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Home My WebLink About2024-11-13; Carlsbad Tourism Business Improvement District; 2; Disestablishment of the Carlsbad Tourism Business Improvement DistrictMeeting Date: Nov. 13, 2024 To: CTBID Advisory Board Members From: Matt Sanford, Economic Development Director Staff Contact: Matt Sanford, Economic Development Director matt.sanford@carlsbadca.gov, 760-607-2923 Subject: Disestablishment of the Carlsbad Tourism Business Improvement District Recommended Action Adopt a resolution recommending the City Council disestablish the Carlsbad Tourism Business Improvement District established in 2005 and repeal Carlsbad Municipal Code Chapter 3.37. Item Explanation The current Carlsbad Tourism Business Improvement District was established in 2005 under the state’s Parking and Business Improvement Area Law of 1989 (Old CTBID). In 2020, the district, through a petition from the majority of the lodging businesses in Carlsbad, as measured by the revenue they contributed, and subsequent City Council action, raised the assessment from $1 per room night to 2% of the daily room night cost. The increase in the assessment rate increased the district’s budget from approximately $1.5 million to approximately $6.5 million. This larger budget went into effect beginning fiscal year 2020-21 and has allowed for more robust tourism promotion. The statutory authority for the existing district was adequate in previous years, but with the district’s increased assessment, budget and capabilities grew, and a majority of Carlsbad lodging businesses – which both pay and benefit from the assessment – expressed their support to form a new Carlsbad Tourism Business Improvement District with a more modern authorization structure. On January 12, 2022, the CTBID Advisory Board, made up of representatives of local hotels and resorts, voted to explore options to modernize the district’s operations, including possibly reestablishing the district under the Property and Business Improvement District Law of 1994. In October 2022, information about the potential changes and a copy of the petition was sent to all lodging businesses. The city received enough petitions in support of the change to allow the City Council to establish a new district. On April 18, 2023, the City Council formed a new Carlsbad Tourism Business Improvement District (New CTBID) under the Property and Business Improvement District Law of 1994 Nov. 13, 2024 Item 2 Page 1 of 4 CARLSff DiOURISM ;USINESS IMPROVEMENT DISTRICT Sta epo t . (California Streets and Highways Code Sections 36600 et seq.). Visit Carlsbad was selected as the Owners’ Association under the New CTBID to implement the New CTBID’s management district plan. The New CTBID and corresponding assessment began on July 1, 2023, and was authorized for a five-year period. Because of the formation of the New CTBID, the Old CTBID’s assessment was not levied in fiscal years 2023-24 and 2024-25. However, the Old CTBID could not be disestablished at the time because a balance of approximately $7 million remained from previous years’ assessments. Those funds had to be expended on programs and services consistent with the Old CTBID’s guidelines. On June 27, 2023, to expend the Old CTBID’s funds collected in fiscal year 2022-23, the CTBID Advisory Board approved an amendment to extend the contract with Visit Carlsbad to execute the same program of work until the remaining Old CTBID funds were fully expended. As of June 30, 2024, all funds collected under the Old CTBID were expended and as of October 2024, all services utilizing those funds were rendered by Visit Carlsbad. Because there are no remaining funds and the assessment has already been discontinued, the CTBID Advisory Board may provide a recommendation to the City Council to disestablish the Old CTBID. Fiscal Impact None. Next Steps Should the CTBID Advisory Board adopt the resolution recommending disestablishment of the Old CTBID, staff will proceed with scheduling the necessary public hearing and item for City Council consideration. Environmental Impact This action does not constitute a “project” within the meaning of the California Environmental Quality Act under California Public Resources Code Section 21065, in that it has no potential to cause either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. Exhibits 1.Resolution - CTBID Disestablishment Recommendation Nov. 13, 2024 Item 2 Page 2 of 4 Nov. 13, 2024 Item #2 Page 3 of 4 RESOLUTION NO. 2024-1 A RESOLUTION OF THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT ADVISORY BOARD OF THE CITY . OF CARLSBAD, CALIFORNIA, RECOMMENDING THE CITY COUNCIL DISESTABLISH THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT ESTABLISHED IN 2005 AND REPEAL CARLSBAD MUNICIPAL CODE CHAPTER 3.37 Exhibit 1 WHEREAS, on Nov. 15, 2005, the City Council of the City of Carlsbad approved Ordinance No. NS-778 enacting Chapter 3.37 of the Carlsbad Municipal Code establishing the Carlsbad Tourism Business Improvement District {Old CTBID} under the Parking and Business Improvement Area Law of 1989 {California Streets and Highways Code Section 36500 et seq.); and WHEREAS, the City Council established the Carlsbad Tourism Business Improvement District Advisory Board (CTBID Advisory Board) as authorized under the California Streets and Highways Code Section 36530 and codified in Carlsbad Municipal Code Section 3.37.100; and WHEREAS, the City Council formed a new Carlsbad Tourism Business Improvement District on \ April 18, 2023 (New CTBID} under the Property and Business Improvement District Law of 1994 {94 Law) (California Streets and Highways Code Section 36600 et seq.} as effectuated in City Council Resolution No. 2023-118; and WHEREAS, the New CTBID will continue to promote tourism and visitor services with Visit Carlsbad as the contracted Owners' Association as defined under the 94 Law; and ' • WHEREAS, as a result of the New CTBID's establishment, the Old CTBID has wound down operations and exhausted its remaining funds as of October 31, 2024; and WHEREAS, there are no remaining assets to dispose of acquired with the revenues of the assessments levied and collected for the Old CTBID's projects, programs, activities, and administration. NOW, THEREFORE, BE IT RESOLVED by the Carlsbad Tourism Business Improvement District Advisory Board of the City of Ca~lsbad, California, as follows: , 1. That the above retitaticms are true and correct. 2. That the Carlsbad Tourism Business Improvement District Advisory Board recommends the City Council disestablish the Old CTBID and repeal Carlsbad Municipal Code Chapter 3.37. Nov. 13, 2024 Item #2 Page 4 of 4 PASSED, APPROVED AND ADOPTED at a Special Meeting of the Carlsbad Tourism Business Improvement District Advisory Board of the City of Carlsbad on the 13th day of November 2024, by the following vote, to wit: AYES: Canepa, Chapin, Eding, Bryan, Castillon NAYS: ABSTAIN: ABSENT: Noe u~ttn ~ j~HERRI FREISINGER, City Clerk (/ (SEAL)