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HomeMy WebLinkAbout2022-10-12; Carlsbad Tourism Business Improvement District; ; Grant PolicyCARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT Staff Report Meeting Date: Oct. 12, 2022 Subject: Grant Policy Recommended Action Adopt a resolution approving an updated policy for CTBID event and transportation-related grants. Item Explanation In November 2020, the CTBID increased the assessment from $1 per room night to 2% of gross room revenue for all properties within the district. This created a significantly larger budget for the CTBID to support tourism in Carlsbad. As part of the fiscal year 2022-2023 budget, the CTBID Advisory Board approved $1.5 million for grant programs that attract and continue events that generate visitor stays in Carlsbad, encourage the development of innovative tourism products, elevate Carlsbad's brand as a premier destination, and support the efficient movement of visitors around the destination. With the expansion of the CTBID grant budget, a new grant policy (Attachment A to Exhibit 1) is necessary to meet the goals set by the CTBID Advisory Board. This grant policy sets program parameters, eligibility requirements and restrictions of how grant funds may be used. Ba sed on previous CTBID Advisory Board discussions and with input from the Board's Grants Subcommittee, the grant policy includes program descriptions for several types of potential grants. For potential events that would be funded by grants, there are three categories that are included: placemaking events, brand elevating events, and room night-driving events. The total combined budget for event-related grants is $500,000. For destination transportation services, which would be services that prioritize the movement of tourists and visitors from Carlsbad hotels and resorts to attractions around the destination like l egoland, the beaches, Carlsbad Village, Carlsbad Premium Outlets, The Forum and The Shoppes at Carlsbad, the budget is $1 million. The grant policy also provides decision criteria for how grant applications will be judged, as well as the process by which they will be considered. For the staff review portion of the process, the policy includes Visit Carlsbad staff as a designated grant review contractor due to their expertise in destination marketing, familiarity with the destination and peak/off-peak seasons Oct 12, 2022 Item #3 Page 1 of 9 and their capacity to analyze impact and potential return on investment. Final decisions on grant applications would be made by the CTBID Advisory Board at one of their meetings. In a pivot from previous CTBID grant policies, this grant policy shifts how funds could be awarded, allowing greater flexibility for applicants to receive funds prior to an event taking place, yet maintaining accountability for the target ROI proposed in their grant application. The rationale for this change is that to attract marquis events to the destination, allowing grant funds to be used ahead.of the event may help attract additional funding or to secure the event taking place in Carlsbad. For room night-driving events, only 50% of funds could be paid prior to the event taking place, with the other 50% being dependent on actualized room nights meeting target expectations. Fiscal Impact Approving a new grant policy will allow staff to consider new grant requests, using funds already approved in the fiscal year 2022-2023 CTBID budget. Any individual grant requests will be considered by the Advisory Board prior to final approval and the expenditure of funds. Staff will report grant fund balances at subsequent CTBID Advisory Board meetings. 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. Attachments 1. Resolution Approving CTBID Grant Policy Oct 12, 2022 Item #3 Page 2 of 9 DocuSign Envelope ID: F832DC04-BF88-4BB4-BA8C-74E6E3D8CE77 RESOLUTION NO. 12 A RESOLUTION OF THE ADVISORY BOARD OF THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT ADOPTING A POLICY FOR CTBID EVENT AND TRANSPORTATION-RELATED GRANTS Exhibit 1 WHEREAS, the Carlsbad Tourism Business Improvement District (CTBID) Advisory Board is currently operating under the Parking and Business Improvement Area Law of 1989 ("89 Act"); and WHEREAS, the CTBID increased the assessment from $1 per room night to 2% of gross room revenues in November 2020, creating a larger budget to market Carlsbad as a destination; and WHEREAS, grants can play a role in attracting and continuing events that generate visitor stays in Carlsbad, encouraging the development of innovative tourism products, elevating Carlsbad's brand as a premier destination, and supporting the efficient movement of visitors around the destination; and WHEREAS, as part of the fiscal year 2022-2023 budget the CTBID Advisory Board approved $1.5 million for CTBID grant programs; and WHEREAS, a new policy is necessary to meet the intent of the CTBID Advisory Board to consider and approve event and transportation-related grants; and WHEREAS, the proposed CTBID grant policy (Attachment A) sets program parameters, eligibility requirements, and restrictions, for which grant funding may be requested. NOW, THEREFORE, BE IT RESOLVED by the Advisory Board of the Carlsbad Business Improvement District as follows: 1. The above recitations are true and correct. 