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HomeMy WebLinkAbout2005-04-05; City Council; 18048; Formation of Tourist Business Improvement DistrictCITY OF CARLSBAD - AGENDA BILL AB# 18,048 MTG. 4/5/05 DEPT. CA TITLE: APPROVAL OF FUNDING REQUEST FROM CARLSBAD CONVENTION AND VISITOR’S BUREAU FOR THE FORMATION OF A TOURIST BUSINESS IMPROVEMENT DISTRICT DEPT. HD. CITYATTY. & CITY MGR Adopt Resolution No. 2005 -094 approving a loan of $33,500 to the Carlsbad Convention and Visitor’s Bureau to form a proposed Tourism Business Improvement District to be repaid by the District after formation. ITEM EXPLANATION: The City Council received a presentation from the Carlsbad Convention and Visitor’s Bureau for the formation of a proposed Tourism Business Improvement District at its regular meeting of March 22, 2005. The Council approved the request in concept and directed the City Attorney to prepare documents authorizing the funding in the form of a loan to be repaid from the District after formation. The Council should satisfy itself that the attached documents express its intent in this matter. FISCAL IMPACT: Carlsbad Convention and Visitor’s Bureau’s proposal estimates the cost to provide consultant services for establishing the Tourism Business Improvement District for Carlsbad at $33,500 which will be repaid from the District after formation. EXHIBITS: Resolution No. 2005 -094 DEPARTMENT CONTACT: Ronald R. Ball, 434-2891 I RESOLUTION NO. 2005-094 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROPRIATING FUNDS IN THE FORM OF A LOAN TO THE CARLSBAD CONVENTION AND VISITOR’S BUREAU WHEREAS, the City Council received proposals from the Carlsbad Convention and Visitor’s Bureau by its letters of January 26, 2005, and February 17, 2005 which included a proposal to establish the Carlsbad Tourism Business Improvement District, collectively attached hereto as Exhibit A; and WHEREAS, the City Council considered this request at its regular meeting of March 22,2005; and WHEREAS, the Carlsbad Convention and Visitor’s Bureau represented that its request for funding of $23,500 for its consultant Downtown Resources and $10,000 for its consultant Strategic Marketing Group would be in the form of a loan to be repaid by the District after formation; and WHEREAS, one of the primary purposes of a tourism business improvement district is to promote tourism within the City of Carlsbad by creating a revenue stream that would be used to further that purpose; and WHEREAS, the legislature of the State of California has enacted the “Parking and Business Improvement Area Law of 1989”, Streets and Highways Code section 36500 et seq., declaring that tourism is a large and growing contributor to California’s economy and that promotion of a city’s scenic, recreational, cultural and other attractions as a tourist destination is an important public purpose; and WHEREAS, the legislature has found that assessments levied for the purpose of providing improvements and promoting activities which benefit individual 1 d, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 businesses may also benefit the property within the area directly or indirectly and that those assessments are not taxes for the general benefit of a city but, instead, are assessments for the improvements and activities which confer special benefits upon the businesses for which the improvements and activities are provided; and WHEREAS, the City Council shall appoint an advisory board which shall make recommendations to the City Council on the expenditure of revenues derived from the levy of assessments pursuant to the Parking and Business Improvement Area Law of 1989 and on the method and basis of levying the assessments; and WHEREAS, the Council finds that the proposal to establish the Carlsbad Tourism Business Improvement District comports with this intent; and WHEREAS, a proposed plan leading to a Resolution of Intent to be adopted by the City Council which resolution shall do all of the following: 0 State that a business improvement district is proposed and describe its boundaries and the name of the proposed district. 0 Describe the types of improvements and activities proposed to be funded by the levy of assessments on businesses in the area. 0 State that, except where funds are otherwise available, an assessment will be levied annually. 0 Describe the proposed method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of assessment to be levied against his or her business. 0 State whether or not any new businesses recently established in the area will be exempt from assessment for a period not to exceed one year. 2 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 0 Fix a time and a place for a public hearing on the establishment of the district and the levy of assessments which shall be held not less than 20 or more than 30 days after the adoption of the Resolution of Intention. 0 State that after hearing the testimony of all interested persons for or against the establishment of the area, the boundaries of the area or the delivery of specified types of improvement or activities will be heard; and WHEREAS, the Council understands that this process shall require close cooperation between CONVIS and City staff, NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the Finance Director is authorized to make an appropriation of $33,500 from the City Council’s Contingency Fund to the Carlsbad Convention and Visitor’s Bureau upon the condition that it be made in the form of a loan to be repaid from the District after formation. 3. That the Carlsbad Convention and Visitor‘s Bureau and its consultants are directed to work closely with staff in the development of the necessary documents and reports and during the formation period. 