Downtown San Jose residents renew special property district

Property owners in downtown San Jose are saying yes to more taxes over the next 10 years.

Nearly 89% of residents and businesses in a special district have voted in favor of renewing the downtown property-based improvement district (PBID) tax. Collected funds contribute to services such as cleaning, security and business development. The tax ranges from $200 annually for condominium residents to $35,600 a year for owners of high-rise office buildings, with annual increases of up to 5% per year.

The tax is projected to generate $5.28 million a year—the majority of which will be spent on the cleaning, security and downtown beautification.

The San Jose City Council also approved the renewal unanimously on Tuesday.

“Thank you to the property owners, since they just voted to tax themselves,” Mayor Sam Liccardo said. “Let’s be very clear about this: These are dollars that perform very much a public purpose, but they’re private dollars. Those are dollars that property owners committed because they believe in the future of our downtown.”

The PBID is a quasi-public entity that takes money from local property owners to pay for additional services in commercial districts. It is run by the San Jose Downtown Association (SJDA) in coordination with the city. The downtown PBID was created in August 2007 and renewed again in 2012, with over 90% of property owners voting in favor of extending it.

Although downtown businesses are struggling to recover from the the COVID-19 pandemic, a majority of residents in the special district chose to renew the special tax once again.

Dan Phan, who owns Original Gravity, Paper Plane and MINIBOSS and serves on the SJDA board of directors, told San José Spotlight with downtown at a “pivotal point,” the PBID becomes even more essential.

“I know the immediate reaction with COVID is like, ‘Oh, should we be spending this kind of money?’” Phan said. “Are people able to afford it, are business owners able to afford it? These are programs that are really beneficial to a downtown that pay off in dividends in terms of trying to keep it safe and attracting new businesses.”

Cleaning up downtown

The PBID is often associated with the Groundwerx program, which hires homeless and low-income residents to clean up trash and graffiti around the city. It’s considered an essential service as blight has grown worse during the pandemic.

Phan said in several instances, Groundwerx workers have helped him wipe off graffiti and talk to unhoused people camping out in front of his businesses.

With San Jose “on the cusp of creating a downtown atmosphere,” Phan said funds from the PBID help keep the area attractive to businesses and residents.

“If you’re downtown, you see these guys cleaning the streets every day of the week, seven days a week,” Phan said. “If we didn’t have that, I think our city would be in a pretty rough patch.”

San Jose Councilmember Raul Peralez, who represents downtown, also highlighted the Groundwerx program as one of the biggest benefits of the PBID.

“The results here are a reflection of how valuable this assessment has been,” he said.

Supporting local businesses

Elizabeth Chien-Hale, who sits on the board of the San Jose Downtown Residents Association, hopes the PBID tax focuses more on economic development moving forward. Chien-Hale ran for the District 3 City Council seat in the June 7 primary.

“I hope (SJDA) will emphasize their role as a downtown development association,” Chien-Hale said. “That will focus on bringing more businesses to downtown and help existing businesses to distinguish and define themselves.”

The need to support local small businesses and fill vacant storefronts has increased, said Chloe Shipp, deputy director of the San Jose Downtown Association. With the PBID renewal, SJDA will be able to add more workers and resources.

“(This will) help small businesses through permitting processes, identifying a storefront location, adding parklets and accessing support services like grants and technical assistance,” Shipp told San José Spotlight.

Janis Gemignani, a longtime downtown resident, recalls the difference before and after the PBID was established. She has lived in the Paseo Plaza condominium complex across from San Jose State since 1997 and serves as the president of the San Jose Downtown Residents Association.

She said prior to the PBID, there was extensive littering, lots of dumpster divers and a lack of murals, paintings and decorations.

“The downtown corridor was a real mess,” she told San José Spotlight. “It’s just a real benefit to the community, and (SJDA) really represents the stakeholders.”