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HomeMy WebLinkAboutReg 2018-05-21 Item 4H - Funding - $90,500 Lodging Tax Funding for Southcenter's 50th AnniversaryCOUNCIL AGENDA SYNOPSIS 1 ni fiat; A lee ti ng Dale Prepared by 11/16.!yorf review Council review 05/21/18 BJM 7 Resolution AN Dale Ordinance AN Dale fl Bid Award AN Dale — Public 1 leafing A NDate T Other :\Itg Date Si( )NS( )R ri Council illa);or iii DC7) 1 'inance 0 I 'ire [ 715 Pe -R. E Police rimy Ecoud sBoNsoR's The City of Tukwila's Office of Economic Development is requesting $90,500 in lodging tax Snim,\Ry funds to be used to mark the 50th anniversary of the opening of Southcenter Mall and to celebrate 50 years of the Southcenter District being the premier shopping, dining, and entertainment area in Puget Sound. The funds will be used for marketing, events, promotions, and staffing to celebrate the milestone. T Riwitwkt) By El c.0,\x", mtg. Z CDN Comm El Finance Comm. Z Public Safety Comm. ri Arts Comm. [ Parks Comm. [ Planning Comm. CONINIITTEE CI LAIR: KRULLER • Trans &Infrastructure DATI';: 5/15/18 RECOMMENDATIONS: Si( )Nsolt/ADNIIN. C" NINIITThr Mayor Office/ Economic Development ITEM INFORMATION ITEM No. 4.H. STAFF SPONSolt: BRANDON MILES ORR;INAJ, A(LIN1),\ 1) \T11: 5/21/18 A(;KNI),\ 1mm TITIE Lodging Tax Funding Request for the City of Tukwila for Southcenter 50. c viii(;( )Ry p Discussion fit; Dale Z iVlotio 11 .1N Date 5/21/18 7 Resolution AN Dale Ordinance AN Dale fl Bid Award AN Dale — Public 1 leafing A NDate T Other :\Itg Date Si( )NS( )R ri Council illa);or iii DC7) 1 'inance 0 I 'ire [ 715 Pe -R. E Police rimy Ecoud sBoNsoR's The City of Tukwila's Office of Economic Development is requesting $90,500 in lodging tax Snim,\Ry funds to be used to mark the 50th anniversary of the opening of Southcenter Mall and to celebrate 50 years of the Southcenter District being the premier shopping, dining, and entertainment area in Puget Sound. The funds will be used for marketing, events, promotions, and staffing to celebrate the milestone. T Riwitwkt) By El c.0,\x", mtg. Z CDN Comm El Finance Comm. Z Public Safety Comm. ri Arts Comm. [ Parks Comm. [ Planning Comm. CONINIITTEE CI LAIR: KRULLER • Trans &Infrastructure DATI';: 5/15/18 RECOMMENDATIONS: Si( )Nsolt/ADNIIN. C" NINIITThr Mayor Office/ Economic Development Unanimous Approval; Forward to Consent Agenda COST IMPACT / FUND SOURCE EXPL\: DITURN RI (.,l 'IRI :D AMOUNT BUDGETED APPROPRIATION REQUIRED $90,500 $400,000 $N/A Fund Source: 101 FUND. Comments: Lodging tax funds can only be used for tourism promotion activities. MTG. DATE RECORD OF COUNCIL ACTION 05/21/18 MTG. DATE ATTACHMENTS 05/21/18 Informational Memorandum dated 5/8/18 2018 Lodging Tax Application Minutes from the CDN meeting of 5/15/18 ri 96 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Community Development and Neighborhoods FROM: Brandon Miles, Business Relations Manager CC: Mayor Ekberg DATE: May 8, 2018 SUBJECT: Lodging Tax Application Funding Request City of Tukwila-Southcenter 50 ISSUE Approval of funding a request by the City of Tukwila for lodging tax funds to be used for events, marketing, staffing, promotion, and other cost related to the Southcenter 50th Celebration. BACKGROUND The City of Tukwila's Office of Economic Development is requesting $90,500 in lodging tax funds to be used to mark the 50th anniversary of the opening of Southcenter Mall and to celebrate 50 years of the Southcenter District being the premier shopping, dining, and entertainment area in Puget Sound. Available Lodging Tax Funds The City collects a 1% lodging tax on certain qualifying overnight stays in paid accommodations (hotels/motels/Airbnb) in the City. State law limits the use of these funds to tourism promotion'. There is currently just over $1.1 million in lodging tax funds available for use. This does not include revenue for the months April and May because of the two-month lag in receiving lodging tax funds from the State. Additionally, the City has budgeted to collect $755,000 in funds in 2018. Application Approval Process The City's Lodging Tax Advisory Committee (LTAC) reviews all requests, even by the City, for use of lodging tax funds. LTAC then forwards a list of recommended applications to the City Council for its review and consideration. If LTAC does not recommend an application be funded, that application is not forwarded to the City Council. The City Council may approve or deny any of the applications recommended by the LTAC. The City Council may also approve an application and increase or decrease the dollar amount awarded2. The City accepts applications on a rolling basis, with the LTAC reviewing requests monthly. 