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Santa Rosa business leaders moved one step closer Tuesday to being able to tax themselves to pay for a higher level of public services downtown.

The City Council unanimously passed an ordinance allowing for the creation of so-called community benefit districts anywhere in the city where property owners want to assess themselves to fund neighborhood improvements.

Funding for downtown ambassadors, improved landscaping and promotional events downtown have all been suggested as possible ways the funds might be spent.

The upgrades could theoretically happen anywhere in the city, but the initiative has been spearheaded by property owners who want to make sure the recently unified Old Courthouse Square is maintained and managed in ways that capitalize on the project’s long-touted benefits for downtown revitalization.

Peter Rumble, the executive director of the Santa Rosa Metro Chamber of Commerce, said his organization is in “extreme support” of the measure, viewing it as “the centerpiece for the vitality and growth of downtown,” including additional mixed-use projects and housing.

He stressed, however, that the downtown was not the only part of the city that could benefit from such districts.

“While there is a primary focus on downtown, this opens the door to other investment in our city across the board,” Rumble said.

The business leaders have been pushing for such a district since before the $10.5 million reunification project was even completed. They formed a nonprofit group last year called the Downtown Action Organization hoping to move quickly to raise money to maintain the square when it was completed.

The city hired a consultant to help it navigate the complexities of forming assessment districts, which added time to the process. The consultant stressed the flexibility of benefit districts, but the city needed to change its code to allow them, which took more time than expected.

Downtown business leaders including the chamber urged the council earlier this year to keep the downtown a top city priority, and it has remained so.

Developer Hugh Futrell, who rehabilitated the former AT&T building and is leading a project to transform the iconic Empire Building into a boutique hotel, said he was pleased by the support.

“The vote reflects the council’s commitment to downtown, so those of us making investments in downtown are very appreciative,” Futrell said following the meeting.

Futrell and others have long bemoaned what they see as the city’s unwillingness to maintain, police and promote downtown in a way that would make it more attractive as a destination not only to tourists but to residents as well.

How the city and the nonprofit board would orchestrate the additional services remains to be seen, and that uncertainty has been an area of friction in the past. Rumble stressed that the money raised by the district would be “additive” to existing city services.

It’s not yet clear exactly how much money would be raised. The chamber still has to formally ask the council to hold a vote among downtown property owners, at which point more information will be available. Rumble said he hoped to have the organization running by July.

The chamber’s initial idea was for property owners to be separated into three zones. Those closest to the square would pay the premium rate, those more than a couple of blocks away would pay a lower, standard rate, while the Santa Rosa Plaza, because it already provides security and landscaping services, would have a lower, supplemental rate.

The district would only assess property owners, not businesses. This is a key difference from previous downtown districts. The last one, called Santa Rosa Main Street, failed in part because of complaints and infighting among different types of merchants and property owners.

Those still may arise. For example, the owner of an office building leased to professionals who don’t rely on visitor traffic might feel differently about paying higher taxes than, say, a building with a Mary’s Pizza Shack as a key tenant.

A version of a related idea put forth by the chamber — instituting a “code of conduct” downtown to help police address certain behaviors associated with the homeless — was previously passed by the council.

The city in August increased the penalties for certain nuisance behavior from infractions to misdemeanors.

In addition to downtown, interest has been expressed in possibly initiating such benefit districts in Railroad Square or Roseland, said Raissa de la Rosa, the city’s economic development manager.

Editor’s Note: The story has been updated to reflect that downtown business leaders formed the Downtown Action Organization.

You can reach Staff Writer Kevin McCallum at 707-521-5207. or kevin.mccallum@pressdemocrat.com.

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