4. That the Carlsbad Convention and Visitor‘s Bureau acknowledge these conditions in writing prior to disbursement of any loan proceeds. Ill Ill Ill 3 PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad held on the 5th day of APRIL , 2005 by the following vote, to wit: AYES: Council Members Lewis, Hall, Kulchin, Packard NOES: None ABSENT: Council Membe ATTEST: (SEAL) 4 Y rlsbad JJ - californta January 26,2005 Mr. Ray Patchett City Manager City of Carlsbad, City Hall Carlsbad, CA 92008 Dear Mr. Patchett: As you know, the Carlsbad Convention & Visitors Bureau has proposed the creation of a Tourism Business Improvement District for the purpose of funds enhancement and destination marketing for the City of Carlsbad. We believe this is an exciting proposition and one, if established, will create significant economic benefit to the City of Carlsbad. Attached is a requested proposal that we have received from Mr. John Lambeth of Downtown Resources. This proposal details: Detailed Scope of Services Draft Project Schedule Qualifications and Backgrounds Project Schedule, Fees, And Assigned Guidelines We would like to request funding from council to cover the services outlined in the attached proposal. As we believe that time is of the essence, the Carlsbad Convention & Visitors Bureau asks that our request be calendared for council action. It is understood that a staff recommendation will be required, and we stand ready to provide any and all additional information necessary to move our request forward. Any questions may be directed to Patrick Fearn, (760) 727-5100 ext. 102 or Kurt Burkhart, 434-6093. Thank you very much. Sincerely, !;L-- Patrick Fearn, Chairman d??& Kurt Burkhart, Executive Director Carlsbad Convention and Visitors Bureau Carlsbad Convention and Visitors Bureau Enclosure: Proposal, 11 pages Cc: Mayor Council Members Carlsbad CVB Board of Directors Carlsbad Convention & Visitors Bureau 400 Carlsbad Village Drive, Carlsbad, California 92008 (760) 434.6093 FAX (760) 434.6056 www.visitcarlsbad.com infoQvisitcarlsbad.com DOWNTOWN PROPOSAL TO ESTABLISH THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT Submitted to CARLSBAD CONWTNTIONAlVD VISITORS BUREAU January 26,2005 BY DOWNTOWN RESOURCES 3 FORMATION OF THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT Downtown Resources proposes to assist the Carlsbad Convention and Visitors Bureau (Carlsbad CVB) with the formation of the Carlsbad Tourism Business Improvement District (BID). STABLE FUNDING TO SUPPORT LODGING INDUSTRY As you know, thousands of propeay owners and business owners in cities throughout the United States are successfully using BIDs to improve their businesses. The proven track records of these districts led to the use of BIDs in California for tourism promotion. Stakeholders in the Carlsbad area have expressed interest in learning more about this tool and its ability to create a stable funding source to help support Carlsbad 's lodging businesses. The Parking and Business Improvement Area Law of 1989 is a powerful tool available to business owners as well as Cities for the purposes of improving tourism throughout their region. This tool empowers private business owners to work closely with elected and appointed government officials to establish higher levels of services dedicated solely to the improvement of tourism for the benefit of municipalities, employees, and business and propeq owners. As with most Cities, there is greater demand for improvements and services than can be provided with limited City and County funds. The BID can address the service gap to provide businesses and other stakeholders with a well-managed, dependable program to Mer tourism promotion. In concert with the Carlsbad Convention and Visitors Bureau, the Downtown Resources (DTR) Consultant Team wiU guide a process that includes facilitating stakeholder education and consensus building, developing a BID Business Plan, and preparing for and executing a protest procedure and hearing process. This proposal is based on the understanding that the Carlsbad CVB wiU provide the necessary assistance and time needed to facilitate this process at the local level, including substantial time devoted to outreach meetings, obtaining base data, obtaining owner information, and gathering support from the lodging business owners and other organizations. OVERVIEW OF BID FORMATION PROCESS The DTR Consultant Team will work with the Carlsbad CVB, and the City to make the BID a reality. Consensus building amongst the hoteliers has been taking place. After significant consensus building, the Consultant Team will develop a clear and concise BID Resolution of Intention to implement the business owners' vision for additional tourism related services. The Resolution of Intention will serve as the business plan for the Carlsbad efforts, providing recommendations for governance, structure, boundaries, benefit zones, service plan, budgets, and assessments. The Downtown Resources Consultant Team can assist with guiding an ongoing communications program explaining the benefits of the BID. The Consultant Team will also provide , recommendations regarding other helpful communications, including media relations, educational mater& and campaign marketing materials. Consultant legal counsel will work with counsel for city to review the BID Resolution of Intention, review the BID Formation Ordinance, establish a process sequence, establish a timetable, and provide general counsel in the organizational development and resolution process. DETAILED SCOPE OF