Marlene and John Okulick have lived for more than 20 years in their loft-style duplex on Hampton Drive a few blocks east of the Venice boardwalk and have loved it.

But this year, the Okulicks’ property tax bill is set to jump by 50 percent, thanks to the newly formed Venice Beach Business Improvement District.

“We’re not merchants and this is not a blighted area,” Marlene Okulick said. “We shouldn’t even be in the BID at all – it was intended for the Venice boardwalk.”

Okulick, a real estate agent, and her husband, a sculptor, might do much of their work at their duplex, but to them, it’s first and foremost a home, not a business requiring the additional security guards, sidewalk sweepers, and marketing efforts the BID is designed to provide. They certainly don’t want to pony up an additional $4,407 in property assessments annually for at least the next five years for these services.

The Okulicks are the lead plaintiffs in a lawsuit filed last month in Los Angeles Superior Court seeking to block implementation of the Business Improvement District and the property assessments that go with it. They want the boundaries redrawn to exclude residences such as theirs and the whole district put to another vote of property owners.

The case is set for a hearing in early March before Judge James Chalfant.

BID consultant Tara Devine, who helped draw up the Venice Beach BID boundaries, said state law dictates that only properties zoned primarily or exclusively residential are excluded from a business improvement district. All other properties – including the Okulicks’, which is zoned “commercial: live-work” – must be included in district assessments.

“The law is quite clear: The zoning is what determines eligibility for inclusion in the BID, not the actual use of that property,” Devine said.

The newest of the 43 business improvement districts in the city of Los Angeles, the Venice Beach BID launched on Jan. 1 after nearly two years of debate and a successful petition and vote last year. It includes 460 parcels spread out over roughly 80 blocks from the main drag of the Venice boardwalk extending east to Abbot Kinney Boulevard, north to the Santa Monica city boundary, and south to Venice Boulevard.

Even as the Venice Beach Business Improvement District officially joins the roster of L.A. BIDs this month, four more districts are trying to form, including two in east Hollywood.

The Hollywood-Western BID would take in about 200 parcels in the area bounded by the Hollywood freeway and Western Avenue on the west, Sunset Boulevard on the north, Edgemont Street on the east, and Santa Monica Boulevard on the south, according to Jeff Zarrinnam, chief executive of the Hollywood Hotel, who is serving as property owner representative for both BIDs trying to form in east Hollywood.

Zarrinnam said that proposed BID is now trying to obtain petition signatures from a majority of property owners, as weighted by square footage and street frontage, within the boundaries; so far, about a third have signed the petition. If they achieve majority status, then a formal BID plan will be taken to the council and then put to a vote of the property owners.

A proposal for a Hollywood-Route 66 BID along Santa Monica Boulevard in east Hollywood is at a more preliminary stage, Zarrinnam said. A BID consultant has yet to be hired to draw up the boundaries, determine assessment levels, and spell out services that would be provided.

– Howard Fine

BID assessments are determined using a formula of total square footage combined with public frontage space. The Venice Beach BID’s annual assessments range from a few hundred dollars for a smaller property to as much as $30,000 for a major hotel. The city of Los Angeles is the BID’s largest single stakeholder, with 24 properties in the district, and will pay about $400,000.

The district is expected to collect more than $1.8 million annually and will be up for a renewal vote in 2021.

Expanded presence

The BID takes in some Silicon Beach tech businesses, including several properties leased by Snap Inc. and the famed Frank Gehry-designed Binoculars Building now home to Google Inc.

“We need additional security and we need clean-up crews,” Mark Sokol, co-owner of the Erwin Hotel, just yards from the boardwalk, told the Los Angeles City Council’s economic development committee in the summer. “We need to supplement the insufficient resources we get from the city.”

But to include properties such as the Binoculars Building, the district boundaries had to be drawn to include some properties whose primary use is residential.

The Okulicks and seven other plaintiffs say they are residents, not businesses, and don’t want to be taxed as commercial properties are in a business improvement district.

“Their primary concern is that they have no connection to the retail business community that wants the BID and they want no part in that BID,” said Geoffrey Stover, an attorney with downtown law firm Steinbrecher & Span who is representing the plaintiffs.

Stover also represented a challenge that forced the downtown Arts District BID to disband in 2013. That case was won on procedural grounds, he said. This one deals more with the substantive issue of which properties should be subject to assessments and which shouldn’t, an issue that appears not to have been litigated previously in Los Angeles.

The Okulicks’ assessment, at $4,407 a year, is especially high because their duplex sits on a street corner, giving it a large amount of “frontage space” along public rights of way. BID assessments are calculated using a formula of total square footage combined with public frontage space.

“We’re paying two or three times what a typical parcel owner pays on the boardwalk,” Marlene Okulick said.

BID supporters said that even if the Okulicks are not business operators, they – and much of the Venice community – are set to benefit from extra security patrols and sidewalk cleaning services that the BID will soon start providing.

Okulick said she and her husband don’t want or need the BID services, especially marketing.

“We don’t feel we the need to promote Venice as a destination,” she said. “We personally don’t need the PR. That should go to the businesses along the boardwalk, for which the district was actually intended.”

Indeed, the welfare of those businesses along the boardwalk has been a key concern for City Councilman Mike Bonin, who represents Venice.

“I am very excited that the Venice Beach BID has launched because it will help create a cleaner and safer Boardwalk for everyone to enjoy,” Bonin said in an email. “BIDs are a commonly used tool to help supplement public services for neighborhoods, and this BID will make it possible for us to expand the services that the neighborhood deserves.”