel matters over which it has some decision making aspects of the findings or
recommendations affecting his or her agency or department.
Responses Required:
Respondent
City Council of Santa Ana
Orange County District Atty.
Findings
F1, F2, F3, F4, F5
Recommendations
Rl, R2
R2
2011-2012 ORANGE COUNTY GRAND JURY Page 222
Orozco, Norma
From:Gaby Hernandez <gabaa_46@yahoo.com>
Sent:Tuesday, November 17, 2020 7:26 PM
To:eComment
Cc:City Council; !City Clerk
Subject:Downtown Santa Ana BID re Item 12A
Hello Council members,
I am writing to stress my concern with any additional fees for business owners. During this pandemic it has been difficult
for business to survive. The local businesses in downtown were already struggling pre COVID because of the high
parking fees/citations, the never ending street car, the changes in social climate as downtown catered more to out of town
younger crowds than the typical residents/families that used to frequent Calle Cuatro. More than 80 businesses have
gone out of business in downtown Santa Ana. The BID has shown to be more of a barrier to businesses than a resource.
Mega furniture is closing its doors after many years of struggling to remain in downtown. Ask the owners how much they
owe to the BID once they close their doors? The burden of these fees on business owners follows them even after they
close their doors. Now more than ever business should be protected from additional fees.
I am asking that you cancel this BID and not extend it. It has benefited only a handful of people, mostly people from
Downtown Inc who overprice their services. The businesses in downtown have the capacity to create their own
promotions without relying on Downtown Inc or Santa Ana Business Council. The services under the BID are already
provided by city taxpayers. A couple of years back 4 police officers were assigned full time to downtown, costing the city
over a $1million, there is no need for additional security. The decision to extend the BID or approve it should come from
business owners in downtown not members of DTI or SABC who have their own agendas.
In community,
Gaby Hernandez-Castillo
1