West Hollywood Municipal Code Ch. 5.128 West Hollywood Design District

a. The West Hollywood Design District ("district"), formerly the Avenues of Art and Design Business Improvement District, was established under the Parking and Business Improvement Area Law of 1989, California Streets and Highway Code Section 36500 et seq. ("Act"), through Ordinance No. 95-450, adopted following Resolution 95-1508 on November 6, 1995, and public hearings held on November 6 and December 4, 1995 in West Hollywood, California.

b. The city complied with all notice and hearing requirements under the Act, considered all testimony and protests regarding the district's establishment and initial assessment levy, and determined no majority protest existed per Streets and Highways Code Section 36525, justifying the district's creation.

c. The City Council finds that the public interest, convenience, and necessity support the district and that businesses within its boundaries, as defined in Section 5.128.030, benefit from improvements and activities funded by assessments detailed in Section 5.128.040, promoting economic vitality through increased visibility, pedestrian traffic, and customer patronage.

(Prior code § 6800; Ord. 95-450 § 1, 1995; Ord. 25-14, 7/7/2025)

The West Hollywood Design District ("District"), originally established as the Avenues of the Art and Design Business Improvement District pursuant to Ordinance No. 95-450 and renamed by its Advisory Board in 2013, continues to operate as a business improvement district under the Parking and Business Improvement Area Law of 1989, California Streets and Highway Code Section 36500 et seq.

(Prior code § 6802; Ord. 95-450 § 2, 1995; Ord. 25-14, 7/7/2025)

The boundaries of the district are generally described as Santa Monica Boulevard on the north, Beverly Boulevard on the south, La Cienega Boulevard on the east and Doheny Drive on the west. A list of addresses which are included in the district is included in Exhibit A of Section 5.128.090.

(Prior code § 6803; Ord. 95-450 § 3, 1995; Ord. 25-14, 7/7/2025)

a. Except where funds are otherwise available, an assessment will be levied annually to pay for all the improvements and activities to be provided within the district, commencing with fiscal year 1995-1996.

b. The method and basis of levying the assessment is set forth in Exhibit B in Section 5.128.090.

c. For purposes of the levying and collecting assessments within the district, a fiscal year shall commence on each July 1st and end on the following June 30th. The assessment levied for fiscal year 1995 — 1996 shall be for the period commencing January 1, 1996 and ending June 30, 1996 and assessment for fiscal year 1995—1996 shall be prorated with businesses within the district assessed one-half of the amount shown on Exhibit B in Section 5.128.090. The assessment for fiscal year 1995 — 1996 shall be due and payable on February 1, 1996 and shall become delinquent ninety days thereafter. Prior to February 1, 1996 and prior to each June 30th for subsequent fiscal years, the city shall provide the business owners within the district with written notice of the amount of the assessment which is owed.

d. The assessment shall be subjected to the same penalties for nonpayment as the business license tax. In addition to the penalties imposed, the assessment shall be subject to interest at the rate of one-half of one percent (0.5%) per month for each month or portion of a month that the assessment shall be delinquent on the amount of the assessment, exclusive of penalties, from the date on which the assessment first became delinquent until paid. The interest shall be computed on a monthly basis and shall not be subject to proration for any portion of a month. A payment received by mail shall be deemed received on the date shown on a postage cancellation stamp imprinted on the envelope in which the payment is received, or if payment is made by means other than through the United States mail, payment shall be deemed received on the date the payment is stamped "received" by the Director of the city's Finance Department.

e. New businesses established in the district after the effective date of this chapter shall be exempt from the levy of the assessments for fiscal year 1995 — 1996. Businesses established in the district on or after July 1st in any subsequent fiscal year shall be exempt from the assessment for that fiscal year. The transfer of a business from one owner to another shall not constitute the establishment of a new business for purposes of this chapter. No new businesses shall be exempt from the levy of the assessments for a period exceeding one year from the date the business commences operating in the district.

f. In the event a business owner disagrees with the classification assigned to his or her business, the business owner may file an application for reclassification with the Director of the city's Department of Economic Development (the "Director"). This application shall set forth with specificity the facts upon which it is based. Upon receipt of such an application, the Director shall investigate and review the matter and shall either affirm the original classification or assign a new classification and shall notify the business owner of the decision in writing. The Director may refuse to accept an application for reclassification from a business owner who has applied for reclassification within the previous twelve months if the application fails to state material and relevant facts which were not, and could not have been, presented in the previous reclassification application. The decision of the Director on an application for reclassification shall be final.

