Sacramento ● Los Angeles ● San Luis Obispo Partnerships. Progress. Prosperity. CIVITAS Morro Bay TID Presentation October 21, 2014

Overview TID OverviewBeyond LodgingNational TID Survey Results

TID Overview

A rose by any other name..

Characteristics of TIDs Assessment on room night sales % of revenue or $ per night Mechanism Cannot be diverted Varying terms – 1-40 years Stability New or existing nonprofit DMO or hotel organization Local Government oversight Governance

The TID Revolution Started in West Hollywood, 1992 Slow initial growth Rapid expansion in last decade Districts Now 85 California 17 Montana 11 Washington 5 South Dakota 1 Oregon 1 Texas 1 New Jersey 1 Kansas Next Up 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 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 1994 Law 1989 Law

Governing Documents –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 –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 SLO County TMD Morro Bay TBID

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

OutreachDocument PreparationOwner ApprovalCity Approval Four steps to TID formation:

Formation Process Initiated by City Council City Council adopts Resolution of Intention City Council holds public hearing City Council adopts Ordinance Assessment collection begins 1989 Law

Formation Process 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 1994 Law

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? RestaurantsRetailAttractionsWineriesAuto

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 – Five year contract with the city for funding Newport Beach Restaurant District

Newport Organizational Chart Visit Newport Beach 501 (c)(6) 6-member board TBID management/Brown Act Newport Beach Foundation 501(c)(3) Fundraising Arm (Potential Future Organization) Newport Beach & Co. 501(c)(6) TOT Funds 24-member board No Brown Act Dine Newport Beach RBID Management Marketing Film Newport Beach Attract film companies Revenue from permits Celebrate Newport Beach Execute events Develop new events 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 “45% increase in hotel stays between 2010 and 2013.” “Overall results of initial 5 year district (during Recession) was approximately 20:1” “We have shown over 100% increase in weekend stays.” “More than 50% increase to TOT revenues in the past 4 years.”

Snapshot “Articles in the New York Times and Smithsonian 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.” “Increased generated room nights by 550% since 2008.”

Questions and Comments John Lambeth, President Civitas (800)