Transcript Document

C I V I TA S
Partnerships. Progress. Prosperity.
Sacramento ● Los Angeles ● San Luis Obispo
Morro Bay TID Presentation
October 21, 2014
Overview
TID Overview
Beyond Lodging
National TID Survey Results
TID Overview
A rose by any other name..
Characteristics of TIDs
Mechanism
• Assessment on room night sales
• % of revenue or $ per night
Stability
• Cannot be diverted
• Varying terms – 1-40 years
Governance
• New or existing nonprofit
• DMO or hotel organization
• Local Government oversight
The TID Revolution
Next Up
Districts Now
Started in
West
Hollywood,
1992
Slow initial
growth
Rapid
expansion in
last decade
• 85 California
• 17 Montana
• 11 Washington
• 5 South Dakota
• 1 Oregon
• 1 Texas
• 1 New Jersey
• 1 Kansas
• Pennsylvania
• Oklahoma
• Wisconsin
• Florida
• Tennessee
Morro Bay TBID
• Formed pursuant to
the 1989 Act.
• Assessment is 3% of
gross revenue
• Raises approximately
$500,000
per year
Morro Bay TBID
Pursuant to the Morro Bay Ordinance, the TBID is
authorized to use funds for:
• The general promotion of tourism within the
district
• The marketing of conference, group, and film
business
• The marketing of the district to the travel industry
Each of these authorized uses must directly benefit
the assessed hotels
California has two TID laws
1989 Law
1994 Law
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No petition
1 year term
Annual renewal
Business only
Appointed advisory board
City can disestablish
Morro Bay TBID formed
under 89 law
50% + 1 petition
5 or 10 year term
Annual report
Business or property
Non-profit management
Payors can disestablish
SLO County TMD formed
under 94 law
Governing Documents
Morro Bay TBID
– Formed pursuant to the 1989
law
– Governed by Morro Bay
Ordinance No. 546 and the
annual report
– Ordinance allows for:
• General promotion of
tourism
• Marketing of conference,
group and film businesses
• Marketing the district to the
travel industry
SLO County TMD
– Formed pursuant to the 1994
law
– Governed by the management
district plan and the annual
report
– Management district plan
allows for:
• Advertising and promotions
programs, sales programs
and marketing programs
Proposition 26
Voters approved in November 2010-Article XIIIC of CA
Constitution
All levies are a tax and require a 2/3 vote of the electorate,
unless:
Seven exceptions:
• A charge imposed for a specific benefit conferred or privilege granted directly
to the payor that is not provided to those not charged
• A charge imposed for a specific government service or product provided
directly to the payor that is not provided to those not charged
AB 483 (Ting)
• Introduced 8/13/13
• Approved by legislature
– 2/3 vote
• Signed by Governor
10/4/13
• Urgency legislation –
effective immediately
• Adds two definitions:
– Specific Benefit
– Specific Government
Service
Four steps to TID formation:
Outreach
Document Preparation
Owner Approval
City Approval
Formation Process
1989 Law
• Initiated by City Council
• City Council adopts Resolution of Intention
• City Council holds public hearing
• City Council adopts Ordinance
• Assessment collection begins
Formation Process
1994 Law
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Develop management district plan
Submit 50% + 1 petition to City
City Council adopts Resolution of Intention
City Council holds public meeting and public
hearing
• City Council adopts Resolution of Formation
• Assessment collection begins
Assessed Businesses
The types of businesses that are typically
assessed in a TID include:
• Hotels/Motels/Inns
• Bed & Breakfast
• Vacation Rentals
• RV Parks
• Campgrounds
Beyond Lodging
If lodging businesses can do it, why
not others?
Restaurants
Retail
Attractions
Wineries
Auto
Newport Beach Restaurant District
• Established in 1996
• Annual budget: $315,000
• Assessment rate based on number of
employees
• Services include advertising campaigns, direct
mailers, online reservation system, dining guide
productions, sponsorship of restaurant week
• Website an important part of promotions –
www.newportbeachdining.com
• Five year contract with the city for funding
Newport Organizational Chart
Newport Beach
Foundation
Visit Newport Beach
501 (c)(6)
6-member board
501(c)(3)
Fundraising Arm
(Potential Future Organization)
TBID management/Brown Act
Newport Beach & Co.
501(c)(6)
TOT Funds
24-member board
No Brown Act
Film Newport Beach
Attract film companies
Revenue from
permits
Celebrate Newport
Beach
Execute events
Develop new events
Dine Newport Beach
RBID Management
Marketing
Enterprise Newport
Beach
B-2-B & BID
marketing
Mammoth Lakes TID
Included Business Types
• Attractions
• Restaurants
• Retail
• Transportation
• Other tourism related
Challenge is linkage between programs and assessees as defined
businesses
Restaurant/Retail Districts have been created
National TID Survey Results
What was the primary reason your
destination formed a tourism district?
What was the biggest challenge in
forming you district?
What is the assessment rate in your
tourism district?
On average destinations
increased their tourism funding
by 192% after the formation of
a tourism district.
Snapshot
• “We have shown over
100% increase in
weekend stays.”
• “45% increase in hotel
stays between 2010
and 2013.”
• “More than 50%
increase to TOT
revenues in the past 4
years.”
• “Overall results of
initial 5 year district
(during Recession) was
approximately 20:1”
Snapshot
• “Articles in the New York
• “Increased generated room
Times and Smithsonian
nights by 550% since 2008.”
Magazine which tracked
over 20,000 unique visitors
daily to our website.”
• “More than 800% ROI on TID funds to gross
revenue generated by increased room night
sales. Group bookings went from 10K a year
to nearly 60K.”
Questions and Comments
John Lambeth, President
Civitas
www.civitasadvisors.com
(800)999-7781