g. The amount of assessment, penalty and interest imposed by the provisions of this chapter shall be deemed a debt to the city. An action may be commenced in any court of competent jurisdiction in the name of the city for the amount of such debt. The conviction and punishment of any person for failure to comply with the provisions of this chapter shall not relieve such person from paying any assessment, penalty or interest due and unpaid at the time of such conviction nor shall payment prevent prosecution of a violation of any of the provisions of this chapter. All remedies shall be cumulative, and the use of one or more remedies by the city to enforce this chapter shall not bar the use of any other remedy.

h. Any business owner within the district may apply for a waiver of penalties and/or interest accrued due to late payment of assessments if the debt has not been forwarded to a collections agency and the following circumstances apply: (1) internal billing error by the City of West Hollywood, including incorrect category, incorrect amount, or incorrect mailing address; or (2) this is the business's first delinquency on payment of an assessment within the last three years. An assessment invoice will be sent to a collections agency at one hundred twenty days past due with all applicable penalties and/or interest. Applications for a waiver must be submitted in writing to the City Manager or their designee within fifteen business days from the date of the penalty notice. The application must include a detailed explanation of the circumstances leading to the delinquency, supported by relevant documentation or any evidence pertinent to the justification of the request. The City Manager or their designee will review the application and issue a written decision within twenty business days of receipt. The City Manager or their designee will consider whether there is good cause for the waiver or errors in assessment processing, as applicable in this Section 5.128.040. The decision will be communicated to the business owner via email at the email address provided by the business owner and on file with the city. The amount determined to be due shall be paid within ten business days following the date that the decision is emailed. Any amount due post-waiver must be paid as specified or further penalties will accrue. All penalties and interest will be retained by the City of West Hollywood. For delinquent assessments that have been forwarded to a collection agency, the district will receive the assessment amount paid minus any collection agency fees. Any waiver granted under this subsection does not exempt business owners from compliance with all other sections of this Chapter 5.128.

(Prior code § 6804; Ord. 95-450 § 4, 1995; Ord. 25-14, 7/7/2025)

There is created a special fund designated as the "West Hollywood Design District Fund" into which all revenue derived from assessments levied pursuant to this chapter shall be placed, and such funds shall be used only for the purposes specified in this chapter. This fund shall be subject to an annual independent audit.

(Prior code § 68055; Ord. 95-450 § 5, 1995; Ord. 25-14, 7/7/2025)

Revenues derived from the system of charges shall be used to promote the West Hollywood Design District as a vibrant and unique shopping and dining destination. The city shall allocate the revenue generated under the provisions of this chapter to an organization selected by the city to provide the service. Such organization shall be required to use the revenue as follows:

a. Promotion of public events which benefit businesses in the district and which take place on or in public places within the district; and

b. Activities and improvements which benefit businesses located and operating in the district.

(Prior code § 6806; Ord. 95-450 § 6, 1995; Ord. 25-14, 7/7/2025)

The city may contract with a separate private agency to administer the improvements and activities described in Section 5.128.060. Any agency that holds the funds in trust for purposes related to the contract shall, at no expense to the city, provide an annual independent report by a certified public accountant of these funds. The audit may be funded from assessment proceeds as part of the general administration of the district. At all times the city shall reserve full rights of accounting of these funds.

(Prior code § 6807; Ord. 95-450 § 7, 1995; Ord. 25-14, 7/7/2025)

Businesses within the district established by this chapter shall be subject to any amendments to the Parking and Business Improvement Area Law of 1989, California Streets and Highways Code Section 36500 et seq.

(Prior code § 6808; Ord. 95-450 § 8, 1995; Ord. 25-14, 7/7/2025)

EXHIBIT A – Boundaries

The boundaries of the West Hollywood Design District include the following addresses:

EXHIBIT B – Assessment Structure

The assessment formula is designed to generate income from the businesses within the boundaries of the assessment area. Assessments are a combination of a base assessment (based on business category) and a sliding scale assessment (based on categories of annual gross sales using the prior year's gross sales). Those businesses which receive the most benefit from the activities and improvements pay a higher assessment than those businesses which will receive less benefit from the activities. In addition, those businesses that have higher annual gross sales will pay a higher assessment than businesses with lower annual gross sales. New businesses will only have to pay the base assessment for their category. They will not be assessed based on their gross sales for their first year in operation.