2. The CTBID Advisory Board approves the CTBID Grant Policy included as Attachment A. DocuSign Envelope ID: F832DC04-BF88-48B4-BA8C-74E6E3O8CE77 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the Advisory Board of the Carlsbad Tourism Business Improvement District on the 12th day of October 2022, by the following vote, to wit: AYES: Becerra, Chapin, Stripe, Zupanski NAYS: None ABSENT: Canepa, Mason, Rauch TIM STRIPE, Chair FAVIOLA MEDINA, City Clerk Services Manager (SEAL) Attachment A Carlsbad Tourism Business Improvement District -Grant Programs Policy The Carlsbad Tourism Business Improvement District (CTBID) Grant Program is a program developed by the CTBID, an assessment district created by the hotels in Carlsbad to administer marketing and visitor programs to promote the City of Carlsbad as a tourism visitor destination and to fund projects, programs, and activities, including appropriate administrative charges, that benefit hotels within the boundaries of the District. The objectives of the grant program are to: • Fund programs or events that are going to increase overnight stays in hotels • Encourage the development of innovative tourism products • Elevate Carlsbad's brand as a premier destination • Promote collaboration within and across sectors of the tourism industry • Reach important travel segments such as multicultural, family and senior markets • Support the efficient and convenient movement of visitors around the destination Types of Projects Supported All CTBID grants fall into two categories. Grant applicants must ensure their application meets the goals and criteria of at least one category. 1. Events a. Placemaking Events (Up to $10,000/event) b. Brand Elevating Events (Up to $50,000/event) c. Room Night Driving Events (Up to $100,000/event) 2. Destination Transportation Services (Up to $1 million/year) All events, not including destination transportation services, applying must be accessible for public attendance. Private corporate events will not be considered for event grants but may apply for the Visit Carlsbad Group Incentive Program. Grants may not make up more than 25% of the total event revenue, e.g., an event with a budget of $100,000 may not apply for more than $25,000 in grant funding. Grant applicants may be a service provider, event organizer, hotel property/TBID contributor, other event consultant, or a combination of applicants. Placemaking Events Grant Amount Available: Up to $10,000 • Events that add to tourism, culture, or atmosphere of Carlsbad and enhance its position as a destination • Room nights associated with the event are encouraged but not required • All advertising must feature Carlsbad destination brand logo • Must promote or enhance tourism Brand Positioning Events Grant Amount Available: Up to $50,000 • Event further positions Carlsbad as a destination in alignment with key experience pillars: wellness, beach, go lf, arts/entertainment, outdoors, culinary, sustainability • Event preferably falls during an off-peak period and may be considered if it enhances occupancy or average daily rate • Grant funds can be spent on marketing and/or operational costs • Event must be promoted outside of the City of Carlsbad at least three (3) months prior to event. • Organizers must provide media schedule including media markets, dates, times, impressions/circulation, and audience demographics • All advertising must feature Carlsbad destination brand logo Attachment A • Event website must include "Travel" section featuring content about staying in Carlsbad and listing hotels or linking to Visit Carlsbad hotels webpage. Added weight will be given to events that include contracts/negotiated rates at Carlsbad hotels • Multi-year events may be eligible for 50% of the original grant for the second and third year the event takes place in Carlsbad if criteria is met in the previous year and pending fund availability Room Night Driving Events Grant Amount Available: Up to $100,000 • Event actualizes a minimum of 300 room nights in Carlsbad • Event is promoted outside of San Diego County at least three (3) months prior to event • Organizers must provide media schedule including media markets, dates, times, impressions/circulation, and audience demographics. All advertising must feature Carlsbad destination brand logo • Event website includes "Travel" section featuring content about staying in Carlsbad and listing hotels or linking to Visit Carlsbad hotels webpage. Added weight will be given to events that include contracts/negotiated rates at Carlsbad hotels • Grant funds can be spent on marketing and/or operational costs • Award eligibility based on projected room nights o 300 -750 room nights -$25,000 o 751-1,500 room nights -$50,000 o More than 1,500 room nights -$100,000 • Events may receive 50% of the total grant award up front. The remaining grant funds will be paid at the conclusion of the event based on actualized room nights* o 75% of target will receive 50% or remaining funds {75% of total award) o 90% of target will receive 80% of remaining funds {90% of total award) o 100% of target will receive 100% of remaining funds {100% of total award) * Events that fail to meet 75% of target may not receive any of the remaining award funding. • Multi-year events may be eligible for 50% of the original grant for the second and third year the event takes place in Carlsbad if criteria is met in the previous year and pending fund availability Destination Transportation Services Grant Amount Available: Up to $1 million per year • Service provider moves visitors from resorts and hotels to and from interest areas around Carlsbad like the beaches, Carlsbad Premium Outlets/The Flower Fields, The Forum, Shoppes at Carlsbad, Carlsbad Village, Legoland, etc. • Service provider has a defined route {or routes) and has capacity to serve multiple destinations • Service provider has knowledgeable drivers who can share destination information about Carlsbad • Service provider operates exclusively within the City of Carlsbad during peak seasons, days of the week, and hours for tourism visitors Attachment A • Service provider must adhere to all applicable laws and regulations and requirements of transporting public passengers, including meeting the City of Carlsbad's insurance requirements. • Service provider established a method of tracking