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HomeMy WebLinkAbout2012-09-25; City Council; 21015; Report on Formation Golf Ldging Business CGLBIDCITY OF CARLSBAD - AGENDA BILL 11 AB# 21.015 Report on Formation of the Carlsbad GoK Lodging Business Improvement District (CGLBID) DEPT. DIR^ MTG. 9/25/12 Report on Formation of the Carlsbad GoK Lodging Business Improvement District (CGLBID) CITY ATTY. (^^^ DEPT. FIN Report on Formation of the Carlsbad GoK Lodging Business Improvement District (CGLBID) CITY MGR. {u RECOMMENDED ACTION: Receive the report and accept the public comnnent on the Formation of the Carlsbad Golf Lodging Business Innprovement District (CGLBID). ITEM EXPLANATION: Background: For ainnost 50 years the City of Carlsbad financially supported community promotion and visitor services as a way to develop tourism and assist Carlsbad visitors. Then in 2005, the City was approached by the Carlsbad Convention and Visitor's Bureau and Carlsbad hoteliers about the formation of a Carlsbad Tourism Business Improvement District (CTBID) as allowed under the Parking and Business Improvement Area Law of 1989 (Streets and Highway Code section 36500 et seq.) The proposal to form the CTBID was based on the concept of collecting an assessment of $1.00 per room night from all hotel operators within the City to fund and support tourism promotion activities. The assessment would be passed through to the hotel guest as opposed to being paid directly from the hotel's operating revenues. The levy would be imposed on all existing and future hotels. On November 15, 2005 the City Council adopted Ordinance No. NS-778, establishing the CTBID, and setting the boundaries, levy, and establishing an advisory board to provide oversight and recommendations to the City Council. The effective date for the CTBID was January 1, 2006. In April of this year, Grand Pacific Palisades Hotel and the Carlsbad Sheraton which are both part of Grand Pacific Resorts (GPR), proposed formation of a new voluntary business improvement district for Carlsbad, to be called the Carlsbad Golf Lodging Business Improvement District (CGLBID). The purpose of the CGLBID would be to promote golf- related overnight stays at participating hotels in Carlsbad. This district would be separate from the existing CTBID. Like the CTBID, the creation of CGLBID would be formed under Section 36500 of the California Streets and Highways Code (known as Parking and Business Improvement District Area Law of 1989). The GPR proposal was presented to Council at the July 10, 2012 Council meeting, and Council directed staff to bring back the Resolution of Intention (ROI), declaring the Council's intention to establish the CGLBID. The ROI was adopted by the City Council on September 11, 2012. DEPARTMENT CONTACT: Cheryl Gerhardt, 760-602-2430, Cheryl.qerhardt@carlsbadca.qov FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED • CONTINUED TO DATE SPECIFIC • DENIED • CONTINUED TO DATE UNKNOWN • WITHDRAWN • RETURNED TO STAFF COUNCIL RECEIVED THE ^ef REPORT/PRESENTATION ^ ^ AMENDED • RETURNED TO STAFF COUNCIL RECEIVED THE ^ef REPORT/PRESENTATION ^ ^ RETURNED TO STAFF COUNCIL RECEIVED THE ^ef REPORT/PRESENTATION ^ ^ OTHER - SEE MINUTES • Page 2 CGLBID Proposal: The proposed CGLBID would be voluntary to lodging properties in the City of Carlsbad. Members that opt in would be assessed $2.00 per occupied room night to be paid to the city monthly through the current Transient Occupancy Tax collection process. The assessment would be passed through to the hotel guest as opposed to being paid directly from the hotel operating revenues. These funds would be used to promote golf-related overnight stays at participating hotels in Carlsbad. Each assessed business would determine how to spend the funds collected by their respective property provided the expenditures are for an approved golf related expense. Reimbursement of these expenses would be made quarterly upon approval from the advisory board up to the amount collected per property minus administrative fees. CGLBID Formation Process: Public Meeting: In addition to adoption of the ROI, the Parking and Business Improvement Area Law of 1989, requires a Public Meeting be held to provide public information and comments on the CGLBID, and levy the assessments. At the Public Meeting, the public will be given an opportunity to hear a report on the CGLBID and provide their comments on the formation of the CGLBID. Public Hearing: Subsequent to the Public Meeting, the City Council will hold a Public Hearing on the CGLBID. The purpose of the Public Hearing is for the City Council to take testimony of all interested persons for or against the establishment of the CGLBID, the extent of the areas for inclusion in the assessment, or the types of activities