SR-12-11-2012-9ACity Council Meeting: December 11, 2012
Agenda Item:
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Formation of a Santa Monica Tourism Marketing District and Amended
and Restated Services Agreement
Recommended Action
Staff recommends that the City Council:
1) Hold a final public hearing and adopt a Resolution of Formation to establish the
Santa Monica Tourism Marketing District ( SMTMD);
2) Authorize the City Manager to negotiate and execute an Amended and Restated
Services Agreement with the Santa Monica Convention and Visitors Bureau
(CVB), a California -based organization; and
3) Authorize the budget changes as outlined in the Financial Impacts & Budget
Actions section of this report.
Executive Summary
At its meeting on October 23, 2012, Council received petitions from a majority of
qualifying lodging establishments in support of the establishment of the SMTMD and
adopted a Resolution of Intent No. 10708 (CCS) to establish a SMTMD. On
November 13, 2012, Council held a public hearing to receive testimony; no majority
protest was received. A second and final public hearing is required in conjunction with
the adoption of the Resolution of Formation to establish the SMTMD and the levy of the
assessment.
If the SMTMD is established, the additional responsibilities related to the management
of the SMTMD would be captured within an Amended and Restated Services
Agreement between the City and the CVB with an initial term of five years. Collection of
assessments is anticipated to commence on January 1, 2013.
Background
The Santa Monica Convention and Visitors Bureau (CVB), a 501(c)(4) non - profit
corporation, has been marketing Santa Monica as a visitor destination since 1982. The
current Services Agreement was authorized by Council on July 13. 2010 for a term of
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three years to promote travel and tourism in Santa Monica. The City's funding of the
CVB is allocated during the budget process.
The proposed SMTMD was initiated by the CVB in conjunction with Santa Monica
hotels for the purpose of providing a self- assessment on qualifying hotels to generate
additional revenues for tourism promotion and marketing. On October 23, 2012, Council
received the Santa Monica Tourism Marketing District Management District Plan,
accepted petitions from qualified lodging businesses representing 79.36 percent of the
proposed assessments, and adopted a Resolution of Intention which set an initial public
hearing for November 13, 2012 and the final hearing for December 11, 2012.
Discussion
The proposed SMTMD assessment would be used to fund international marketing and
sales campaigns to promote Santa Monica and its lodging establishments.
The assessment would be a fixed -rate fee per occupied room night. The SMTMD
charge would range from $2 for rooms between $100 and $200 per night, $3 for those
up to $300 and $4 for rooms above $300 per night. Assessments can be increased up
to 25 cents per year during the five -year term. The SMTMD is estimated to generate
approximately $3,129,000 in its first year. The City would retain $16,500 of the SMTMD
assessments as an administration fee to cover the City's cost associated with the
monthly collection and transmittal of the SMTMD assessments to the CVB.
The administration fee would be subject to an annual. increase of five percent. SMTMD
assessment funds are intended to supplement, not supplant, existing City funding.
The City would continue to allocate base funding to the CVB for tourism marketing
though its annual budget process. In FY 2012/13, Council allocated $2,562,744 to the
CVB.
In additional to adopting the attached resolution, staff recommends Council authorize an
Amended and Restated Agreement with the CVB to incorporate the addition of the
SMTMD into the CVB's existing roles and responsibilities and to allow the City to.
transfer the collected assessments to the CVB. The CVB will continue to provide
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tourism and marketing programs, operate Visitor Centers, organize summits,
conferences and community events, and promote Santa Monica through print and social
media outlets. The Amended and Restated Services Agreement would supersede the
current Services Agreement, with an initial term of five years.
Financial Impacts & Budget Actions
The City would retain $16,500 of the SMTMD assessments as an administration fee to
cover the City's costs associated with the monthly collection and transfer of the SMTMD
assessments. A revenue budget of $16,500 will be established at account
01224.408420.
Prepared by: Elana Buegoff, Sr. Development Analyst
Approved:
Andy Agle, Director
Housing and Economic Development
Attachments:
A. Resolution of Formation
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Forwarded to Council:
Rod Gould
City Manager
Reference Resolution No.
10722 (CCS).