SERVICES Four steps are anticipated over a five-month project period, resulting in the successful establishment of a Tourism Business Improvement District (BID) for Carlsbad. This proposal does include your request for our attendance at City Council meetings. We understand that you have agreed to do the majority of outreach to ratepayers and would like our services to focus on legal & swategic advice, and document preparation. Starting with a committed leadership base within the stakeholders, the process is designed to expand support for the effort, and establish a fair, defensible Tourism BID. The four steps are as follows: Step One: Step Two: Preparation of Documents Step Three: Revision of Documents Step Four: Project Initiation / BID Formation Infrastructure City Council Hearing Process Step One: Project Imtiation /BID Fomatiofi Infiastructure This task includes the development of the program infiastructure that will lead to the successful establishment of the Tourism BID. The Consultant Team will also assist in the Carlsbad CVB development of the database of district tourism businesses, and preparing a brief summary of the key components of other tourism related BIDS. 1.1 Develop Mutual Understanding of the Parameters of the Project The Consultants will work with Carlsbad CVB and other stakeholders to clarify the parameters of the project. It is recommended that assignments for the Consultant Team, the business owners, and the steering committee be established prior to initiation. At 1.2 Establish Leadership Infrastructure i i f, Tourism BID Steering Committee: We recommend y_o,u form a BID steering committee. We recommend that we work together to ensure that this committee has a broad representation, both geographically and by business type. The steering committee is intended to provide overall gutdance for keeping the project on track. This group will evolve into the “sales team” leading the effort to gain approval for the BID. 1.3 Database Creation / Refinement The Carlsbad CVB will be primarily responsible for providing the database information. This database will be used for owner contact and assessment scenario purposes. Variables that may need to be assembled / refined include business ownership, type, size, number of rooms, business contact and mailing information, and TOT information. 1.4 Outreach Materials The Consultant Team will help develop some relatively simple educational materials regarding tourism BIDS. These materials will be helpful in explaining the operations of a tourism BID as well as the formation process. These documents can be used as “leave behinds” in the outreach meetings described in Step 2. Step Two: Preparation ofDocuments The Carlsbad CVB has conducted the majority of outreach and consensus building. Once adequate support has been secured for a project concept, we will prepare draft resolutions requesting consent and granting consent to form the district. The Consultant Team will also develop the draft Resolution of Intention. After initiation, the lead agency will mail official notice to all business owners proposed to be assessed in the district and allow the opportunity for protest. 2.1 Resolution of Intention The Consultant Team will draft the necessary Resolution of Intention (ROI). The document will include proposed boundaries, assessments, services, and suggestions for governance. The ROI will also include all elements required by the Streets and Hghways Code sections goveming business improvement districts. 2.2 Ordinance to Establish the Tourism BID The Consultant Team will draft the necessary Ordinance to Establish the Tourism BID (Ordinance). This document will be the final resolution approved by the City Council and will specify all relevant terms of the BID. 2.3 Legal Review The documents will undergo a legal review that it is in compliance with the ‘Tarking and Business Improvement Area Law of 1989.” Legal counsel is also available to confer with staff on technical issues related to the plan, including the sequencing timetable for eventual BID adoption. Step Thee: Revl‘sion of Documents Drafts of the Resolution and Ordinance will be presented to the Carlsbad CVB, and other stakeholders. Based upon the input from the stakeholders, the Consultants will revise the resolutions as needed. 3.1 Consultation with Counsel The Consultant Team will work with City Attorney to ensure the resolutions meet with their satisfaction. The Consultant Team will incorporate comments, as required and ensure that the legal counsels’ issues have been addressed. 3.2 Final Resolution and Ordinance Based on comments from the workshop and counsel, DTR will present a final draft of the resolution and ordinance to the steering committee, Carlsbad CVB, and other businesses for final approval. Step Four: City Council Hem& Process Once Carlsbad CVB has approved the documents, DTR wiU assist the steering committee in submitting the documents to the City Council. The process will involve submitting the necessary sets of documents required by the City. Under the 1989 Act, a city must hold a meeting to pass the Resolution of Intention regarding the BID, hold a public meeting to solicit comments from the public, and hold a public hearing for hal approval of the Tourism BID. 4.1 Resolution of Intention Meeting The Consultant Team d attend the Resolution of Intention City Council meeting. The Consultant Team will provide legal guldance and presentations to the Council to obtain approval of the Resolutions of Intention. 