proposed for funding from the assessment. At the conclusion of the Public Hearing, a protest vote is conducted. A protest vote against the establishment of the CGLBID, the extent of the area, or the proposed activities must be in writing, and may only be accepted if the person signing is the business owner of record, or an authorized representative. If at the conclusion of the Public Hearing, there are protests by the owners of the businesses within the CGLBID that will pay fifty percent (50%) or more of the total assessments of the entire CGLBID, no further proceedings to create the CGLBID shall occur for a period of one-year from the date of the protest vote. If a majority of the written protests are related to a proposed activity of the CGLBID, the ri that activity shall not be included in the CGLBID. If there are no protest votes in excess of the 50% requirement, then the City Council may create the CGLBID. CGLBID Advisory Committee: The Parking and Business Improvement Area Law of 1989, requires an Advisory Board to be appointed by the City Council. The Council may act as its own Advisory Board, appoint an existing board, or select other individuals to serve in that capacity. The CGLBID Advisory Board would be required to submit an annual report, which would include any proposed changes in the boundaries, assessment formula, estimated cost of conducting activities, the amount of surplus/deficit revenues to be carried over, contributions and other items of interest to the CGLBID for the upcoming year. The report may be approved as presented or amended by the City Council. Once the report has been approved for the upcoming year, the City Council adopts a resolution of intention to levy an annual assessment for the upcoming year. The City Council will then schedule and conduct a public hearing to set the assessment, take public comment, make modifications as necessary, and adopt the new resolution of intention. Pages FISCAL IMPACT: The amount of revenue collected by the district will depend on the number of hotels that opt in to the district. Preliminary assessment revenue estimates, that include the Sheraton and the Grand Pacific Palisades Hotel, are $200,000. Administrative fees that would be paid to the city for collection and administration would be approximately $8,000 (4 percent). The remaining $192,000 would be available to the hotels to promote golf related overnight stays. ENVIRONMENTAL IMPACT: Pursuant to Public Resources Code section 21065, this action does not constitute a "project" within the meaning of CEQA 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, and therefore does not require environmental review. EXHIBITS: 1. Agenda Bill #21,005, dated 9/11/12, Carlsbad Golf Lodging Business Improvement District (CGLBID) 3 EXHIBIT 1 CITY OF CARLSBAD - AGENDA BILL 21.005 AB# MTG. DEPT. FIN 9/11/12 Carlsbad Golf Lodging Business Improvement District (CGLBID) DEPT. DIR. CITY ATTY. CITY MGR. RECOMMENDED ACTION: Adopt Resolution No. 2012-221 a resolution of intention of the City Council of the City of Carlsbad, California, declaring the intention of the City Council to establish the Carlsbad Golf Lodging Business Improvement District (CGLBID), fixing the time and place of a public meeting and a public hearing thereon and giving notice thereof. ITEM EXPLANATION: In April of this year, Grand Pacific Palisades Hotel and the Carlsbad Sheraton which are both part of Grand Pacific Resorts (GPR), proposed formation of a new voluntary business improvement district for Carisbad, to be called the Carlsbad Golf Lodging Business Improvement District (CGLBID). The purpose of the CGLBID would be to promote golf-related overnight stays at participating hotels in Carlsbad. This district would be separate from the existing Carisbad Tourism Business Improvement District (CTBID) which was formed in 2005. Like the CTBID, the creation of CGLBID would be formed under Section 36500 of the California Streets and Highways Code (known as Parking and Business Improvement District Area Law of 1989). The GPR proposal was presented to Council at the July 10, 2012 Council meeting, and Council directed staff to bring back this resolution of intention, declaring the Council's Intention to establish the CGLBID. In summary, the proposal from GPR is, with the approval of the City Council, to form a BID that would promote golf-related overnight stays at participating hotels in Carisbad. Participation in this district would be voluntary to lodging properties in the City of Carlsbad. Members that opt in would be assessed $2.00 per occupied room night to be paid to the city monthly through the current Transient Occupancy Tax collection process. The assessment would be passed through to the hotel guest as opposed to being paid directly