By gerrymandering boundaries to include public property, officials created enough “automatic ‘yes’ votes” to stack the deck against opponents

By Gary Walker

Even before it officially launches on New Year’s Day, seven Venice property owners have filed a lawsuit seeking to disband the controversial Venice Beach Business Improvement District.

The complaint filed on Dec. 8 in Los Angeles Superior Court accuses city officials of rigging the BID approval process — not by suppressing the votes of property owners opposed to the assessment district, but by gerrymandering district boundaries to include enough public property for L.A. City Hall to simply outvote them.

A Nov. 8 ballot among impacted Venice commercial property owners produced 99 votes in favor of the BID to 89 against, but because votes are weighted according to property size and worth — owners of larger, more valuable properties will have to pay higher annual assessments — the BID cruised to approval with 75.3% overall support.

But according to the lawsuit, BID proponents drew its boundaries to include 33 public parcels comprising 28.29% of the total weighted ownership pool. Subtract that from the 75.3% margin of victory, and the BID would have failed with just 47.01% of the ownership pool’s overall support.

Thus, the lawsuit argues, “the Venice BID’s boundaries have been improperly gerrymandered” to the advantage of a relatively small group of commercial property owners.

“The boundaries of the proposed Venice BID appear to have been drawn in a manner to disenfranchise property owners that oppose the BID,” the lawsuit reads. “With these automatic ‘yes’ votes [created by including public property], the Venice BID needed support from only roughly 22% of the weighted private property ownership. This ‘sandbagging’ is at odds with the city’s statement that ‘the process of establishing a BID is, first
and foremost, a process which must originate from and be developed by the business community itself.”

L.A. City Hall is expected to make an annual contribution of nearly $427,000 to the Venice Beach Business Improvement District for properties that include Westminster Avenue Elementary School.

“In other words, taxpayers who do not own property in the Venice BID are paying for over one quarter [28.29%] of the proposed Venice BID assessments,” the lawsuit argues.

The Venice BID’s boundaries include areas along the Venice Boardwalk, Windward Circle, Main Street and Venice Boulevard from the beach to Abbot Kinney Boulevard.

The plaintiffs in the lawsuit include Marlene and John Okulick, who own a property on Hampton Drive; Louis Traeger, who owns a property on Horizon Ave.; a land trust of 14 parcels controlled by Jean-Marie Webster;  Kevin Ragsdale, who owns a property on Innes Place; and Kendall Shaffer and Jefferson Eliot, who own a property on Westminster Avenue.

The Okulick’s and Traeger’s properties are residences that are not used for business and thus should not be assessed for the benefit of the business community, according to the lawsuit.

The Venice BID is expected to spend nearly 75% of its budget on “clean and safe” initiatives that include cleaning, maintenance and public safety patrols beyond the level of service the city currently provides.

BID opponents claim the increased private security presence on the Venice Boardwalk is a thinly veiled attempt to chase out the homeless, which BID organizers and supporters strenuously deny.

Attorneys for the plaintiffs could not be reached, and city officials are mum.

“We are viewing the litigation and have no further comment at this time,” said Rob Wilcox, a spokesman for Los Angeles City Attorney Mike Feuer.

Back in August, Feuer invalidated a previous vote by commercial property owners in favor of forming the BID after L.A. City Council members cut a public hearing short and violated due process rights of opponents who were not allowed to speak.

Other business improvement districts have been successful in winning lawsuits brought against them, but not always.

On May 10, 2013, Los Angeles Superior Court Judge Robert O’Brien disbanded the Arts District Business Improvement District in downtown Los Angeles on the grounds that it had broken state laws when it was created. The judge found that the BID had spent funds on economic development that did not provide “special benefits” for the district — one of the arguments alleged by the Venice petitioners.

The complaint against the Venice BID argues that public properties included in the BID would not derive special benefit from such BID activities as safety patrols (a general benefit) and efforts to promote shopping and dining in the area.