Downtown Santa Monica Inc is Failing and Needs a New Charter and Leadership
Several of the Board members have serious conflicts of interest, including fervent desires for the contract to build housing in replacement for Parking Garage 3
January 24, 2022
For the first time in over a quarter century, the organization designated to manage Santa Monica's 3rd Street Promenade and Downtown, will have a new Director.
The DTSM Board and Stakeholders together, need to have an open discussion on what the actual job description should be for a replacement.
The Board should not select a search firm until there is basic agreement of the job description. During the interim, a temporary manager can oversee basic operations.
What began as a volunteer business owner organization, and later became one of the first "business improvement districts" funded by property owners, has since become a bloated quasi-City agency.
The business owners on the Promenade pay a higher percentage of assessments than other members of DTSM, yet the City selects a majority of its 13 voting Members, and the Promenade's business owners are left under-represented.
The Promenade's business owners now have less of a voice than anytime during its history.
In the January 3, 2022 list of "Business Improvement Districts" published by the LA Business Journal, DTSM is ranked # 1 for having the largest budget of any other improvement district in LA County. Its annual budget is 75% higher than the average of other districts in LA.
The "Programs and Services" DTSM told the LA Business Journal it provides are - - "Clean and safe, marketing and promotions, business development." With just that in mind, DTSM and its staff (many whom have recently quit their jobs and moved on), have failed miserably.
DTSM spends over half its annual budget on high salaries, pensions, contributions to employee life insurance premiums, travel and dining junkets, costly $300,000 studies, and a 3-tiered "Ambassador Program" that is not working.
The outrageous + - $450,000 a month that DTSM pays to an out-of-state organization, Block by Block, to manage the Hospitality, Maintenance and Safety Ambassador Programs, would be better utilized by our Police Chief and his department to fund more foot patrols and security cameras along the Promenade, alleyways and in our Garages.
In comparison, Pasadena has 3 separately-funded "business improvement districts."
Burbank has 2 business improvement districts, and within Downtown LA, there are 10 separate districts.
Each of the other districts is managed by a separate director/manager, and separate group of board members. The result is less City-involvement, more community participation, better service, and Stakeholder funds that are more wisely spent. The alleyways, sidewalks and garages are clean and safe.
The assessments paid by DTSM's business owners have become a subsidy for basic services the City should be funding from property and sales taxes.
The following are items many Stakeholders feel very strongly about - -
1) Board Members on the "search committee" should be identified. Committee members should not remain anonymous.
2) The employment terms should be shared with Stakeholders upon request.
3) The Board, in consultation with Stakeholders, should set the agenda for marketing strategy, promotion and events on the Promenade. And the Manager/Director should listen to the Stakeholders. Not the reverse.
4) Base salary should be commensurate with DTSM's budget. A base annual salary of $250,000 to $350,000 is excessive. The current CEO's annual base salary is 184% more than the average for others holding the same job position in California.
5) The initial employment term should be no longer than 3 years, and extended if there is agreement on good job performance, and if DTSM continues in its format and size.
6) Annual salary increases in the current employment contract are between 3% and 6% These amounts are too high, too frequent, and do not reflect current economic conditions.
7) If for any legitimate legal reason or transgression, the employee is fired, there should be no automatic 3-month pay-out.
8) DTSM should not pay for any employee's life insurance premium. Health insurance for general health, vision and dental are standard. But DTSM has been paying up to $11,000 a year for the CEO's personal life insurance policy.
9) 38 sick days per year, in addition to paid holidays and time off, are excessive, and far beyond what is required by state and federal law
10) DTSM's 403 (b) retirement plan for employees is burdening the organization with future debt that will take years to pay back, even after the employees move on.
11) Reimbursement for meals and personal travel and hotel stays should stop. City commissions and service organizations in Santa Monica have rules addressing this and DTSM should comply with those rules. There are also city and state ethics laws that cover this.
12) Gifts to employees, vendors and others, paid from DTSM's budget, should end.
The DTSM charter expires in several years but may be terminated sooner. Stakeholders need to evaluate if DTSM should be split up so it more fairly and efficiently represents businesses spread across the City. Businesses on the Promenade, 2nd, 4th and 5th Streets, have different concerns than businesses on Lincoln Boulevard.
1) DTSM should add two (2) non-voting Board Members, with same rights as current Members to speak and express their views during Board Meetings. One Member should represent the merchants, and the other should represent property owners. The 2 new Members should be elected by Stakeholders, not appointed by the City.
2) The organization should add committees comprised of Stakeholders and Board Members to address -
a) landscaping and common areas
c) safety concerns
d) selection criteria for street performers
e) special events
3) The Stakeholders should be given a voice in marketing and event planning on the Promenade. The new Manager/Director should adhere to that plan. Not the reverse.
4) The amount of staff should be reduced. We have Stakeholders who want to volunteer their time and be involved.
5) In addition to monthly Board Meetings, there should be regular meetings where Stakeholders can be present and speak directly with the new Director, without a 2-minute restriction on time or subject matter. No more secret meetings pitting one block of Stakeholders against another. The Director should also distribute "minutes" of the monthly Board Meetings, that reflect what was discussed and by whom.
6) Does DTSM need both an advertising firm and a PR agency, and continue paying combined fees of over $150,000 a year?
7) Selection of DTSM Board Members by the City should not be akin to presidential ambassadorships. Appointees should commit to visiting the Promenade on a frequent basis and speaking with Stakeholders.
8) The same rules that apply to appointees of City commissions should apply to DTSM Board Members. No DTSM Board Member should simultaneously occupy a seat on any other City commission.
8) No DTSM Board Member should solicit work from the City or any related agency for any project that benefits them, their companies and/or colleagues.
A BOARD MEMBER SHOULD NOT PLACE THEMSELVES IN THE POSITION OF ANY POTENTIAL INFLUENCE, FINANCIAL GAIN, OR CONFLICT OF INTEREST.
a) Current Board Chair Barry Snell does not own or operate any business in Santa Monica, but still incorrectly refers to himself as a "DTSM Stakeholder". He currently serves on the Board of Trustees for Santa Monica College and the Santa Monica-Malibu School Board.
b) Prior Board Chair and current Board Member, Rob Rader, also serves on the Board of Trustees for Santa Monica College.
c) Board Member Tara Barauskas is Executive Director of Community Housing Corp., and submitted proposals for the proposed low cost hosing and homeless development that would replace Parking Garage 3. She also voted in favor of demolishing the same Garage to make way for proposed housing she is lobbying for her firm to manage.
d) Board Member Johannes Van Tilburg is aggressively competing for his team's housing project to replace Parking Garage 3 so his firm can secure the architectural and design jobs.
THESE ARE ONLY A FEW EXAMPLES OF ONGOING CONFLICTS OF INTEREST WITHIN DTSM.
We continue to see some of our prominent retailers giving up on Santa Monica, but expanding elsewhere in LA, because they do not like the current neglect of the Promenade and Downtown Santa Monica. They watch glass storefronts smashed on a regular basis, persons living in the Garage stairwells and dumpster rooms, and damaging the elevators at night. Their customers are uncomfortable and intimidated by the anti-social behavior of the homeless on the Promenade and on the storefronts of their businesses.
Together we must work on the goal of taking meaningful steps so that the 3rd Street Promenade and surrounding Downtown once again become the most desirable, safe and clean destinations for Santa Monica residents and visitors. .
Business and Property Owner / City Supporter
Views expressed here are the opinions of the writer, and may not necessarily reflect the views of individual SMBOA (Santa Monica Bayside Owners Association) or DTSM members