from the hotel operating revenues. Each assessed business would determine how to spend the funds collected by their respective property provided the expenditures are for an approved golf related expense. Reimbursement of these expenses would be made quarteriy upon approval from the advisory board up to the amount collected per property minus administrative fees. The BID creation process includes the establishment of an advisory board that is responsible for the preparation of an annual budget and report on operations. The budget and report are used each year by the City Council to levy the assessment for successive fiscal years. FOR Cny CLERKS USE ONLY. COUNCIL ACTION: APPROVED • CONTINUED TO DATE SPECIFIC • DENIED • CONTINUED TO DATE UNKNOWN • WITHDRAWN • RETURNED TO STAFF • AMENDED • COUNCIL RECEIVED THE D REPORT/PRESENTATION OTHER-SEE MINUTES • 1 Page 2 The 1989 law states that the City Council is responsible for the appointment of the Advisory Board. As proposed, the City Council would establish an advisory board made up initially of three members, suggested to be (a) a golf course representative, (b) two member representatives, and (c) a non-voting city staff member. This board may be appointed at any time prior to the completion of the public hearing. The CGLBID is to be renewed on a year-to-year basis solely at the discretion of the Carlsbad City Council. However, the initial term is proposed to be for two years. FISCAL IMPACT: The amount of revenue collected by the district will depend on the number of hotels that opt in to the district. Preliminary revenue estimates, that include the Sheraton and the Grand Pacific Palisades Hotel, are $200,000. Administrative fees that would be paid to the city for collection and administration would be approximately $8,000 (4 percent) or actual costs if higher. The remaining $192,000 to be used by these hotels to promote golf related overnight stays. ENVIRONMENTAL IMPACT: Pursuant to Public Resources Code section 21065, this action does not constitute a "project" within the meaning of CEQA 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, and therefore does not require environmental review. EXHIBITS: Resolution No. 2012-221 a resolution of intention of the City Council of the City of Carisbad, California, declaring the intention of the City Council to establish the Carisbad Golf Lodging Business Improvement District (CGLBID), fixing the time and place of a public meeting and a public hearing thereon and giving notice thereof. 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 RESOLUTION NO. 2012-221 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA. DECLARING ITS INTENTION TO FORM THE CARLSBAD GOLF LODGING BUSINESS IMPROVEMENT DISTRICT, FIXING THE TIME AND PLACE OF A PUBLIC MEETING AND PUBLIC HEARING THEREON, AND GIVING NOTICE THEREOF WHEREAS, the City of Carisbad ("City") desires to establish a Business Improvement District ("BID") which shall be called the Carisbad Golf Lodging Business Improvement District ("CGLBID") and levying an assessment on lodging businesses within the CGLBID boundaries; and WHEREAS, the Parking and Business Improvement Area Law of 1989, Streets and Highways Code §36500 et seq., authorizes cities and counties to establish partying and business improvement areas for the purpose of tourism promotion; and WHEREAS, lodging business owners within the proposed CGLBID have requested the Carisbad City Council establish such an improvement area; and WHEREAS, lodging businesses have facilitated the request to form the CGLBID and the City Council desires to establish an advisory board to make reports and recommendations to it regarding the activities provided by the proposed CGLBID. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carisbad, California, as follows that: 1. The above recitations are true and correct. 2. The City Council declares its intention to form the CGLBID and to levy and collect assessments within the CGLBID boundaries pursuant to the Partying and Business Improvement Area Law of 1989, Streets and Highways Code §36500 et seq. The boundaries of the CGLBID shall be the boundaries of the City of Carlsbad. The district shall include all lodging businesses which have 6 1 voluntarily submitted a signed request to the City Clerk to be included. Once 2 a lodging business has submitted a signed request to be included, the assessment shall be mandatory. 3. The name of the area shall be the Carlsbad Golf Lodging Business Improvement District. The District shall be created for a one-year term and may be renewed annually in accordance with Streets and Highways Code §36532. 3 4 5 6 7 8 9 4. The City Council intends to form the CGLBID to promote golf-related 10 tourism within the boundaries of the CGLBID, as well as marketing related 11 capital improvements such as golf-related signage, golf-related equipment, and to pay for related administrative costs. 