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EXHIBIT 2 <br />ROH: 11/03/15 <br />RESOLUTION NO, 2015- <br />A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF <br />SANTA ANA TO ESTABLISH A HOTEL DEVELOPMENT <br />INCENTIVE PROGRAM <br />BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS <br />FOLLOWS; <br />Section 1. The City Council of the City of Santa Ana hereby finds, determines <br />and declares as follows; <br />Santa Ana's proximity to the Anaheim resort district, the John Wayne <br />Airport, and local amenities like the Discovery Science Cube and the <br />Bowers Museum makes it a perfect location to attract incoming tourists <br />and visitors to Orange County. <br />2. New hotel development will be essential to creating jobs, expanding tax <br />revenue, and adding amenities to the City. Currently, the City of Santa <br />Ana does not have any four to five star rated or AAA Four Diamond or <br />above hotels. The City does have nine three -star rated hotels. All other <br />hotels /motels are rated from one to two -star. According to a study by <br />hospitality research consultant PFK, the. average occupancy rate for <br />Orange County hotels is 78.3 %, indicating that there is still room for the <br />development of new hotels in this area. <br />3. The City currently imposes an 11 % Hotel Visitors' Tax (HVT) on hotel and <br />motel guests staying at facilities within the City. The purpose of this tax is <br />to partially recover some costs of governmental services associated with <br />visitors to the City. The anticipated revenue from the HVT for Fiscal Year <br />15/16 is $8.8 million dollars. <br />4. To spur the development of high quality hotels (four to five star rated or <br />AAA Four Diamond or above), the City is proposing to offer an economic <br />incentive to close the funding gap in a proposed high quality hotel <br />development. A feasibility analysis would be completed for the project, <br />whereby a projection of operating performance is combined with project <br />development cost in order to determine the funding gap. A financial firm <br />would be used for the feasibility analysis. This analysis would be funded <br />by the developer. <br />The City would pay for the funding gap through incentive payments up to a <br />period of 10 to 15 years depending on each negotiated incentive <br />agreement. The City would use a percentage (50 %) of HVT generated by <br />Resolution No. 2015- <br />55B -53 <br />