Loading...
HomeMy WebLinkAboutReg 2024-07-01 Item 5C - LTAC - Lodging Tax Funding: 2026 World Cup Station Domination Marketing with Seattle Southside Regional Tourism Authority (dba Explore Seattle Southside) for $119,275COUNCIL AGENDA SYNOPSIS Initials Meeting Date Prepared 02; Mayor's review Council review 7/1/24 BJM ITEM INFORMATION ITEM No. 5.C. STAFF SPONSOR: B. MILES ORIGINAL AGENDA DATE: 7/ 1/ 24 AGENDA ITEM TITLE Lodging Tax Application for Seattle Southside Regional Tourism Authority for World Cup Station Domination CATEGORY Discussion Mtg Date /1 Motion Mtg Date 07/1/24 El Resolution Mtg Date [ Ordinance Mtg Date [ Bid Award Mtg Date [ Public Hearing Mtg Date ❑ Other Mtg Date SPONSOR ❑ Council 11 Mayor ❑ Admin Svcs ❑ DCD ❑ Finance ❑Fire ❑ Pd'R ❑ Police ❑ P[YW SPONSOR'S SUMMARY Review of lodging tax funding request from Seattle Southside Regional Tourism Authority (dba: Explore Seattle Southside) in the amount of $119,275 for advertising at select light rail stations during the 2026 World Cup. REVIEWED BY Trans&Infrastructure Svcs LTAC DATE: 6/ 24/ 24 Community Svcs/Safety 11 Finance & Governance LJ Planning & Community Dev. Arts Comm. ❑ Parks Comm. ❑ Planning Comm. COMMITTEE CHAIR: QUINN RECOMMENDATIONS: SPONSOR/ADMIN. Mayor's Office COMMIE EIEL Unanimous Approval; Forward to Consent Agenda COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED $119,275 AMOUNT BUDGETED $200,000 APPROPRIATION REQUIRED $0 Fund Source: LODING TAX Comments: No general funds. MTG. DATE RECORD OF COUNCIL ACTION 7/1/24 MTG. DATE ATTACHMENTS 7/1/24 Informational Memorandum dated 6/17/24 Lodging Tax Application, Seattle Southside RTA Lodging Tax Six Year Financial Plan (Draft) Minutes from the 6/24 Finance and Governance Committee meeting (distributed separately) 1 2 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance and Governance FROM: Brandon Miles, Director CC: Mayor McLeod DATE: June 17, 2024 SUBJECT: Lodging Tax Funding Request World Cup Station Domination ISSUE Review of lodging tax funding request from Seattle Southside Regional Tourism Authority (dba: Explore Seattle Southside) in amount of $119,275 for advertising at select light rail stations during the 2026 World Cup. BACKGROUND 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 $2.5 million in lodging tax funds available for use. The City's Lodging Tax Advisory Committee (LTAC) reviews all requests 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. Pending Applications At its June 14, 2024 meeting, the LTAC recommended approval of one funding request for Explore Seattle Southside. 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." 3 INFORMATIONAL MEMO Page 2 1. Explore Seattle Southside, World Cup Station Domination, ($119,275) Seattle has been selected to host five matches for the 2026 World Cup. It's expected that fans from around the globe will be descending on the region. What makes the World Cup unique is that the games are spread out and fans may have downtime between matches. This downtime presents an opportunity to bring people to the City and to invite those already staying our hotels to get out and enjoy the City. City staff is started to look at opportunities to promote the City and to make use "World Cup Ready." Explore Seattle Southside presented the City with an opportunity to partner with it and the City of SeaTac for advertising inside the Angle Lake, SeaTac Airport, and TIBs light rail stations. Explore Seattle Southside and the cities will activate the stations with advertising leading up and through World Cup. The City of Tukwila will pay 1/3 the costs for the advertising at SeaTac Airport Station and all the costs for the TIBs station. Explore Seattle Southside will design the ads, with input from the cities. The City of SeaTac will pay for the costs at Angle Lake station. Average annual boardings at SeaTac Airport al 1.91 million and TIBs has annual boardings of 816,000. Ridership will likely be significantly higher during the World Cup. LTAC Recommendation on Application: Do Fund Staff Recommendation on Application: Do Fund. FINANCIAL IMPACT The total request for the lodging tax application will not exceed $119,275. No general funds dollars will be used for these funding allocations. The funding allocations are consistent with the six -year financial plan for the lodging tax fund. 2024 Tourism Six -Year Financial Plan