5. The proposed CGLBID will include all lodging businesses within the City of Carisbad that have elected to be part of the district. Businesses may elect to participate in the district by submitting a written letter to the City requesting inclusion. Participating businesses will be listed in the annual report lg submitted to the City. New businesses opening during the tenn of the district 19 will receive notice of the opportunity to be included at least thirty days prior to 20 the annual hearing. 6. The assessment is proposed to be levied on all participating lodging businesses, existing and in the future, within the CGLBID based upon $2.00 per occupied paid room per night. Except where funds are othenA/ise available, an assessment wilt be levied annually to pay for the programs and activities within the district. New lodging businesses within the CGLBID boundaries, which elect to participate in the district, will not be exempt from 13 14 15 16 17 22 23 24 25 26 27 28 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 the levy of assessment as authorized by Streets and Highways Code §36531. The CGLBID assessment shall not include stays over thirty days, or stays by any federal or state employee when on government business. 7. The total CGLBID assessment collected in year one is estimated to be $200,000. The funds raised shall be spent to promote golf-related overnight stays within the boundaries of the CGLBID and pay for related administrative costs. The assessments paid by each assesse shall be fonn/arded to that assesse to provide the golf-related stay tourism promotion services. 8. Funds remaining at the end of any CGLBID term may be used in subsequent years in which CGLBID assessments are levied as long as they are used consistent with the requirements of this Resolution. Upon withdrawal of any business from the CGLBID, any remaining funds collected from that business will be spent consistent with the provisions of the Carisbad Tourism Business Improvement District. Upon temiination of the CGLBID, any remaining funds will be spent consistent with the provisions of the Carisbad Tourism Business Improvement District. 9. The City of Carisbad will collect the assessment on a monthly basis from the lodging businesses within the CGLBID. The City of Carlsbad will retain four percent (4 percent) or actual costs if higher of the amount collected to cover costs of collection. 10. Each lodging business assessed by the CGLBID shall submit a quarterly accounting of expenses for CGLBID activities to the advisory board. The advisory board shall review the quarteriy accounting for compliance with CGLBID regulations and report the amount expended on allowed CGLBID 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 activities to the City. Upon approval by the advisory board, the City shall reimburse each business for CGLBID-activlty-related expenses in an amount not to exceed the amount of assessment collected from that business minus administrative costs of four percent (4 percent) or actual costs if higher. 11. The City Council shall make all appointments to the CGLBID advisory board. There shall be at least three, and no more than seven, members appointed to the advisory board. Initially the board's three members would be a golf representative, two member representatives and a non-voting city staff member. 12. The CGLBID advisory board shall submit an annual report, which shall include a budget for operations and an identification of the marketing efforts to be undertaken by the CGLBID for the ensuing calendar year, to the Carisbad City Council pursuant to Streets and Highways Code §36533. The annual report will include a listing of the lodging businesses proposed to be included in the CGLBID for the following year and a signed affirmation of Intent to be Included In the CGLBID for the following year from each business. 13. The time and place for a public meeting for comments on the proposed CGLBID and the levy of assessments are set for September 25, 2012 in the City Council chambers located at 1200 Carisbad Village Drive, Carlsbad, CA 92008. 14. The time and place for the public hearing to form the CGLBID and levy assessments are set for November 6, 2012 In the City Council chambers located at 1200 Carisbad Village Drive, Carisbad, CA 92008. 1 15. At the public meeting and public hearing the testimony of all interested 2 persons for or against forming the CGLBID, the extent of the CGLBID, or the furnishing of specified types of improvements or activities will be heard. 