With the downtown's 1969 revitalization district expiring in 2011, local schools are due to receive a bigger slice of the area's property taxes. But the city will be without its most significant source of revenue for downtown improvements — reduced from $4.7 million to $700,000 this year alone, were it to expire now.
In response to this dilemma, some of the studies will look into the possibility of new revenue from downtown parking fees and new "business improvement district" fees to help pay for downtown improvements. The city may also decide to keep the revitalization district in effect, officials said Tuesday.
While new fees could help keep up appearances downtown, some were concerned that imposing new fees on parking and on businesses would hurt downtown businesses in a recession. The motion for $625,000 in studies was opposed by council members Jac Siegel and John Inks, who worried about "unintended challenges" for downtown businesses.
"One of the advantages downtown has had over the years is it had plenty of parking and it was free," said Ellis Berns, Mountain View's economic development director.
While nothing will be decided for some time, council members said they were interested in charging for parking along major downtown streets while keeping it free in the city's parking garages.
City manager Kevin Duggan said the city may soon have a hard time paying for downtown maintenance without the revitalization district, and suggested the city also study the possibility of a downtown "maintenance district." Such districts impose taxes on property owners or businesses.
The money approved Tuesday includes a $150,000 study examining the economic feasibility of a downtown grocery store while studying the factors that support downtown grocery stores in Menlo Park, Los Altos and San Carlos. Siegel opposed it.
"I don't expect much beneficial out of this," he said. "If there were an economically viable grocery store that would be in there they would be knocking on our doors."
Council member Inks said there was "incredible pressure" to spend $6 million in remaining downtown revitalization funds as the district sunsets in 2011. Part of that money could go towards a longstanding proposal: a $1.5 million to $2 million subsidy for what some have called a "neighborhood-serving" downtown grocery store on a city-owned parking lot at Bryant and California streets.
The city could also use a sizeable portion of the $6 million to buy downtown property for future development and new city revenue, Berns said.
Council member Margaret Abe-Koga said there would be nothing wrong with not spending the $6 million and instead using it to pay off the revitalization district's debt of $25 million. That would allow local schools to receive their share of downtown property taxes sooner than 2019, which is when the city expects to have the debt paid off. (The Mountain View Whisman School District would receive 17.7 percent of the newly released property taxes, which would have amounted to $832,000 this year.) No other council member supported Abe-Koga's idea.
An entirely different view came from council member Laura Macias, who said the city should look at extending the downtown revitalization district as other cities have done — an option which would likely disappoint local school officials and parents. Other council members, including Mayor Ronit Bryant, seemed open to at least temporarily extending the district.
"I sympathize with the schools but our downtown is facing some serious problems," Bryant said, noting that the city many have to help pay for improvements for high speed rail downtown.
City officials said extending the downtown revitalization district into the future was possible and not unusual, but difficult.
"I think what I'm hearing is there's some interest in what would be involved in extending the district temporarily or long term," said city manager Kevin Duggan. "If there is, the clock is running. It could be very sensitive issue and we have to be aware of the different audiences."