BUSINESS CATEGORIES

Businesses within the boundaries of the district have been classified into six categories.

CATEGORY 1 BUSINESSES represent those businesses that will serve as the "destination" points for visitors to the West Hollywood Design District. These businesses will receive the most benefit from the activities and improvements which are geared toward bringing people into the area to shop and dine. Businesses in this category include, but are not limited to:

Antique Shops, Bakeries, Bars, Bookstores, Coffee Houses, Delis, Clothing Stores,

Electronic Stores, Florist, Gift Shops, Jewelry Stores, Carpet & Rug Stores, Restaurants, Design Showrooms (retail).

CATEGORY 2 BUSINESSES are not necessarily destination businesses, but will derive significant benefit from the activities and improvements which are designed to bring people into the area to shop and dine and secondarily to conduct personal businesses. Businesses in this category include, but are not limited to:

Art Galleries, Barber Shops, Banks, Beauty Salons, Gyms, Interior Designers/Decorators, Laundry/Cleaners, Liquor Stores, Parking Management Companies, Pet Stores, Pharmacies, Photo Developing, Photography Studios, Print and Copy Stores, Professional Schools, Shoe Repair, Tailors, Travel Agents.

CATEGORY 3 BUSINESSES will derive moderate benefit from the activities and improvements because by making the area a vibrant and unique shopping and dining destination, more people will be in the general area doing business. In addition many of these businesses cater to other businesses located in the area. Businesses in this category include, but are not limited to:

Architects, Attorneys, Bookkeeper/Accountant/CPA, Corporate Headquarters, Grocery Stores, Financial Consultants, Hardware Stores, Insurance, Manufacturers, Public Relations, Real Estate Brokers, Showrooms open to wholesale trade only, Talent Agencies, general office uses.

CATEGORY 4 BUSINESSES consist of owner/operators who will derive nominal benefit from the activities and improvements because by making the area a vibrant and unique shopping and dining destination, more people will be in the general area doing business. Owner/operators will benefit from these activities and improvements on a smaller scale than larger establishments. Businesses in this category include, but are not limited to:

Personal service owner/operator without Employees.

CATEGORY 5 BUSINESSES include businesses that will not receive benefit from the activities and improvements and therefore will be exempt from the assessment. Business in this category include, but are not limited to:

Medical-related professionals who are mainly in the area because of its proximity to Cedars Sinai Hospital. They derive business because the hospital is a well-known health service institution and they do not identify with the West Hollywood Design District.

Pacific Design Center - The businesses within the PDC benefit from their own marketing, promotion and identity campaign.

Non-Profit Organizations, and Governmental agencies and other businesses including property management firms, pet hospitals, pharmacies and veterinarians that will not receive benefit from the activities and improvements.

CATEGORY 6 BUSINESSES include the management or owners of malls, marketplaces and other tenant-based businesses that are marketing and promoted collectively. Such malls and marketplaces as a whole receive benefit from programs promoting WHDD as a destination for both "to-the-trade" and retail customers. Management/owners of such businesses are able to promote to tenants their participation in West Hollywood Design District as a value-added benefited. Businesses in this category include, but are not limited to:

No businesses in this category.

ASSESSMENT FORMULA

In addition to the base fee discussed above, businesses in Categories 1 and 2 will be assessed an additional amount based on their annual gross sales. Businesses that have larger annual gross sales will be assessed more than businesses that have smaller annual gross sales. Businesses in Category 1 with $100,000 or less in gross sales will not be assessed an additional amount. Businesses in Category 2 with $ 100,000 in gross sales or less will not be assessed an additional amount.

CATEGORY 1 BUSINESSES

CATEGORY 2 BUSINESSES

CATEGORY 3 BUSINESSES

CATEGORY 4 BUSINESSES

CATEGORY 5 BUSINESSES

CATEGORY 6 BUSINESSES

Ord. 95-450 § 8, 1995; Ord. 25-14, 7/7/2025