DOWNTOWN : Merchants Target Special District

Merchants are organizing a campaign to disband Los Angeles’ first business improvement district along an eight-block stretch of Broadway.

Contending that the special tax collected by the city is unfair and that the district’s administrative costs are too high, a jewelry store owner is collecting petitions that would kill the year-old district, which taxes businesses based on sales.

“I opposed it when it was established, and I’m opposing it again,” store owner Herman Cohen said.

The district, called Miracle on Broadway and approved for one year by the Los Angeles City Council, officially expired July 1. But its administrators applied last week for a one-year renewal, setting the stage for a public hearing and vote.

By state law, the district cannot be approved by the City Council if merchants representing 50% plus $1 of the district’s total assessments are opposed. The district collected about $420,000 last year, but expects to collect only $300,000 for 1995-96.

Both supporters and opponents of the district say the extra taxes that have paid for street cleaners, trash removal and police on bicycles have improved the retail area’s looks.

But Cohen said the tax is unfair because some businesses deal heavily in cash and don’t report all their income. Though Cohen argued that merchants already pay the city enough in taxes to fund cleaning and security services, he said he is willing to consider other tax formulas.

“Maybe it should be done by a business’ square footage or the number of employees,” he said. Cohen also suggested that property owners be taxed.

For 1995-96, administrators propose spending $119,000 on salaries, benefits, office expenses and accounting and $172,000 on public safety, maintenance and marketing.

Estela Lopez, executive director of Miracle on Broadway, said the overhead is necessary, though merchants may find it difficult to accept.