HomeMy WebLinkAbout2024-05-06; Carlsbad Golf Lodging Business Improvement District; ; Disestablishment of the Carlsbad Gold Lodging Business Improvement DistrictMeeting Date:May 6, 2024
To: CGLBID Advisory Board Members
From: Matt Sanford, Economic Development Manager
Staff Contact: Matt Sanford, Economic Development Manager
matt.sanford@carlsbadca.gov, 760-607-2923
Subject: Disestablishment of the Carlsbad Gold Lodging Business
Improvement District
Recommended Action
Adopt a resolution recommending the City Council disestablish the Carlsbad Golf Lodging
Business Improvement District established in 2012 and repeal Carlsbad Municipal Code Chapter
3.38.
Item Explanation
On Nov. 27, 2012, the Carlsbad City Council adopted Ordinance No. CS-194 forming the
Carlsbad Golf Lodging Business Improvement District (CGLBID). Hotels, as defined in Carlsbad
Municipal Code Section 3.12.020, that chose to opt into the district were assessed $2 per
occupied room night. The proceeds of the assessment were used to promote golf-related
tourism within the boundaries of the CGLBID, as well as marketing-related capital
improvements such as golf-related signage and equipment, and to pay for the related
administrative costs. To oversee the district and validate expenditures, a five-member advisory
board was established, with members representative of district participants and a
representative of the Crossings Golf Course as a city-owned golf property. Each assessed hotel
determined how to spend the funds collected by its respective property, provided the
expenditures were for an approved golf-related expense. Reimbursement of these expenses
would be made quarterly upon approval by the CGLBID Advisory Board, up to the amount
collected per property minus administrative fees.
Over the 12 years the CGLBID district has been established, it has been deemed successful by
the participating hotels, allowing them to position their properties, and Carlsbad as a whole, as
a golf destination. The promotion of golf and golf-related activities led to an increase in visitors
and money spent in the destination, bolstering transient occupancy tax and sales tax revenue.
The district grew to include seven prominent Carlsbad hotels, which collectively raised
approximately $1.1 million annually to pay for golf-related promotional expenditures at no cost
to the city.
May 6, 2024 Item 2 Page 1 of 5
CARLSBAD GOLF LODGING BUSINESS IMPROVEMENT DISTRICT
Staff Report
Corresponding CTBID Development
In 2020, the Carlsbad Tourism Business Improvement District (CTBID), 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 in fiscal year
2020-21 and allowed for more robust tourism promotion.
On Jan. 12, 2022, the existing CTBID Advisory Board, made up of representatives of local hotels
and resorts, voted to explore options to modernize the district’s operations, including possibly
establishing a new district under the Property and Business Improvement District Law of 1994,
and disestablishing the existing district.
On April 18, 2023, the City Council of the City of Carlsbad formed a new Carlsbad Tourism
Business Improvement District (New CTBID) under the Property and Business Improvement
District Law of 1994 (California Streets and Highways Code Sections 36600 et seq.) with the
support of the majority of the Carlsbad lodging businesses. Visit Carlsbad was selected as the
Owners’ Association under the New CTBID and implemented the New CTBID’s management
district plan as of July 1, 2023, when the new assessment began.
Golf Related Programs as part of the New CTBID
The New CTBID includes an optional golf assessment that was designed to take the place of the
CGLBID moving forward. This approach allows for more streamlined operations under Visit
Carlsbad as the designated Owners’ Association. The New CTBID program began operating on
July 1, 2023, and was authorized for a five-year period. Because of the formation of the New
CTBID and corresponding golf program, the previous CGLBID assessment was not levied in fiscal
year 2023-24. Only remaining funds from previous fiscal year’s assessments remained. The
CGLBID district remained in place to oversee the expenditures of all remaining funds.
Disestablishment of the CGLBID
Should the CGLBID Advisory Board approve the final reimbursement requests at the May 6,
2024 Special Meeting, all remaining CGLBID reimbursement funds will have been expended.
Because there will be no remaining reimbursement funds and the assessment has already been
discontinued, the CGLBID Advisory Board may provide a recommendation to the City Council to
disestablish the CGLBID.