and reporting to the CTBID Advisory Board Budget For fiscal year 2022-2023, the CTBID has approved $1.5 million in funding for CTBID grant programs. Of that: • $100,000 for Placemaking Events • $400,000 for Brand Positioning Events and Room Night Driving Events • $1 million for Destination Transportation Services Funding Awards In general, competitive applications will have clearly articulated projected room demand that results from the proposed event. The specific benefit must be projected in the incremental delivery of hotel room night sales to assessed hotels. Incremental is defined as paid room nights in excess of what would be consumed without the proposed event. Successful applications will clearly describe the strategy and tactics for delivering incremental room night sales, as well as the estimated resu lting number of room night sales and resulting gross room revenue. Decision Criteria When considering applications, priority will be given to the following: (NOTE: not all criteria are applicable to each grant category) • Overall ROI for the destination and to hotel properties • Other revenue o Competitive applications will demonstrate strong revenue sources beyond a CTBID grant • Events that occur during the low-travel season (aka 'off-peak') time of year • The opportunity to foster NEW demand generating events and services from concept to actualization with the potential to establish a recurring marquis status for the destination • Projected incremental hotel room nights • Applicants who can quantify past successes • Past compliance and success history • Premier events that elicit prestige and enhance the reputation of Carlsbad as a premier destination • Events that align with Carlsbad's key experience pillars: wellness, beach, golf, arts/entertainment, outdoors, culinary, sustainability • Eve~ts that generate national/international media coverage (should be defined in media plan): o Media Coverage of the event: • Network TV • Cable Network • Radio Broadcast • Live Streaming o Media promoting the event: • NetworkTV Attachment A • Cable Network • Radio Broadcast • Print • Digital Channels4 • Social Platforms Funding Limitations • CTBID Grants cannot be used for alcoholic beverages. • The acquisition, construction, installation or maintenance of any tangible public property, including parking facilities, parks, planting areas, fountains, benches, booths, kiosks, display cases, pedestrian shelters, signs, trash receptacles, public restrooms, ramps, sidewalks, plazas, pedestrian malls, lighting and heating of public facilities cannot be funded. • The closing, opening, widening or narrowing of existing or new streets cannot be funded. • Facilities or equipment, or both, to enhance security and safety of persons and property within the destination, unless included in a specific proposal to benefit the assessed businesses cannot be funded. • Regular public safety and security personnel and programs, maintenance and repair, sanitation, nor other municipal provided by the City cannot be funded. • Political candidate or ballot initiative activity cannot be funded. • Expenses not directly related to the approved program cannot be funded Application Review Process Staff Review Grant applications will be reviewed by CTBID staff and Visit Carlsbad staff (as a designated grant review contractor of the CTBID}. Reviewers will consider: • The thoroughness of application and format • The proposed programs' compliance • ROI • The appropriateness of the proposed program goals and objectives • The quality of the responses to the review criteria • Feasibility of event, including ability to meet city requirements for licensing, permitting, and insurance coverage • The current and past contractual performance/standing with the City of Carlsbad, and/or other governmental agencies • Disclosure of other pending or granted public funding for the fiscal year in question • Evaluation of the applicant's assumptions, past performance, marketing plan, business plan and projections for hotel room sales (both in room nights and ADR} • Evaluation of the applicant's "capacity' to execute on the projected event • Past performance of the organization's events and data collected • Seasonality, day of week, etc. • STR data (past occupancy and average daily room rate} by date to evaluate factors such as need, the capacity for more room sales, etc. Subcommittee Review Attachment A The CTBID Grants subcommittee comprised of CTBID staff, Visit Carlsbad, and two CTBID Board members will review the staff report to ensure that the application appropriately projects ROI for the destination. CTBID Advisory Board Review Grants that meet all application requirements will be considered by the full CTBID Advisory Board at a regular Advisory Board meeting. These meetings are open to the public and applicants may be asked to present their application to the Advisory Board. Schedule Grant applications will be reviewed quarterly, with the deadline to apply being one month prior to the Regular CTBID Advisory Board meeting, each quarter. Should a CTBID Advisory Board meeting be cancelled or moved, notice will be given to all active grant applicants and final consideration will be at the subsequent regular or special CTBID Advisory Board meeting. Distribution of Funds Funds will be distributed upon final approval of the grant application pursuant to a mutually negotiated funding schedule. The CTBID reserves the right to hold a portion of awarded funds until after the event takes place and all reporting has been submitted. Should a grant-funded event fail to take place, or miss its target by more than 50%, the grant recipient may be required to return a portion of or all granted funds to the CTBID. Contact For any questions about the CTBID grant program, please reach out to business@carlsbadca.gov.