1 RCW 67.28.080 (6) defines "tourism promotion" as "...activities, operations, and expenditures designed to increase tourism, including but not limited to advertising, publicizing, or otherwise distributing information for the purpose of attracting and welcoming tourists; developing strategies to expand tourism; operating tourism promotion agencies; and funding the marketing of or the operation of special events and festivals designed to attract tourists." 2 On August 17, 2016, the Washington State Attorney General's Office issued an informal opinion regarding whether a municipality could change the dollar amounts recommended by the local lodging tax advisory committee. Specifically, the informal opinion states: "When awarding lodging tax revenues pursuant to RCW 67.28.1816(2)(b)(ii), a municipality may award amounts different from the local lodging tax advisory committee's recommended amounts, but only after satisfying the procedural requirements of RCW 67.28.1817(2), according to which the municipality must submit its proposed change to the advisory committee for review and comment at least forty-five days before final action on the proposal." 97 INFORMATIONAL MEMO Page 2 Pending Applications There is currently one application from the City of Tukwila pending. The LTAC reviewed the application at its May 1, 2018 meeting and recommends funding the application as submitted. 1. City of Tukwila, Southcenter 50 ($90.500). The City of Tukwila is requesting $90,500 in funding as part of the Southcenter 50 celebration. In May of 1968, Southcenter Mall, now known as Westfield Southcenter opened its doors to the public. At the time of its opening it was the second largest, climate -controlled shopping center in the country. Westfield Southcenter is known as one of the premier shopping destinations in the Pacific Northwest. The opening of Southcenter Mall was a catalyst for the huge growth of retail and commercial activity in Tukwila's Southcenter Neighborhood, recognized by Puget Sound residents as convenient place for shopping, dining, hotels, and family fun. And it all started with the Mall's opening in 1968. Working with Westfield, the Chamber, and other partners, the City would like to celebrate the 50th anniversary of the Southcenter Shopping District. The impetus of this celebration is this year's 50th anniversary of the Mall; however, besides just celebrating the Mall's opening, we will also celebrate 50 years of Southcenter being one of the premier shopping districts in the Puget Sound, as well as the future. Last year the City received $50,000 funding to begin the initial planning, promotion, and development of the Southcenter 50th celebration. Approximately, $26,600 was spent and/or committed for the Southcenter 5061. The City is requesting to roll the unspent/uncommitted balance of $23,400 to this application and is also requesting an additional $67,100 in additional funds ($23,400 + $67,100 = $90,500 (not to exceed). The Southcenter 50 campaign includes, but is not limited to: 1. Activation with signage in and around the core shopping area. 2. 5k, in partnership with the Seattle Sounders. 3. Evening events. 4. Enhancing and marketing Touch a Truck as a "Southcenter 50th" event. 5. Two Promotional Videos. 6. History promotion 7. Creation of a video highlighting the early history of the area; building and opening of the Mall; buildout of the area; and what the future holds. 8. PR and Advertising promotion. 9. Social Media, including hourly rate for an intern. 10. Symposium focused on the future of shopping, dining, and entertainment. 11. Engage the public to share their own stories about Southcenter. 