Fiscal Impact
As of May 6, 2024, the CGLBID fund only contained accrued interest. This interest will be
refunded to the participating properties proportionate to the amount they paid into the fund
since its inception.
May 6, 2024 Item 2 Page 2 of 5
The table below provides an estimate of what each property would receive, should
disestablishment be recommended. As additional interest continues to accrue, the actual
amounts may be slightly higher than what is portrayed in the table.
Next Steps
Should the CGLBID Advisory Board adopt the resolution recommending disestablishment of the
district, 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.
Exhibit
1.Resolution - CGLBID Disestablishment Recommendation
May 6, 2024 Item 2 Page 3 of 5
GLBID Interest Income
PEID Prnperty Total Assessments Inte rest
V024900 Ca pe Rey Hilton 277,762.00 4.8% 2,267.73
V025070 Ca rl s bad By the Sea 549,082.00 9.5% 4,482.86
V003283 Cassara 535,743.66 9.3% 4,373.96
V007967 Hilton Garden Inn 230,230.00 4.0% 1,879.66
V027285 Omni La Costa 1,201,684.30 20.9% 9,810.89
V023265 Parle Hyatt Aviara 1,411,193.43 24.5% 11,521.38
V017254 Sheraton Carlsbad Resort/West in 1,327,544.90 23.0% 10,838.45
V028160 Westin Resort Hotel 229,578.10 4.0% 1,874.34
Total 5,762,818.39 4T,049.26
Int erest income district to date 47,049.26 as of 3/31/24
RESOLUTION NO. 2024-004
A RESOLUTION OF THE CARLSBAD GOLF LODGING BUSINESS
IMPROVEMENT DISTRICT ADVISORY BOARD OF THE CITY OF
CARLSBAD, CALIFORNIA, RECOMMENDING THE CITY COUNCIL
DISESTABLISH THE CARLSBAD GOLF LODGING BUSINESS
IMPROVEMENT DISTRICT ESTABLISHED IN 2012 AND REPEAL
CARLSBAD MUNICIPAL CODE CHAPTER 3.38
WHEREAS, on Nov. 27, 2012, the City Council of the City of Carlsbad approved Ordinance
No. CS-194 enacting Chapter 3.38 of the Carlsbad Municipal Code establishing the Carlsbad Golf
Lodging Business Improvement District (CGLBID) 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 Golf Lodging Business Improvement
District Advisory Board (CGLBID Advisory Board) as authorized under the California Streets and
Highways Code Section 36530 and codified in Carlsbad Municipal Code Section 3.38.100; 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 (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 providing golf-related programs and activities
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 Carlsbad Golf Lodging
Business Improvement District has wound down operations and exhausted its remaining
reimbursement funds as of May 6, 2024; and
WHEREAS, there are no remaining assets to dispose of acquired with the revenues of the
assessments levied and collected for the Carlsbad Golf Lodging Business Improvement District's
projects, programs, activities, and administration.
NOW, THEREFORE, BE IT RESOLVED by the Carlsbad Golf Lodging Business Improvement
District Advisory Board of the City of Carlsbad, California, as follows:
1.That the above recitations are true and correct.
Exhibit 1
May 6, 2024 Item 2 Page 4 of 5
2.That the CGLBID Advisory Board approves the refund of any remaining accrued
interest to the participating properties proportionate to the amount each
contributed into the fund since its inception.
3.That the CGLBID Advisory Board recommends the City Council disestablish the
Carlsbad Golf Lodging Business Improvement District and repeal Carlsbad
Municipal Code Chapter 3.38.
PASSED, APPROVED AND ADOPTED at a Special Meeting of the Advisory Board of
the Carlsbad Golf Lodging Business Improvement District on the 6th day of May 2024, by the
following vote, to wit:
AYES: Stripe, Eding, Stull
NAYS:
ABSENT: Canepa
ABSTAIN:
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�SHERRY FREISINGER, City Clerk
(SEAL)
May 6, 2024 Item 2 Page 5 of 5