Calling Out Absentee Landlords of State Street

Will Owners Agree to Tax Themselves to Save Santa Barbara’s Downtown?

Oscar Gutierrez | Credit: Ingrid Bostrom

WORMWOOD AND GALL: Props to Oscar Gutierrez, Santa Barbara’s increasingly ubiquitous city councilmember, for injecting some much-needed Groucho Marx into this Tuesday’s council deliberations. “Oscar,” as he is known by everyone, has recently achieved memehood status on social media, eclipsing such exuberant local exhibitionists as news and radio reporter John Palminteri, Teresa Kuskey — one of the fishnet foxes from the La Boheme dance troupe — and Father Larry of the Old Mission, now Santa Barbara’s undisputed Party-Animal-in-Chief.

Groucho Marx | Credit: Wikimedia Commons

The council was discussing the latest plan to save downtown Santa Barbara from its long-paralyzed torpor. On the table was an eons-overdue proposal asking downtown’s landed gentry — the mysterious cabal of investors who actually own State Street — to voluntarily agree to tax themselves to the tune of $2.2 million a year to clean up the streets, program events, provide security, and promote downtown as a place otherwise sentient creatures might want to spend their time and money.

To those inclined to see this as a part of some vast communist conspiracy, Coast Village Road, a festering hotbed of trust-fund Bolsheviks, has such a tax, as well as Ventura and hundreds of other cities throughout the state.

In this context, Oscar could easily have dusted off President John F. Kennedy’s hoary old line about asking “not what your country can do for you, but what you can do for your country.”

Instead, Oscar quoted Groucho’s famous line about “not wanting to belong to any club that would accept me as a member.” According to Groucho, he quit the famous Friars Club just three weeks after joining because he didn’t cotton to the company of barbers and dentists.

Oscar directed this line directly at Jim Knell of SIMA Corporation, by far the biggest single commercial real estate mogul in all of downtown. Knell has been intractable in his opposition to the plan to create what’s known as a Community Benefit Improvement District — or CBID — ever since the idea was hatched about 18 months ago.

Real estate mogul Jim Knell | Credit: Paul Wellman (file)

Knell is a thoughtful dude despite an unfortunate penchant for expressing himself in all capital letters and exclamation points. He was exclaiming up a storm this Tuesday, denouncing the CBID as if it were the brainchild of the other Marx, the one whose first name begins with “K.” The CBID, he charged “takes ownership of my property and puts it in the hands of a collective.” For good measure, he added, “This is a collective that’s destined to fail. … You’re trying to take my property rights away!”

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!???????????

For the proposed CBID to pass, it must “garner” — a word, by the way, never used in actual human conversation — 50 percent of the votes of all the downtown property owners from Highway 101 to Sola Street and from Chapala to Anacapa.

But it’s not one owner, one vote. Votes are apportioned based on how much property one owns. And no one owns more than Knell. Given how hard it’s been for CBID advocates to marshal the 30 percent required to trigger such an election — and they only had 29.06 percent going into Tuesday’s council meeting — Knell’s opposition matters a great deal.

As Santa Barbara tries to figure out what to do with a downtown that’s functionally defunct, the collective disengagement by all but a few owners has been conspicuously glaring.

In fact, the biggest challenge confronted by CBID advocates has been trying to pierce the veil of secrecy surrounding the identities of the large number of absentee landlords. Family trusts and limited liability corporations — in other words, absentee landlords — own too large a percentage of downtown to be economically healthy. It’s not just greed; it’s the indifference; it’s the disengagement.

Empty storefronts? Who ya gonna call? It’s hard to do when you don’t even have a name.

I want the owners engaged because absolutely nothing creative can happen downtown without their energetic buy-in. I want the owners involved because some — like Peter Lewis, now building about 80 units of rental housing by State and Gutierrez streets — are smart, creative people. Lastly, I want the owners involved because it’s flat-out stupid that they haven’t been.

For years, they’ve been angrily demanding City Hall do more about dirty sidewalks, dirty streets, and dirty people. Civil liberties issues aside, City Hall doesn’t have the money. In fact, City Hall is now facing a $9 million budget deficit — it’s thinking of putting a sales tax increase on the November ballot.

The Downtown Organization — long charged with street cleaning, beautification, and promotions — operates with a budget of only $250,000 a year. You do the math. The CBID, if approved, would generate 10 times that amount.

Could there be problems? CBID dues ain’t cheap; the assessment for the Balboa Building by State and De la Guerra will be $23,000. Rents will go up. And as Mayor Randy Rowse noted with all his buzz-kill prescience, the prospect of private security squads patrolling State Street could give him the heebie-jeebies.

City Hall owns 19 properties in the CBID zone, which allowed the council to weigh in with its vote — 8.5 percent — thus dragging the CBID across the 30 percent finish line. Whether it can get to the 50-percent-plus one needed to pass this June could be up to Jim Knell. Having exhausted his Groucho Marx quotes, Oscar — a former high school football star — was forced to resort to sports metaphors. “Play ball,” he implored Knell. “Be a team player.”

In the meantime, we’re left hoping Knell will want to belong to a club that wants him as a member.