12. Sponsorship of third party activities in the Southcenter area. 13. Other general marketing, branding, and promotional activities. The funding requested will be used for the Southcenter 50th Celebration, which will commence this summer. The City's funds are to celebrate the entire district. Only the actual costs will be 98 billed. Funds not used will remain in the lodging tax fund and are eligible to be used next year. A INFORMATIONAL MEMO Page 3 conceptual budget is attached with the application. Funds may be moved between the various categories as the Southcenter 50 campaign progresses. Westfield Southcenter will be providing a significant amount of in-kind contribution, including allowing the City to have use advertising area at the Mall and allowing the Mall parking area to be used to stage a 5K run. Additionally, Westfield will be hosting and paying for an evening event on July 31St FINANCIAL IMPACT The total amount of funding requested from the lodging tax fund is $59,064. As discussed above, the City has budgeted the collection of $755,000 in lodging tax revenue in 2018. 2018 Lodging Tax Overview Revenue Estimated Fund Balance Projected Lodging Tax Revenue (Budgeted) $1,167,394 $755,000 Notes This was the budgeted estimated in the adopted City bud ems_ Expenditures Committed Funds Seattle Southside Regional Tourism Authority City of Tukwila, General Administration ($292,500) In 2017, the City approved a two-year application and contract with Seattle Southside Regional Tourism Authority. The number shown reflects the funds committed for 2018. ($59,064) Approved by City Council on February 19, 2018. Pending Applications City of Tukwila Southcenter 50 Celebration Total Approved and Pending expe nditures: Estimated Additional Funds Available for Activities: ($90,500) Approved by LTAC on May 1, 2018. ($442,064) $1,480,330 RECOMMENDATION The LTAC considered the request at its May 1, 2018 meeting and recommended approval of the request. Staff recommends that the City Council approve the funding request, as recommended by LTAC. Staff suggests that the application be placed on the May 29 Committee of the Whole meeting and June 4 consent agenda. ATTACHMENTS A. City of Tukwila Southcenter 50th Application. 99 100 Application to the City of Tukwila for Use of 2018 Lodging Tax Funds Event or Activity Name (if applicable): Amount of Lodging Tax Requested Applicant Organization: Federal Tax ID Number: Southcenter 50th Anniversary $90,500 City of Tukwila ....� 91-6001519 98188 MailingAddress: 6200 Southcenter Blvd, Tukwila, WA Contact Name: Brandon Miles n ct Phone: 206-431-3684 Primary Primary Coto Primary Contact Email Address: Brandon.Miles@Tukwilawa.gov Check all the service categories that apply to this application: ✓ Tourism promotion or marketing. ✓ Operation of a special event or festival designed to attract tourists. o Operation of a tourism -related facility owned or operated by a non-profit organization. o Operation and/or capital costs of a tourism -related facility owned by a municipality or a public facilities district. Check which one of the following applies to your agency: o An entity engaged in tourist marketing or tourism promotion. o Non -Profit (501(c)(3) or501 (c)(6)) (Note: Attach a copy of your current non-profit corporate registration from the Washington Secretary of State Office) ✓ Municipality (City, Town, or County of Washington State) I am an authorized agent of the organization/agency applying for funding. I understand that: • I am proposing a tourism -related service for 2018. If awarded, my organization intends to enter into a services contract with the City; provide liability insurance for the duration of the contract naming the City as additional insured and in an amount determined by the City; and file for a permit for use of City property, if applicable. • My agency will be required to submit a report documenting economic impact results in a format determined by the City. Js/ Signature: April 30, 2018 Date: 101 1) Describe your tourism -related activity or event. In May of 1968, Southcenter Mall, now known as Westfield Southcenter opened its doors to the public. At the time of its opening it was the largest, climate controlled shopping center in the country. Westfield Southcenter is known as one of the premier shopping destinations in the Pacific Northwest. The opening of Southcenter Mall was a catalyst for the huge growth of retail and commercial activity in Tukwila's Southcenter Neighborhood, recognized by Puget Sound residents as convenient place for shopping, dining, hotels, and family fun. And it all started with the Mall's opening in 1968. Working with Westfield, the Chamber, and other partners, the City would like to celebrate the 50th anniversary of the Southcenter Shopping District. The impetus of this celebration is next year's 50th anniversary of