As Lantern Village businesses and property owners look to band together and market downtown as a vibrant destination, the Dana Point City Council voted on Tuesday, Sept. 19, to enter a service agreement as part of the next step toward forming a Community Benefit District (CBID).
Businesses had previously talked about coming together in a similar fashion as they looked to promote the burgeoning community hub, explained Max Fischer, a member of the Community Benefit District Steering Committee and owner of the Shwack restaurants.
“Now, there’s new business and new blood coming into town,” Fischer said. “There’s more synergy amongst the business owners, which I think is great. It’ll help build a strong board of directors for whenever the district is formed, so that we can spend this money responsibly.”
In September 2022, City Council approved the formation of a steering committee, and a survey was sent to all property owners in the area to gauge support of the CBID and what benefits they might be interested in, according to Dana Point Senior Management Analyst Jaimie To.
The survey showed a supportive average of 34%. Baseline support of 30% is the recommended threshold to move forward with the formation process, To said.
On Tuesday night, the council voted, 3-1-1, with Councilmember Michael Villar voting no and Councilmember Jamey Federico recusing himself, to enter into the service agreement with New City America. The six-month contract costing $51,500 will begin on Oct. 1.
New City America will begin creating a Community Benefit District Management Plan, working with the steering committee to evaluate a list of beneficial services, the benefit zone, and management of a newly formed Lantern District Dana Point Improvement Association.
The creative management plan would also outline budget and priority activities over a five-year period through input from the steering committee.
According to the staff report, New City America expects to circulate a petition for the formation of the Community Benefits District by November, seeking a minimum of 50% weighted support from property owners in the area. If the petition and subsequent vote gain enough support, the city anticipates a public hearing to count the ballots in early 2024.
If the petition fails, the contract with New City America ends there, To explained. If the petition passes, then the steering committee would work to decide who will manage the district, Assistant City Manager Kelly Reenders said.
“It’s very similar to Visit Dana Point, where they have their own separate nonprofit that they’ve formed to run it, it has its own board of directors, they hire their own staff and have their own plan to execute,” Rendeers said.
During the council meeting, property owner Terry Labourdette noted that he was on the fence about forming a Community Benefit District and hoped to learn more before making a decision.
Fischer noted that if the district is formed, he’s looking forward to seeing the Lantern Village marketed as a vibrant and successful destination.
“I really feel like there’s no downside to creating … most of the business owners can pass on the cost of the CBID through their net charge for their tenants, and I think most tenants would see the benefit of only a few cents per square foot per month going towards a greater good of creating fund of a really good amount of money that could benefit the entire district as a whole,” Fischer said. “Not just creating more business, but creating higher property values as well.”
Fischer noted that as a business owner, seeing the cost of the CBID passed on to him does not sway him against the formation of the district.
“It’s such a minimal cost for the overall value,” Fischer said.
Jason Check, President of Development and Co-CEO of Raintree Partners, said the company is in support of forming a Business Improvement District (BID), noting that “it will help promote local businesses and create new community events in the downtown area.”
“Based on my experience in working in other communities which have established BIDs (Little Italy in Downtown San Diego, Redwood City, CA) we’ve seen the additional benefits a BID can offer to a community of local property owners and businesses within a BID district designed to help promote a specific area within a City,” Check said in an email.
New City America President Marco Mandri noted that Special Benefit Districts can be more proactive, because “the city has committed to taking care of the basic infrastructure, sidewalks, trees, and street lights, so they might say, the city doesn’t normally do marketing promotion for the Lantern District, so that’s something that we would like to add into it.”
“Every district is completely different,” Mandri continued.
New City America has formed 93 CBIDs across the U.S., including Little Italy in San Diego.
Mandri noted that having formed so many districts across the country, the company has “a pretty good idea on what these districts really need, and it’s from all over the place, from the Tenderloin in San Francisco, all the way to Santa Barbara, to … Downtown Glendale.”
“It’s not only you marketing, promoting your property or marketing, promoting your business; now you have a whole collective pool in which to draw these funds from, so you can expedite the whole revitalization,” Mandri said. “You can expedite also people’s knowledge in Orange County, about the Lantern District and how it’s one of the newer districts and it’s a really great design.”
Mandri pointed to Little Italy’s growth over the past 20 years as proof that New City America has run the Special Benefit District as a success story.
“Little Italy in the mid-’90s was primarily parking lots for downtown office workers,” Mandri said. “There were about 13 Italian businesses that were left, and the businesses and property owners came together in the late 1990s and said: We need to bring back Little Italy.”
Now, Little Italy has well over 30 Italian restaurants and businesses and another 30 more non-Italian businesses, Mandri said.
“What we were able to do over the years is we understood the importance of public spaces,” Mandri said. “The Lantern District, being on the coast, has a great microclimate. You have to integrate public spaces, which are already built into the Lantern District and make it so people can sit outside and enjoy that microclimate.”
Check, a member of the steering committee, said he wanted to ensure that if the district is established, it offers “supplemental services to existing City services and will not simply serve as a financial offset to City services already in place today.”
“It is important to note that all proceeds generated from a BID will be managed by an elected group of local property owners affected by the BID property tax,” Check continued. “A BID could also help to relieve the burden of individual small businesses needing to market for themselves by pooling marketing resource for the entire BID district.”
The survey that New City America already completed showed that property and business owners highlighted marketing as their top priority from the formation of the district.
As asset manager and part owner of the property where Whitestone is located, Elizabeth Hanauer is also on the steering committee. Hanauer said the district would be a way to bolster the Lantern District.
“It would be a way for there to become a working budget from which certain things could be done to help promote this part of town,” Hanauer said. “Things like social media or maybe special décor during certain times of a year, possibly more community events to really try to attract business and customers to this part of town.”
“It’s a lot easier to do that sort of thing, to do ads, for example, or social media and events, when you have a critical mass participating versus each individual business owner trying to do things by themselves,” Hanauer continued. “You’re going to get a lot more bang for your buck if you have a critical mass.”
Hanauer noted that landlords and property owners do better when businesses do well.
“When tenants do well, they can pay rent,” Hanauer said. “But it really also goes to having a vital neighborhood. You don’t want to see shuttered buildings. … The better businesses do, the more occupied the building stays, the more improvements landlords can make to the buildings, and it becomes a self-fulfilling prophecy.”
While the cost to property owners for the CBID has not yet been determined, Hanauer noted that the costs the steering committee is looking at are minimal.
“So, in my mind, it’s well worth the cost,” Hanauer said.