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II. BACKGROUND TMDs are an evolution of the traditional Business Improvement District. The first TMD was formed in West Hollywood, California in 1989. Since then, over 100 California destinations have followed suit. In recent years, other states have begun adopting the California model — Montana, South Dakota, Washington, Colorado, Texas and Louisiana have adopted TMD laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to form a TBID. And, some cities, like Portland, Oregon and Memphis, Tennessee have utilized their home rule powers to create TMDs without a state law. Number of TIDs Operating Nationwide 200 150 100 50 California's TMDs collectively raise over $275 million annually for local destination marketing. With competitors raising their budgets, and increasing rivalry for visitor dollars, it is important that Santa Ana lodging businesses invest in stable, lodging -specific marketing programs, and promote Santa Ana as a tourist destination. 0 TMDs utilize the efficiencies of m m$$$$ o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 private sector OPPSa'YSOn In the market -based promotion of tourism districts. TMDs allow lodging business owners to organize their efforts to increase room night sales and overall tourism. Lodging business owners within the TMD pay an assessment and those funds are used to provide services that increase room night sales. In California, TMDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TMDs and other bent assessment districts is that funds raised are returned to the brivate non ro zt co42oration governing the district. There are many benefits to TMDs: • Funds must be spent on services and improvements that provide a specific benefit only to those who pay; • Funds cannot be diverted to general government programs; • They are customized to fit the needs of payors in each destination; • They allow for a wide range of services; • They are designed, created and governed by those who will paythe assessment; and • They provide a stable, long-term funding source for tourism promotion. SATMD Management District Plan 4 March 19, 2020 12A-13