SR 03-09-2021 3C
City Council Report
City Council Meeting: March 9, 2021
Agenda Item: 3.C
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval of Santa Monica Travel and Tourism's (SMTT) receipt of Loan from
Paycheck Protection Program
Recommended Action
Staff recommends that the City Council approve the Santa Monica Travel and
Tourism’s receipt of a $406,253.70 loan from the Paycheck Protection Program.
Summary
Due to the COVID-19 crisis, Santa Monica Travel and Tourism (SMTT) applied for
funding from the Federal government’s Paycheck Protection Program (PPP). As
tourism is an essential component to the City’s economic recovery and vitality, staff
recommends that Council approve SMTT’s acceptance of a PPP Loan to allow SMTT
to fund COVID-19 related safety improvements to its facilities, deferred rents, and
rebuild staff capacity to promote Santa Monica as a safe travel destination.
Discussion
The City has a longstanding partnership with SMTT. Through a Services Agreement
with SMTT, the City provides annual funding to continue SMTT “core services” of
providing tourism and marketing programs, operating Visitors Centers, creating brand
awareness, and promoting Santa Monica as a travel destination through print and
social media. For the FY 2020-21 Adopted Budget, the City allocated $2,765,996 to
fund SMTT core services.
Additionally, SMTT provides “enhanced services” funded with local hotel assessments.
In 2012, local hotels partnered with SMTT to establish the Santa Monica Tourism and
Marketing District (SMTMD) specifically to promote lodging in Santa Monica. The City
does not fund the SMTMD. Funding for the SMTMD is derived from assessments and
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revenues collected from the hotels operating within the boundaries of the SMTMD. Due
to the COVID-19 crisis, SMTT cut SMTMD expenditures and services for FY 2020-21 to
reflect a significant decline in hotel assessment revenues. SMTMD collections are
forecasted to be down a minimum of 75 percent, which affects programs, services, and
labor. Total SMTMD program expenditures have been reduced by 40 percent from FY
2019-20 levels, which was budgeted at $5,492,103. SMTMD program expenditures for
FY 2020-21 are focused on recovery and destination promotion to serve as a catalyst
for economic recovery and are budgeted at $3,320,022.
The Paycheck Protection Program (PPP) is a Small Business Administration backed
loan that helps businesses and non-profits keep their workforce employed during the
COVID-19 crisis. SMTT has applied for and received a PPP loan of $406,253.70 on
January 28, 2021 to fund operational costs and efforts to rebuild capacity. At its
January 13, 2021 board meeting, the SMTT Board of Directors considered and
approved the PPP funds to be allocated as follows:
Visitor Centers
COVID Safety
Improvements $23,250.00
Repair and install additional COVID safety
protocols at SMTT visitor centers on the Pier,
Palisades Park and Main Street.
Main Office
COVID
Upgrades
$21,251.48 Repair and install additional COVID safety
protocols (walls, dividers, additional janitorial,
etc.) at SMTT administrative offices,
conference room and sublease space.
Rent
Repayment
$118,000.00 Repayment of 8 months of 50% rent.
Salaries and
Benefits
$243,752.22 Fill 10 positions before end of FY 2020-2021.
The City’s services agreement with SMTT requires Council approval of any external
funding of greater than $100,000. Given that PPP proceeds will enable SMTT to
continue to provide core and enhanced services to Santa Monica, staff recommends
approval of the SMTT’s acceptance of the PPP funding.
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Past Council Actions
Meeting Date Description
12/11/2012
(attachment A)
Formation of a Santa Monica Tourism Marketing District
(SMTMD) and Amended and Restated Services Agreement
11/1/2016
(attachment B)
Council adopted Resolution 11005 (CCS) extending the
SMTMD by nine and one-half years beginning January 1,
2018 through June 30, 2027
07/14/2020
(attachment C)
Approval of Santa Monica Tourism Marketing District FY
2020-21 Budget and Work Plan
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action. As tourism is expected to have a slower recovery than other
sectors of the economy, any additional efforts to promote Santa Monica would have a
positive impact on City revenue streams. The PPP funding would help SMTT build up
its capacity to help with recovery and rebuild the City’s TOT revenues, which have seen
a 40% drop.
Prepared By: Nia Tang, Senior Development Analyst
Approved
Forwarded to Council
Attachments:
A. Attachment A - Staff Report 12/11/2012 (Web Link)
B. Attachment B - Staff Report 11/01/2016 (Web Link)
C. Attachment C - Staff Report 7/14/2020 (Web Link)
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