the Mall; however, besides just celebrating the Mall's opening, we will also celebrate 50 years of Southcenter being one of the premier shopping districts in the Puget Sound, as well as the future. Last year the City received $50,000 funding to begin the initial planning, promotion, and development of the Southcenter 50th celebration. Approximately, $26,560 was spent and/or committed for the Southcenter 50th. The City is requesting to roll the unspent/uncommitted balance of $23,400 to this application and is also requesting an additional $67,060 in additional funds. The funding requested will be used for the Southcenter 50th Celebration, which will commence this summer. The City's funds are to celebrate the entire district. 1. Activation with signage in and around the core shopping area. 2. 5k, in partnership with the Seattle Sounders. 3. Evening events. 4. Enhancing and marketing Touch a Truck as a "Southcenter 50th" event. 5. Two Promotional Videos. 6. History promotion 7. Creation of a video highlighting the early history of the area; building and opening of the Mall; buildout of the area; and what the future holds. 8. PR and Advertising promotion. 9. Social Media, including hourly rate for an intern. 10. Symposium focused on the future of shopping, dining, and entertainment. 11. Engage the public to share their own stories about Southcenter. 12. Sponsorship of third party activities in the Southcenter area. 13. Other general marketing and promotional activities. Overall, this is a marketing campaign to promote the Southcenter area as the premier shopping, dining, and entertainment area in the Puget Sound. 2) Tukwila's brand signature experience is built on the following themes: 2 102 • Family Entertainment • Shopping • Fun with Friends Describe how your event, activity, or festival builds on one or all the themes listed above: Southcenter 50 will be consistent around the entire Tukwila brand and the brand pillars described above. The Southcenter District has a wide variety of shopping and family entertainment. Several of th events, such as Touch a Truck and the Sounder 5K, are focused on family fun and fun with friends. 3) If an event, list the event name, date(s), and projected overall attendance. Touch A Truck: 1,000 Sounder Run: 2,500 Evening Events: 300 Third Party Events: 1,000 The Southcenter 50 is primarily a marketing campaign for the entire district. Our overall media impression target is 1 million. 4) Is your event/activity/facility focusing on attracting overnight tourists, day tourists, or both? Both. 5) Describe why visitors will travel to Tukwila to attend your event/activity/facility. The Southcenter District is the premiere shopping district in the Puget Sounds. Over 100,000 people visit the district every day. The District is conveniently located at the intersection of 1-405 and 1-5. The events are unique, such as the Sounder 5K run and Southcenter 50 evening events. 6) Describe the geographic target of the visitors you hope to attract (locally, regionally, nationally, and/or internationally). Primarily people within a one-hour drive of the City. However, hotel guests in the Southcenter area will also enjoy and benefit from the events. 7) Describe the prior success of your event/activity/facility in attracting tourists. The Southcenter District generates just over $2 billion in taxable retail sales a year, with approximately $388 million being attributed to tourists (Dean Runyan). The Touch a Truck event is an existing event that continued to grow and the Seattle Sounders 5K was operating in Redmond for the last few years and has had strong attendance. Again, the Southcenter 50 is primarily a marketing and promotional initiative. 3 103 The City has also brought in partners, including the Chamber, Westfield, and Seattle Sounders to help with the events and promotions. These partners have a proven record of holding first rate events. 