Newport Beach Restaurant Association IDB Dissolves After 25 Years of Service
After more than 25 years of service, the Newport Beach Restaurant Association Business Improvement District (BID) was officially dissolved.
It was an unexpected end to what had been a remarkable association that was formed with the aim of funding activities and programs such as Restaurant Week for the benefit of its member businesses, which encompassed any catering business within the boundaries. from the city.
The chain of events that led to the restaurant’s BID disbandment began at the Newport Beach City Council meeting on May 11. The annual renewal of the Restaurant Association’s BID was on the board’s consent schedule.
City staff recommended that Council approve and / or amend the Newport Beach Restaurant Association Business Improvement District’s Fiscal Year 2020-2021 Annual Report and its proposed budget and bylaw changes for the Newport Beach Restaurant Association. 2021-2022 fiscal year.
However, when council tabled their votes and challenges on the consent schedule, council member Will O’Neill, council member Duffy Duffield, Mayor Pro Tem Kevin Muldoon and Mayor Brad Avery filed no vote on resolution 7 – the renewal of the restaurant’s BID. . Board member Noah Blom, who owns a restaurant in Newport Beach, recused himself. Council members Diane Dixon and Joy Brenner voted Yes. The BID Restaurant renewal motion failed by a 4-2 vote.
City attorney Aaron Harp asked city council if they wanted the city to come back with a resolution to dissolve the Restaurant Association BID.
“I guess so,” replied O’Neill.
“This is the first time that anything has failed on consent without being withdrawn since I’ve been on the board,” Muldoon noted.
NBRA BID responds
On Thursday, May 20, BID President of the Newport Beach Restaurant Association, Carlos Godinez, sent an email to BID members indicating that city council had voted to dissolve the BID restaurant. In his email, Godinez asked BID members to pressure the city council to renew the NBRA’s BID at the next city council meeting on May 25.
Godinez noted in his email that “if passed to officially dissolve the NBRA on May 25, the association will be dissolved immediately, which means more restaurant weeks, more year-round marketing and more Dine. Newport Beach “.
Godinez added that “the Newport Beach Restaurant Association is vital to the fabric of our culinary community. This is the worst possible time to lose all the citywide marketing and advocacy from the restaurant industry as we move towards recovery. “
At the May 25 City Council meeting, many community members addressed City Council on behalf of the Restaurant Association, including restaurant owners, Newport Beach Chamber President and CEO Steve Rosansky, and Newport Beach & Co. President and CEO Gary Sherwin.
The restaurant owners were all in favor of keeping the Restaurant Association’s IDB one more year and believed the Association was beneficial to the Newport Beach restaurant industry.
Rosansky told city council that the Restaurant Association is very effective in marketing restaurants in the city.
“It contributes enormously to the general fund budget, restaurateurs have donated food to charities and organizations, police and firefighters. These people always give back to the community. It is the ideal public / private partnership.
Sherwin told city council restaurants face enormous challenges emerging from the financial crisis caused by the pandemic. He also mentioned that the Board wanted the Restaurant Association to move from the BID law of 1989 under which they were trained to the BID law of 1994, which has different structural rules and assessment procedures.
“The organization has agreed to initiate a strategic planning process that could initiate dialogue on the conversion as well as a number of other issues,” said Sherwin, whose organization Newport Beach & Co. helps the Restaurant Association promote its business. . “If the BID is renewed for another year, we will encourage the BID to continue on this path of conversion. “
City Council puts NBRA BID in limbo
The restaurant’s BID was not discussed by the board at the May 25 meeting, but a resolution to dissolve the restaurant’s BID was on the agenda for the June 8 city council meeting.
Board member Dixon brought forward a motion to keep the NBRA BID for one year and, meanwhile, have the reform of the BID restaurant itself under the BID Act of 1994.
“This whole problem arose when the board members decided not to support the lawsuit,” Dixon said. “There hasn’t been any public discussion, business owners come out of COVID and then we throw that over it. It is punitive, it seems unnecessary, it seems cruel, and I would like to give them 12 months to establish themselves in the formation and conversion of a new structured organization that we all wished them to embark on with the law. from 1994.
“This is neither punitive nor cruel,” replied board member O’Neill, adding that there had been a lot of discussion on the platform over the past few years about converting the BID restaurant to the 1994 law, and they failed to do so.
The Council debated the subject of dissolution for almost an hour. The discussion was sometimes lively, the advantages and disadvantages being expressed. Additional public comments from restaurant owners were heard, most in favor of retaining the restaurant’s BID.
Finally, the city council voted on the resolution. With council member Blom recusing himself, the vote was tied 3-3, with Mayor Avery with council members Dixon and Brenner voting no on the dissolution, and council members O’Neill, Muldoon and Duffield voting for the dissolution.
Due to the equality of voices, the BID restaurant was essentially in limbo, City District Attorney Harp said.
NBRA BID closes its doors
An emergency BID restaurant meeting was called on June 16, in which board chairman Godinez told the board that because they were in limbo there would be no board and that they needed a plan on how to use IDB assets.
Newport Beach & Co. senior vice president Doug McClain told the group that “we can continue the NBRA in some sort of capacity, so it doesn’t have to completely disband.”
With net assets of $ 122,035.27, McClain said the association had three options: also redistribute the assets to around 270 BID members, ask Newport Beach & Co. to use $ 40,000 of those assets to market another week of the restaurant in January and return the balance to the member. restaurants, or have Newport Beach & Co. use the entire amount to execute the Board’s already approved marketing plan to promote the restaurants for another year.
“These are options that we have come up with in partnership with the City of Newport Beach,” said McClain.
After a lively discussion among council members, a vote was taken. The majority voted for option 1 — return the money to the members.
A second motion to give the BID Restaurant intellectual assets to the city was also approved.
“Thank you all for your time and effort, I’m sure we’ll see each other again later,” Godinez said. “The meeting is adjourned. “
In an email to NB Indy after the meeting, Godinez said the BID board was concerned that the restructuring and conversion to BID under the 1994 law would mean the organization would become a 501-c entity. , which operates autonomously outside the city but still has certain privileges. Council was also deeply concerned about the process of collecting assessment of Law 94, which differed from the 1989 law under which Restaurant BID was formed.
Godinez also noted that he felt that the BID Restaurant Association board was somehow stagnating and some saw the board as being ceremonial and unproductive.
“Overall, the general consensus of the Board of Directors was that we need more participation from restaurateurs and local operators, and the BID may not be the best forum to invite creativity and participation, ”Godinez wrote. “The hope is that an association of traders emerges from the ashes of the dissolved supply. The association would focus on real-time issues for restaurants, design a new Newport Beach restaurant marketing strategy, and create a more inviting environment in which hospitality professionals can voice their ideas, raise concerns. and discuss a collective goal for restaurants in our city.