16. A protest against forming the CGLBID, the extent of the CGLBID, or the furnishing of a specified type of program or activity, as provided in Streets and Highways Code §36524, may be made in writing. To count in a protest against the CGLBID, a protest must be made in writing. A written protest may 9 be withdrawn, in writing, at any time before the conclusion of the public 10 hearing. Each written protest shall contain a description of the business in 11 which the person signing the protest is interested, sufficient to identify the 12 business and its address. If the person signing the protest is not shown on the official records of the City of Carlsbad as the owner of the business, then the protest shall contain or be accompanied by written evidence that the person is the owner of the business. If the owner of the business is a corporation, LLC, partnership or other legal entity, the authorized representatives for the entity shall be authorized to sign the protest. Any protest as to the regularity or evidence of the proceedings shall be in writing 20 and clearly state the inregularity or defect to which objection is made. Written 21 protests must be received by the Clerk of the City of Carlsbad before the 22 close of the public hearing scheduled herein, and may be delivered or mailed 2^ to the City Clerk at 1200 Carisbad Village Drive, Carisbad, CA 92008. 24 17. If, at the conclusion of the public hearing, there are of record written 25 protests by the participating owners of businesses within the CGLBID that will 26 collectively pay fifty percent (50 percent) or more of the total CGLBID 28 13 14 15 16 17 18 19 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 assessment, no further proceedings to fomri the CGLBID shall occur for a period of one year from the date of the finding of a majority protest. If the majority of written protest is only as to a proposed improvement or activity, then that type of improvement or activity shall not be included in the CGLBID. 18. Further information regarding the proposed CGLBID may be obtained from the City Cleric, at 1200 Carisbad Village Drive, Carlsbad, CA 92008. 19. The City Clerk is instructed to provide notice of the public meeting and public hearing as follows: a. Publish this Resolution of intention in a newspaper of general circulation in the City of Carlsbad at least seven days before the hearing; and b. Mail a complete copy of this Resolution of Intention to each and every business owner proposed to be assessed in the CGLBID within seven days of the adoption of this Resolution. 20. This resolution shall take effect immediately upon its adoption, and the City Clerk shall certify the vote adopting this resolution. 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 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carisbad on the 11th day of September 2012, by the following vote to wit: AYES: NOES: Council Members Hall, Kulchin, Blackburn, Douglas and Packard. None. ABSENT: None. MATT HALL, Mayor ATTEST: LORRAINE M. WOOD, City Cleric (SEAL) Carlsbad Golf Lodging Business Improvement District (CGLBID) Public Meeting September 25, 2012 Tourism Business Improvement Districts •Tourism business improvement districts are allowed under the California Parking and Business Improvement Area Law of 1989. –Defined assessment area –Annual assessment amount –Funding allowed for specific activities –Advisory Board –Public hearing process Background •January 2006 - CTBID was formed •April 2012 - Grand Pacific Resorts proposed formation of a new voluntary district (CGLBID) •July 10, 2012 - CGLBID was presented to Council. Staff was directed to bring back Resolution of Intention to form this new district. •September 11, 2012 – ROI was adopted Carlsbad Golf Lodging Business Improvement District •Special assessment used to promote golf related overnight stays in Carlsbad. – Lodging businesses could join voluntarily. –Assessment would be $2.00 per occupied room night. –Three member Advisory Board. –District will pay for administrative costs - 4% of assessment collected. 4 Continued: CGLBID –Funds collected/distributed separately for each participating business. –Funds to be reimbursed to lodging businesses are based on eligible expenditures. –Reimbursement on a quarterly basis subject to Advisory Board approval. –Annual renewal/2 year pilot. –Funds remaining at end of year carry over to next year. 5 Participating Hotels •City Clerk sent letter to all Carlsbad hotels on August 15, 2012 –outlined proposed district –allowed hotels until Sept 15, 2012 to opt in to district •Hotels requesting to opt in –Grand Pacific Palisades –Sheraton Carlsbad –Park Hyatt Aviara 6 CGLBID Hearing Process •Resolution of Intention - Sept 11, 2012 •Public Meeting – TONIGHT •Public Hearing – Nov 6, 2012 (Introduce Ordinance & appoint Board) •Adoption of Ordinance – Nov 27, 2012 •Effective date of CGLBID – Jan 1, 2013 7 Questions 8