8) If this your first time holding the event/activity/facility provide background on why you think it will be successful. No. 9) Describe how you will promote lodging establishments, restaurants, retailers, and entertainment establishments in the City of Tukwila. The Southcenter 50 campaign will promote all of the offering in the Southcenter District area including, restaurants, shopping, hotels, etc. 10) As part of the City's branding process, the City committed to using the "Tukwila" name above other names often used to describe the City (or parts of the City), such as "Southcenter" or "Seattle." a) If you are existing entity currently operating in the City does your entity list its physical location as being in Tukwila? If not, why? (Note: This question is only with the city being used to describe your location, it does not apply to out of area marketing, which may say "Seattle" of "Seattle Southside."). Yes. This campaign will use the "Tukwila" name very prominently. b) If you are proposing a new activity, festival, or event will it be described as occurring in "Tukwila?" Yes, all new and existing events will say Tukwila. "Southcenter District" may be used, but will be use in conjunction with the "Tukwila" name. c) If you are proposing a marketing program please outline how the "Tukwila" name will be used, promoted, used in promotional materials and used in social media. Tukwila will be use prominently in all marketing and social media posts. 4 104 11) Measurements and Metrics (Note: You will be required to report these metrics as part of the close out of the agreement between your organization and the City.) As a direct result of your proposed tourism -related service, provide an esti mate of: a. Overall attendance at your proposed event/activity/facility. b. Number of people who will travel fewer than 50 miles for your event/activity. c. Number of people who will travel more than 50 miles for your event/activity. 10,000 Plus, over 1 million of media and marketing impressions. d. Of the people who travel more than 50 miles, the number of people who will travel from another country or state. e. Of the people who travel more than 50 miles, the number of people who will stay overnight in Tukwila. f. Of the people staying overnight, the number of people who will stay in PAID accommodations (hotel/motel/bed-breakfast) in Tukwila. g. Number of paid lodging room nights resulting from your proposed event/ activity/facility (for example: 25 paid rooms on Friday and 50 paid rooms on Saturday = 75 paid lodging room nights) 5 9,000 1,000 Less than 200. 1,000 1,000 2,500 Again, this primarily a marketing and promotional campaign to build overall brand awareness for Tukwila and to help build the brand. 105 12) What methodologies did you use to calculate the estimates and what methodologies will you use to track outcomes, such as total participants, estimated visitor spending, etc.? For the events, these are estimates based on experience. Media and marketing impressions will be tracked throughout the campaign. 13) Are you applying for lodging tax funds from another community? If so, which communities and in what amounts? No. 14) Are you applying funding from Seattle Southside Regional Tourism Authority (SSRTA)? If so, in what amount? No. 15) What is the overall budget for your event/activity/facility? What percent of the budget are you requesting from the City of Tukwila? Total Request is: $90,500 (Net new is $67,100, with $23,400 from Phase 1 being rolled over into the final phase). See attached. Westfield Southcenter and the Tukwila Historical Society will be putting on their own events with their own funding. Note: Last year $50,000 was approved in lodging tax funding to help organize and do initial promotion for the Southcenter 50 celebration. Southcenter 50 Phase 1: Funds Spent in Phase 1: Unused Funds from Phase 1: Funds Needed Final Phase: Apply Unused Funds from Phase 1 (column C): Net Additional Funds Needed (Column D -E): 106 6 $50,000 ($26,560) $23,440 $90,500 ($23,400) $67,100 Completed applications should be submitted to: Lodging Tax Advisory Committee c/o Brandon Miles City of Tukwila 6200 Southcenter Blvd Tukwila, WA 98188 Or, Brandon.Miles ' Tukwilawa.gov Questions? LTAC Contact: Brandon J. Miles (206) 431-3684 Brandon.Miles@Tukwilawa�. ov. 7 107 Southcenter 50 Goals: 1. Celebrate 50 years of Westfield Southcenter and the entire shopping district. 2. Get excited about the future of the entire shopping district (Pedestrian Bridge Opening and new mixed use projects). 