4.2 Public Meeting The Consultant Team wiU assist Carlsbad CVB and the City in preparing for the required public meeting. The Consultant Team will outline the requirements for the meeting and work with counsel to ensure compliance with the BID statute. This proposal does not include attendance at this meeting. 4.3 Public Hearing The Consultant Team will be present at the hnal public hearing and be prepared to address any issues that may arise. If desired, the Consultant Team will be prepared to make brief presentations to the City and/or Council. 7 PROJECT SCHEDULE, FEES, AND ASSIGNMENT GUIDELINES A. PROJECT SCHEDULE We estimate that the proposed BID project can be achieved in a five month period. Based upon starting in February 2005, most of the formation process could be completed by June 2005. As you know, there are many unknown variables in a project of this nature. Although we would work diligently to form the district, factors outside our control, and outside Carlsbad CVB's control, could delay or thwart even the best-developed plans. We would work to minimize these risks and complete the project at the earliest possible date. City and stakeholder support is currently unknown and will not be known until after the suggested meetings. B. FEES Professional Fees The Downtown Resources Consultant Team's fees for the scope of work defined in this proposal reflect the quality and experience of the professional team. We have carefully analyzed the expected hours for every task and sub-task that must be accomplished in order to project an adequate number of hours to satisfactorily complete the project. TASK FEES 1. Proiect Agreement / BID Formation Infiastructure $ 2.000 2. 3 T~~Ds to Carlsbad $ 7.500 1 Trip - Meeting on Proposal and Contract 1 Trip - Resolution of Intention Hearing at City Council 1 Trip - Final Public Hearing at City Council 3. PreDaration of Documents $ 7.500 4. Revision of Documents 116 4.500 2 000 Total $ 23.500 C. EXPENSE REIMBURSEMENT DTR will incur various costs and expenses in performing consulting services under this Agreement. Carlsbad CVB agrees to pay all costs and expenses in addition to the hourly fees. Ordinary office costs such as local telephone, copies, postage, and faxes shall be billed at 3% of professional fees. Extraordinary expenses such as travel, long distance phone charges, messenger and/or other delivery fees, large copy projects, or postage for large mailers shall be charged at DTR's actual cost, It is our custom to bill monthly for the hours of consulting provided, extended by the applicable billing rate, plus out of pocket expenses at our cost. Our current billing rates for staff on this project include John Lambeth at $1 85 per hour, Lisa Nava at $1 10 per hour and Toshyona Olive at $95 per hour. Should the actual hours be less than those estimated we wiU bill the lesser amount. We request that our billings be paid within thyty (30) days of invoicing. We also request that 10% of the fee be paid at the time of executiofi of the contract to cover start up costs. D. COST ASSUMPTIONS AND ASSIGNMENT GUIDELINES In order to minimize costs of all concerned, avoid the duplication of effort, and ensure mutual understanding, the following will not be provided by the Consultant and will be, when necessary, provided by Carlsbad CVB: 1. Conference rooms or meeting facilities from time to time with seating 5-20 participants. 2. Costs associated with creating a non-profit corporation. 3. Costs associated with developing a hnal contract, if required, between the non-profit and the lead agency. We have projected a specific amount of time for the development of the BID. It is assumed that BID development will not exceed the budgeted time and the budgeted number of meetings. If unanticipated comments result in additional time or meetings beyond that which has been budgeted, we wdl propose to renegotiate terms. Factors that would increase the scope of work and estimated costs outlined above include: additional public and/or private meetings not described in the proposal; analysis of additional issues above those discussed in this proposal; or lack of business owner or steering committee involvement in the adoption of the project. E. PROPERTY INFORMATION AND DATABASES The database created for this project relies on information supplied by Carlsbad CVB and the City. Errors from these government agencies can and will occur. While the Consultant Team will do its utmost to correct any errors, it is acknowledged that owner business data will always contain data information errors. Downtown Resources recommends that the Carlsbad CVB continue to pursue other data correction strategies, during and after formation, including mailings and error checking by City and County officials. Thank you for the opportunity to submit this proposal. We look forward to talking to you further about your proposed project. CARLSBAD TOURISM BID PROJECT DRAFT PROJECT SCHEDULE February 2005 Set Workplan and Timeline Identify and Meet with Formation Steering Committee Carlsbad CVB Begin Database Tasks February 2005 March - April 2005 Carlsbad CVB Begin Hotel Owner Outreach Carlsbad CVB Begin One-On-One Meetings with Hotel Owners Outreach to City Develop and Release Draft ROI Finalization of ROI DTR Draft Resolutions of Consent DTR Draft Resolution of Intention Begin Consent Hearings at City May -June 2005 Resolution of Intention Hearing at County Public Meeting at the County DTR Draft Formation Ordinance Schedule Final Public Hearing at the County DOWNTOWN RESOURCES CLIENT LIST (PARTIAL) BID and Special District Related Proiects Canoga Park, Canoga Park, California Capitol Station District, Sacramento, California Central City East Association, Los Angeles, California Central Core Restoration Corporation, Vallejo, California