December 2, 2022
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Business groups push State Street improvement

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Two influential Santa Barbara business organizations are proposing an improvement district for the city’s ailing downtown area, but some business owners have expressed reservations.

The 500 block of State Street in Santa Barbara on Jan. 12. Indoor dining was banned early in the pandemic; now businesses must often make their own decisions on mitigation. (Brooke Holland photo)

The Downtown Organization of Santa Barbara and the Santa Barbara South Coast Chamber of Commerce have proposed a Community Benefit Improvement District aimed at reversing the decline of the area, including the Funk Zone, by enhancing its safety, cleanliness and image. It would be funded by assessments on local businesses.

The area’s challenges have included excess demand for the available housing, the length of time required to obtain building permits and deteriorating built environment.

“It is our ultimate goal to restore economic vitality to downtown Santa Barbara and create a sustainable business district and destination that supports growth, vibrancy and long-term economic capabilities,” Mary Lynn Harms-Romo, a spokesperson for the Santa Barbara South Coast Chamber of Commerce said in an email interview.

But critics complain about the proposed cost and the track record of similar past efforts, such as Coast Village in Montecito.

“These districts have failed property owners in the past,” Jim Knell, chairman of SIMA Corporation, a local private real estate investment firm whose portfolio includes State Street retail locations, said in an interview. “With the closure of State Street, the city is worse now than it has ever been.”

He also maintained that the assessment proposed on local businesses “is not viable.” 

“Pushback is to be expected,” Harms-Romo said. “However, the current state of downtown is not sustainable.”

She said the district would increase tourism and boost sales tax revenues.

Proponents are proposing to hire New City America to provide security, sanitation, landscaping and marketing. The private-public partnership has provided such services to other such districts around the country. Its most recent project was Coast Village.

The proponents are continuing efforts to enlist local business owners, including through group meetings.

 “We will have many one-on-one and group conversations with property owners,” said Robin Elander, executive director of the Downtown Santa Barbara organization. “Hopefully, property owners will see the value.”