3. Remind the Seattle Metro area that the Southcenter District has and will remain the premier shopping, dining, and entertainment district in the Puget Sound. Events events are existing, but would be brought up the "Southcenter 50" brand for this year Some of these only. . Event Date Tukwila May 19 Historical Society City Lodging Tax Funds? Touch a Truck July 28th No Yes, to expand the event and include some marketing under the Southcenter 50 brand. Southcenter July 31' Mall 50th Celebration Seattle Sounders 5K Seattle _.. Chocolates Haunted House September 15th Retail osium 108 October, 2018 November 9t Possible, but only a small amount. Westfield is the lead on organizing this event. Amount N/A $7,500 Notes Confirmed Confirmed $5,000 Confirmed Yes, event logistics and marketing. Yes, sponsorship only. Yes Subtotal: 8 $15,000 $5,000 $7,500 $40,000 Probable Confirmation Probable Confirmation Confirmed. General Marketing and P The following generally outlines some of the marketing and public relations work we are going to do for the Southcenter 50th Platform Facebook, @Southcenter50 Instagram Video highlighting future development. Seattle Times Stories Interviews with key people and video. Promotional Video General Promotion and Marketing Status Launched and running very low key. Not launched Getting ready to execute an agreement with firm. Reached out, tour provided. Researching In Development Ongoing Platform Billboard on S. 180th and West Valley Hwy. Status City Funds Lod in' Tax None Needed. N/A Yes, plus funds $15,000 of Port funds from grant. N/A Yes Yes Yes Subtotal: Amount $1,000 $1,000 $1,000 Notes Just got to 450 followers, but we haven't been doing a huge push. Cost includes hourly rate for intern. Cost includes hourly rate for intern. N/A $10,000 $10,000 $2,500 $25,500 District Activation Not yet started. City Funds Lodgin ' Tax Yes, for design of ad only. 9 Amount $500 Will focus from the train station to the Mall, along Baker Blvd. Several story ideas: 1. Focus on the Mall. 2. Future vision • Nordstrom Family Member. • Costco CEO. • Westfield Outreach to promote the district, tied to the overall history and the future. Notes City has rights to use the billboard for free. 109 Parking Garage Sys Digital Signs in Mall. Three special signs in Mall. Not Started Not Started Not Started. Static History Boards Not Started. Other Onnortunities On -Going Yes, for design $3,000 and . rintin • . Yes, for design $500 onl Yes, in part, for $3,000 design and printing? Yes $10,000 Yes _.... $1,000 In -Kind from Westfield for S • ace. In Kind from mall. In kind from Mall. Historylink Historylink. Platform Brochure/Pamphlet for events Digitize Photos Swag Bags for Event Subtotal: $18,000 Swag/C ollateral/Other Status City Funds Lod in Tax Not Started Yes Amount $2,500 $2,000 Not Started Yes Notes Not Started Yes $2,000 Funds for design and hoto ri ' ts. May need to get co . i ' ht Eermission. Funds for buying and or making bags and collateral. Other On -Goin Yes Subtotal: $500 $7,000 Total Request: $90,500 In 2017, Lodging Tax Advisory Committee and the City Council approved an application for $50,000 to help with the initial planning and organizing of the Southcenter 50th celebration. The City has used/committed $26,560 of these funds, thus $23,440 is unspent and uncommitted. An additional is $67,100 is being request of lodging tax funds ($90,500-$23,440). 10 110 City of Tukwila City Council Community Development & Neighborhoods Committee COMMUNITY DEVELOPMENT & NEIGHBORHOODS COMMITTEE Meeting Minutes May 15, 2018 - 5:30 p.m. - Hazelnut Conference Room, City Hall Councilmembers: Staff: Guests: Kate Kruller, Chair, Kathy Hougardy, Zak Idan Mayor Ekberg, David Cline, Derek Speck, Nora Shagena, Laurel Humphrey Michelle Hankinson, Nexus Youth and Families erloff, Stacy Hansen, Kia CALL TO ORDER: Chair Kruller called the meeting to order at 5:30 p.m. I. BUSINESS AGENDA Motion was made, seconded and car second order of business. A. o consider the Homeless Services Zoning item as the 2018 Lodging Tax Application: Southcenter 50th Anniversary Staff is seeking Council approval of an application from the City of Tukwila for lodging tax funds in the amount of $90,500 to be used for costs related to the Southcenter 50th Celebration. The Lodging Tax Advisory Committee recommended approval of the funding request at its meeting on May 1, 2018. Southcenter Mall, now known as Westfield Southcenter, opened in 1968 and the City is partnering with other stakeholders to celebrate the 50th anniversary of the Southcenter Shopping District. If approved, only the actual costs will be bided and unused funds will remain in the lodging tax fund. UNANIMOUS APPROVAL. FOR ARD TO MAY 21, 2018 REGULAR CONSENT AGENDA. 111