Central Roseville Partnership, Roseville, California City of Concord, Concord, California City of Folsom, Folsom, California City of West Hollywood, Sunset Strip Business Owners Confederation of Downtown Associations, Los Angelei California Downtown Las Vegas Partnership, Las Vegas, Nevada Downtown Long Beach Associates, Long Beach, California Downtown Los Angeles Property Owners Association (DPOA) (Fashion District) Downtown Placerville Management District, Placerville, California Downtown Sacramento Partnership, Sacramento, California Downtown San Diego Partnership, San Diego, California Downtown Stockton Alliance, Stockton, California Figueroa Corridor Improvement Association, Los Angeles, California The Florin Road Partnership, Sacramento, California Fulton Avenue Improvement Association, Sacramento, California Georgetown Revitalization Committee, Georgetown, California Granada Hills Improvement Association, Granada Hills, California Midtown Business Association, Sacramento, California Old Pasadena Management District, Pasadena, California Riverside Downtown Partnership, Riverside, California San Diego BID Council, San Diego, California San Jose Downtown Association, San Jose, California Stockton Boulevard Partnership, Sacramento, California Studio City Improvement Association, Studio City, California Sunrise Marketplace, Citrus Heights, California Tarzana Improvement Association, Tarzana, California Town of Locke, Locke, California Town of Loomis, Loomis, California Town of Truckee, Truckee, California Waikiki Improvement Association, Waikiki, Hawaii West Sacramento Downtown Association, West Sacramento, California Los Angeles, California Our Professionals John A. Larnbeth Mr. Lambeth, a real estate attorney and President of Downtown Resources, specializes in the creation and operation of business improvement districts. Mr. Lambeth was the primary author of the "Property and Business Improvement District Law of 1994." He assisted with the creation of the first property-based business improvement districts in California -- the Downtown Sacramento Partnership and the Downtown Los Angeles Property Owners Association. Mr. Lambeth has been involved in all aspects of BID formation including outreach to property and business owners, plan development, and petition / ballot campaigns. Mr. Lambeth serves as the Regional Coordinator for the International Downtown Association. Mr. Lambeth formerly served as clerk to the Honorable Malcolm M. Lucas, Chief Justice of the California Supreme Court. Lisa Nava Ms. Lisa Nava, Downtown Resources, has worked on several PBID formation projects. Lisa has been involved in every aspect of PBID and BID formation and renewal including: extensive experience with property related databases including development and maintenance, developing equitable assessment formulae, negotiating consensus among disparate property and business owners, creating baseline services agreements, and managing petition and ballot "campaigns" to gain BID and PBID approval. She has assisted in owner focus groups and understands the challenges associated with forming an owner collaborative. Lisa also works closely with city and county elected officials and agencies to get BIDS and PBIDs through the public approval process. Ms. Nava has a background in sales and marketing as well as working with downtown organizations relating to redevelopment. Toshyona Olive Ms. Olive, Downtown Resources, provides support to our BID and PBID formation. Ms. Olive formerly served as an Executive Director for a small Chamber of Commerce and Vice President of Administration in a Los Angeles area Chamber. She has been involved in many projects relating to business and community improvement, as well as, working with local charities. February 17,2005 Mr. Ray Patchett City Manager City of Carlsbad, City Hall Carlsbad, CA 92008 Y rlsbad - 1s ca I ifo r n 1 a Dear Mr. Patchett: In addition to the request for the funding of consulting services that was submitted to you on January 26,2005, the Carlsbad Convention and Visitors Bureau would like to make an additional request for funding to include consulting services of Strategic Marketing Group (SMG). Attached is a proposal that was requested by the Carlsbad Convention and Visitors Bureau. The project goal is, “To provide the Carlsbad Convention and Visitors Bureau and the local tourism community, with a comprehensive plan for future tourism promotion efforts utilizing anticipated HBIDhds. ” We have met with lodging representatives, and there has been an expressed interest to have an outside firm review the bureau’s current operation and to recommend how best to maximize the use of BID funds for the exclusive benefit of the District. We happen to agree. SMG is well qualified to meet this charge, and we are asking the Carlsbad City Council to cover the cost of services outlined in the attached proposal. It is anticipated that this project can be completed in 45-60 days. As with the proposal that we submitted to you on January 26,2005, we believe that time is of the essence as the process of the BID moves forward. The services as outlined by SMG will complement those of Downtown Resources. It is understood that a staff recommendation will be required, and we stand ready to provide any and all additional information that will help to move our request forward. Questions can be directed to Patrick Fearn (760) 727-5 100, ext. 102, or Kurt Burkhart, (760) 434-6093. Thank you very much. Sincerely, Patrick Fearn, Chairman Carlsbad Convention & Visitors Bureau Kbrt Burkhart, Executive Director Carlsbad Convention & Visitors Bureau Enclosure: Proposal, 13 pages cc: