12A - RESO FOR TOURISM - Laserfiche WebLink

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Resolution to Establish SATMD September 15, 2020 Page 2 Lodging business owners decided to pursue the establishment of the SATMD in order to create a revenue source devoted to marketing Santa Ana as a tourism, meeting, and event destination. If established, the SATMD would generate approximately $2,400,000 (Pre-COVID estimate) on an annual basis to be used for promotion of travel and tourism specific to Santa Ana. These funds would be solely controlled by the Travel Santa Ana Board of Directors, a non-profit that will be established to administer this new marketing district. TOURISM MARKETING DISTRICT BACKGROUND Tourism Marketing Districts (TMDs) utilize the efficiencies of private sector operation in the market - based promotion of tourism. These special assessment districts allow lodging business owners to organize their efforts to increase tourism. Funding for the TMD is providing by member lodging business owners, and those funds are used to provide services that are desired by and benefit the lodging businesses in return. TMD Benefits • Funds cannot be diverted to other City government programs • Customized to fit the needs of each destination • Allow for a wide range of services including: destination marketing, tourism promotion, and sales lead generation • Designed, created, and governed by those who will pay for the assessment • Provide a stable funding source for tourism promotion In California, TMDs are primarily formed pursuant to the Property and Business Improvement District Law of 1994 (94 Law). This law allows for the creation of a special benefit assessment district to raise funds within a specific geographic area. The key difference between TMDs and other special benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the TMD. MANAGEMENT DISTRICT PLAN The Management District Plan (Exhibit 2) includes the proposed boundary of the SATMD, a service plan and budget, and a proposed means of governance. The SATMD will include all lodging businesses with 70 rooms or more, existing and in the future, available for public occupancy within the boundaries of the City of Santa Ana. The established SATMD will have a five-year term, from January 1, 2021 through December 31, 2025. The assessment will be implemented beginning January 1, 2021. Once per year beginning on the anniversary of SATMD establishment, there is a 30-day period in which business owners paying 50 percent or more of the assessment may protest and begin proceedings to terminate the SATMD. The annual assessment rate is two percent of gross short-term room rental revenue. The City of Santa Ana will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties, and interest) from each assessed lodging business located in the boundaries of the SATMD. The City shall take all reasonable efforts to collect the assessments from each assessed lodging business. The City will then disburse the assessment amounts to the Travel Santa Ana non-profit organization, which will have the responsibility of 12A-2