Shop Owner Sues City Over Assessment : Ventura: The complaint says officials failed to follow procedures for special tax districts and alleges that some council members had a conflict of interest.

A Ventura businessman on Wednesday filed a lawsuit against the city, alleging that the Ventura City Council has improperly imposed a special tax on downtown merchants to raise money for promoting the area to tourists.

The assessments--which average $135 a year for each business--were levied last month amid strong opposition from nearly half of the 363 merchants and business owners in downtown Ventura.

Joe Di Rodio, who owns an upholstery shop on Main Street, said he filed the lawsuit because his business does not benefit from the taxes, which are geared toward promoting tourism in the area.

“It’s a sham,” said Di Rodio, who refused to pay his $240 assessment last year. “If you look at the people who want this, it’s the hotels, the restaurants, the retailers. It’s a way to defuse their advertising costs on the rest of the businesses.”

Specifically, the suit alleges that city officials failed to follow procedures outlined in state law on how to set up special assessment districts and levy special taxes.

The complaint also alleges that some council members should have abstained from voting on the matter because they have a conflict of interest. Some council members or their relatives have businesses or other financial interests in the special assessment district, the suit said.

The lawsuit, filed in Ventura County Superior Court, wants the city to refund the assessments to all downtown merchants and any penalties for non-payment.

“I think it’s unfortunate that they’re resorting to this,” said Mayor Gregory L. Carson, who met with disgruntled merchants earlier this week to work out a compromise about the assessments. The negotiations have yet to resolve the matter, he said.

The special tax program was created about a year ago so that merchants could pool their money to revitalize the downtown area, which was once the city’s commercial center. The district is bordered by Ash and Olive streets on the east and west, and by Poli Street and the Pacific Ocean on the north and south.

So far, the program has produced a retail shopping guide, conducted two advertising campaigns and sponsored outdoor concerts to bring more customers to the area. The City Council has favored the program as part of its long-term plans to redevelop the area.

Last year, more than 100 businesses refused to pay anything and another 40 paid only half of their assessments.

Each year, the council must hold public hearings before deciding whether to continue to levy the special assessments.

In February, about half of the merchants signed formal requests to drop the tax. But the tax opponents represented only 47% of the total $56,653 yearly assessments, city officials said. And under state law, the council must drop the tax only if merchants representing more than 50% of the total assessed tax file objections.

But Di Rodio’s lawsuit said city officials “seriously misled” opposition leaders by giving them the wrong list of how many businesses were in the district.

Using an outdated list of 332 downtown businesses, opponents did not have a fair chance to determine how many business leaders were needed to defeat the tax, the suit said. The city’s list of assessments actually showed 363 businesses downtown, and opponents failed to gather enough signatures to force the council to drop the tax.

Edward Buckle, Di Rodio’s attorney, said he is asking the court to designate the case a class-action lawsuit that would include all the merchants in downtown who object to the assessments.

Buckle’s office is also in the district and the attorney said he has not paid his $100 assessment for last year.