Mayor Council Members Carlsbad CVB Board of Directors Carlsbad Chamber of Commerce - Chairman, PresidentKEO Carlsbad Convention 81 Visitors Bureau 400 Carlsbad Village Drive, Carlsbad, California 92008 (760) 434.6093 FAX (760) 434.6056 www.visitcarkbad.com infoQvisitcarIsbad.com CVCB HBlD Prospectus Introduction Overview: For many years tourism funding for Tourism Promotion Agencies have primarily been funded through the collection of Transient Occupancy Tax (Room Tax) levied on visitors when they stay at a local lodging facility. The tax is then collected by the appropriate jurisdiction, either County of City, and the collected tax funds flow into a general fund. At that point local jurisdictions have funded tourism by re-investing those collected funds towards programs implemented by tourism promotion agencies. In some cases the amount funded is done by formula, but in many cases it is done based on competing budget priorities, oftentimes against popular programs like police and fire protection, recreation, etc. To date, many tourism promotion organizations have been able to maintain funding and in some cases increase funding levels. But times are changing. Over the past five years, the State of California has faced significant funding challenges. State politicians have increasingly turned to appropriating local funds as one method of balancing the State budget. This action has put increased pressure on local cities and counties, and as a result many regions have seen tourism funding reduced or cut entirely. To combat this trend and restore a source of funds that cannot be allocated for other purposes, many tourism communities are implementing Hotel Business Improvement Districts (HBIDs). These improvement districts have been formed in a number of situations by local lodging operators to specifically fund tourism promotion efforts. In the HBlD process local lodging operators agree to self-assess themselves, collect the money and pass the funds onto a designated tourism promotion organization, oftentimes the Visitors and Convention Bureau. This process has already been implemented in a number of communities in California and will continue to occur in the future. Quite a few communities are planning to develop a HBlD as a hedge against potential future take aways that would threaten tourism-based economies. At SMG we view this process as an investment. Not unlike the investment an individual might make with their own hard-earned dollars. As such, our approach is to develop a market forward plan and approach for your community. In this plan SMG seeks to clearly identify the potential challenges, opportunities marketing programs, organizational structure and Return on Investment (ROI) your community may achieve with a HBID. The results and findings of this prospectus should aid potential participants in assessing the viability of this tourism investment. The benefits include the following: 0 A focused tourism community approach to tourism promotion 0 The ability to show potential supports a businesdmarketing plan i.e., what the plan will 0 The ability to stay outside the traditional municipal budgetinglfunding process. do, how much it will cost and what the return might be By developing a prospectus before stepping into the HBlD process the HBlD proponents' community now has the ability to get answers to many questions that will arise throughout the process. 2 CVCB HBlD Prospectus Project Goal & Objectives: A. Project Goal To provide the Carlsbad Visitors and Convention Bureau and the local tourism community, with a comprehensive plan for future tourism promotion efforts utilizing anticipated HBlD funds. B. Project Objectives 1. Solicit input on the development of a marketing planktrategy for the Carlsbad Tourism Community assuming the projected HBlD funds are realized. 2. Identify a transition strategy from the current VCB status to fully funded under the HBID. 3. Identify and assess potential cooperative opportunities with other area VCB’s. 4. Develop 3 &5 year Return on Investment (ROI) models to illustrate the impact of the HBlD funds on the lodging industry. CVCB HBlD Prospectus Project Scope A. Project Scope: The HBlD Prospectus project scope includes three distinct phases: information & data collection, a review of the collected Information, and the development of the final HBlD prospectus. Project Scope Information & Data Information & Data Development of the Review and Analysis HBlD Prospectus Phase 1: Phase 2: Phase 3: Information & Data Collection Collection of all relevant primary and secondary information from key persons within the tourism industry. Information & Data Review and Analysis Review collected information and HBlD Prospectus Development Development of a final HBlD prospectus including a proposed marketing plan. The SMG Market Forward Plan is designed to answer several key questions including how would the dollars best be utilized and what is the potential Return on Investment? CVCB HBlD Prospectus Project Methodology A. Project Methodology: The SMG HBlD Prospectusm methodology is designed to provide the tourism community with comprehensive information regarding the development, implementation and return on a Business Improvement District. Phase 1: Information & Data Collection A. Primary Information & Data Collection 1.1 On site interviews with CVB Staff/Board (where appropriate) 1.2 On site interviews with key members of the lodging community within the county. Interview list will be geographic and include representatives from various lodging sizes. Note: All interviews would include but not be limited to, reasons for support or objection to the formation of a HBID, potential marketing activities etc., potential pitfalls and opportunities. B. Secondary Information and Data Collection 1.1 Current review of CVCB budget 1.2 Current review of CVCB marketing programs 1.3 Review of current funding and cooperative relationships Phase 2: Information & Data Review and Analysis 2.1 Assess collected primary and secondary information Phase 3: Proposed Post HBlD Market Forward Plan 3.1 Current situation analysis 0 Current CVCB budget 0 0 0 Current competitive set budgethevenue comparisons Review of current marketing programs Region and county-wide lodging/room nighthevenue inventory 3.2 Proposed new organizational goals & objectives 3.3 Identify core strategies designed to achieve organizational goals and objectives. CVCB HBlD Prospectus 3.4 Development of a marketing plan action steps designed to implement the identified strategies. 0 Target segments 0 Advertising 0 Sales 0 Public relations 0 Web/ Internet strategies 0 Measurements 0 Cooperative Relationships 3.5 Potential organizational structure changes designed to implement strategy and tactics. 3.6 Develop timelines and transition strategies 3.7 Identify and quantify potential Return on Investment (ROI) based on 3- and 5- year scenarios 3.8 Recommendations 14 6 CVCB HBlD Prospectus 0-30 Days lnformation & Data Collect ion Project Deliverables and Timeline 30-60 Days A. Project Deliverables Based upon this submitted proposal, SMG will provide the following project deliverables: 3 Carlsbad Visitor and Convention Bureau post HBlD plan including all elements of the project methodology 3 Recommendations and related tourism counsel for the successful passage of your HBlD and the development of your organizations new funding. B. Project Timeline The project timeline is proposed as follows and subject to agreement with the Carlsbad Visitors and Convention Bureau. We anticipate the project to be complete in 45-60 days Project Timeline I lnformation & Data Analysis 1- I I Final HBlD Prospectus I I I - I 1 Follow-up CVCB HBlD Prospectus About the Strategic Marketing Group The Strategic Marketing Group (SMG), a California Limited Liability Corporation, is located at 2048 Dunlap Drive, Suite 11, South Lake Tahoe, CA and is a marketing advisory firm specializing in providing marketing research, strategic planning and strategy development services for the travel, tourism and recreation industries. SMG prides itself on providing its clients with insights and solutions for effective marketing strategies. We view ourselves as strategists that assist our clients by understanding bigger issues necessary for their success. SMG has access to a wide variety of tourism industryharketing research resources to help ensure our clients receive state-of-the-art solutions. The firm has attracted a roster of blue chip public and private sector clients including visitor and convention bureaus, hotels, lodging management companies, casinos, ski resorts, economic development agencies and chambers of commerce. SMG brings a wealth of skills, experience and knowledge to this project, including the following: Experienced in the development of the South Lake Tahoe city-wide Business Improvement District Experienced in the development and implementation of several successful Tourism Marketing Plans for Direct Marketing Organizations (DMOs.) Experience in developing integrated marketing programs including competitive strategy development, creative concept development and execution, target market identification, online and offline media planning, cooperative marketing partnerships, financial models, fulfillment mechanisms and measurement systems. Specific experience with and a thorough understanding of the impact of the lodging and recreation segments within tourist destinations. Extensive experience in working with public sector tourism organizations. Appreciation and commitment for balancing tourism with the protection of the environment and the local community’s values and needs. Expansive knowledge and experience in dealing with a variety of marketing and political issues. Extensive experience in developing tourism impact and ROI planning models. A thorough understanding of the California and national economy, travel trends and impacts. a\ 8 CVCB HBlD Prospectus A. Consultant Profile SMG has assembled a team with unmatched qualifications to implement this project including: Cad Ribaudo - Project Director Carl is the founder of the Strategic Marketing Group and has over 20 years of experience in the tourism and travel industry. Carl holds an MBA degree and has authored a variety of articles and white papers related to the tourism industry (which can be found online at www.smaonline.net). Carl has worked extensively as a consultant in the visitor and convention bureau industry as well as having previously been the Director of Sales & Marketing for a DMO. Currently, Carl serves on the Board of Directors for the Lake Tahoe Visitors Authority and South Lake Tahoe Chamber of Commerce. Carl is authorized to negotiate contract terms and enter into any legally binding commitment. B. SMG Resources SMG has access to a wide variety of tourism industry/marketing research resources to help ensure our clients get state-of-the-art solutions. These resources include the following: SMG Marketing Issues Survey swRit$$$S ISSUES SMG White Papers SMG Online A A bi-annual study of California visitor and convention bureaus designed to identify and understand the marketing strategies and resources they have employed over the past 12 months. An outstanding resource for any tourism promotion organization wishing to benchmark its marketing activities, and to assess current trends in the travel industry. SMGs in-house research conducted on a variety of topics related to tourism and competitive strategy. Topics have included Marketing Niches as a Strategic Tool, Game Theory, Ecotourism, Co-Branding and many more. The SMG Web site, www.smaonline.net, indudes a variety of resources and information related to travel, tourism and recreation marketing issues as well as an extensive list of SMG marketing services. CVCB HBlD Prospectus Other Resources 0 Harvard Business Review Index An index of all Harvard Business School case studies and articles that provide additional background on situations similar to our clients. McKinsey Quarterly McKinsey and Company articles and reports that provide pertinent information on marketing and strategy development for the travel and tourism industries. 0 Industry Resources All travel industry resources, including TIA. a3 10 CVCB HBlD Prospectus SMG References and Related Experience Tourism Strateuic Marketing Plan DeveloDment Fairfield Hotel Association 2200 Gateway Court Fairfield, CA 94533 Contact: Kevin Johnson Completed first ever marketing plan for Hotel Business Improvement District Coalition of Chambers of Commerce of lnyo County (Coalition) 168 N. Edwards St. (County of lnyo Ofice) Independence, CA 93526 Contact: Leann Fields, Coalition Chair (760) 937-1 591 Contact: Ted Williams, lnyo County Supervisor (760) 872-091 7 Completed county-wide tourism assessment and long-term tourism marketing plan 2004. Sonoma County Economic Development 401 College Ave. #D Santa Rosa, CA 94501 Contact: Ben Stone, Executive Director (707) 524-71 70 Completed county-wide tourism strategic plan 1999. San Luis Obispo County Visitors and Convention Bureau 1037 Mill Street San Luis Obispo, CA 93401 Contact: Jonni Biaginni (805) 541-8000 Completed county-wide tourism strategic marketing plan 2000. Ventura Visitors and Convention Bureau 89 S. California Street Ventura, CA 93001 Contact: Jim Luttjohann (805) 648-2075 Completed tourism sales & marketing plan 2002. Research Related Mono County 437 Old Mammoth Road Mammoth Lakes, CA 93546 Contact: Jeff Irons (760) 924-1 81 2 Developed and implemented advertising conversion study in 2004, followed by a contract to implement a Visitor Center feasibility study in 2005. Lake Tahoe Visitors Authority 1156 Ski Run Blvd. South Lake Tahoe, CA 96158 Contact: Sue Barton, Sales & Administrative Director (530) 544-5050 Ongoing visitor profile marketing research for South Shore destination. CVCB HBlD Prospectus Carson City Visitors and Convention Bureau 1900 S. Carson Street, Suite 200 Carson City, NV 89701 Contact: Candy Duncan, Executive Director (775) 687-741 0 Visitor profile study for destination. Yosemite Sierra Visitors Bureau 41969 Highway 41 Oakhurst, CA 93644 Contact: Dan Carter (559) 683-4636 Research and analysis to develop second season for Southern Yosemite corridor market. CooDerative Marketing Plan Imdementation 8, DeveloDment Golf the High Sierra P.O. Box 300 Clio, CA 96106 Contact: Doug Flynn (800) 332-4295 Developed and implemented region-wide cooperative golf marketing program targeted to attract destination visitors. Activities include marketing plan development and implementation, creative, Web site development and sales program creation. This program is ongoing. Ski Lake Tahoe P.O. Box 2180 Stateline, NV 89449 Contact: John Wagnon (775) 586-7000 Developed and implemented national and international cooperative marketing program designed to increase destination skiers to Lake Tahoe. Activities include ongoing research, media planning, public relations, Web site development and creative message development. Ski Lake Tahoe has been a long-term client of SMG since 1995. California Association of Bed and Breakfast Inns (CABBI) 2715 Porter Street, Suite 104 Soquel, CA 95703 Developed long-term marketing plan for this 300+ cooperative marketing association in an effort to increase awareness and demand of its member inns. Since 2002, SMG has assisted CABBI with the implementation of the strategic marketing plan including creative development of ads and rack cards, media planning, public relations, strategic cooperative marketing program development, Web site development, measurement systems and sales programs. CVCB HBlD Prospectus Project Fees The cost to develop a HBlD prospectus for the completion of this project is as follows: Phase I: Information & Data Collection A. Primary Information & Data Collection 0 On site Interviews in Carlsbad 6. Secondary Information and Data Collection 0 Current review of CVCB budget by revenue sources 0 Current Review of CVCB marketing activities 0 Competitive budget review with comp set (20 Hours @$125) Phase 2: Information & Data Review and Analysis 0 Assess collected primary and secondary information & data (20 Hours @ $125) $2,500 $1,250 $2,500 Phase 3: HBID Prospectus Development 0 Current Situation Analysis 0 Proposed Goals & Objectives 0 Development of a marketing plan 0 Identify and quantify potential Return on Investment (ROI) 0 Recommendations (30 Hours @ $125) $3,750 Total $lO,OOO * Does not include anticipated travel costs to Carlsbad Note SMG can arrange a flexible payment program to meet your needs. Additionally, to help ensure the success of the HBlD marketing efforts, SMG will provide ongoing counsel at no extra charge for up to 12 months. This counsel includes general information related to the implementation of the marketing strategy as well as specific issues related to the marketing plan and its components. This project comes with the Strategic Marketing Group guarantee for your total satisfaction.