Allocation World Cup, 2024-2026: $200,000 Experience Tukwila (Pending): ($119,275) Remaining Funds: $80,725 RECOMMENDATION Staff recommends that the Committee approve pending funding requests and forward to the July 1, 2024 consent agenda. Note, a contract over the Mayor's signature authority is also required. Staff would like to request that the contract be allowed to go on a future consent agenda for approval, with the need for a committee briefing. ATTACHMENTS 1. Lodging Tax Application, Seattle Southside, World Cup Station Domination 2. Lodging Tax Six Year Financial Plan 4 Application to the City of Tukwila for Use of 2023 Lodging Tax Funds Event or Activity Name (if applicable): Amount of Lodging Tax Requested: Applicant Organization: Federal Tax ID Number: Mailing Address: Primary Contact Name: Primary Contact Phone: Primary Contact Email Address: Station Domination of marketing Tukwila in light rail stations — World Cup May -July 2026 119,275.00 Seattle Southside Regional Tourism Authority 47-30311480 Seattle Southside RTA Attn: Mark Everton, CEO 3100 S 176th Street, Suite 200 SeaTac WA 98188 Mark Everton 206-406-1575 mark@seattlesouthside.com 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 Operation of a tourism -related facility owned or operated by a non-profit organization 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: Non -Profit (Note: Attach a copy of your current non-profit corporate registration from the Washington Secretary of State Office) Municipality For Profit Corporation 1 am an authorized agent of the organization/agency applying for funding. I understand that: • 1 am proposing a tourism -related service for 2026. 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. Signature: Mark Everton Date: 06/11/2024 5 1. Describe your tourism -related activity or event. The Seattle Southside Regional Tourism Authority is requesting lodging tax funds to be used to produce and display marketing materials promoting the City of Tukwila in the Tukwila International Link Light Rail Station and the SeaTac Airport Link Light Rail Station. The proposed marketing takeover of the two Link Light Rail Stations (aka Station Domination) will occur during the FIFA World Cup being held in Seattle from May —July 2026. The RTA secured the rights to three light rail stations (Angle Lake, SeaTac and TIS) via contract with Intersection, the marketing representative for Link Light Rail. SeaTac has agreed to reimburse the RTA for the cost of production, installation and display in the Angle Lake station and to share in 1/3 of the SeaTac station. The RTA will incur the cost of production, installation and display in the SeaTac station in addition to wrapping a light rail car with the same marketing material. Tukwila is being asked to incur the cost of the Tukwila International station ($31,250) and 1/3 of the cost of the SeaTac station ($88,000). Currently the annual boarding of passengers at the TIS is 816,000 and the SeaTac station boardings are 1,912,075. The monthly averages for boardings during May -July 2026 are anticipated to increase significantly. At the current passenger volume, 204,000 people will board trains and be exposed to Tukwila's marketing messages at the TIS from May to July, while 478,000 people will board at SeaTac during May -July. A cost of $.17/person exposed to Tukwila's marketing messages. The RTA intends to donate its time and creative resources to Tukwila in creating its marketing messages. The production, installation and placement costs are all 3rd party generated. 2. Is your event/activity/facility focusing on attracting overnight tourists, day tourists, or both? The purpose of the marketing to visitors in the region is to build awareness of Tukwila as a hotel, shopping and dining destination. Describe why visitors will travel to Tukwila to attend your event/activity/facility: Describe the geographic target of the visitors you hope to attract (locally, regionally, nationally and/or internationally): The geographic target of visitors during the World Cup will depend on the nations represented in the PNW bracket. It is possible that tens of thousands of visitors from Germany, France, Brazil may be in the PNW. Page 2 of 5 6 3. Describe the prior success of your event/activity/facility in attracting tourists: The RTA did a station domination at the SeaTac station during the MLB all-star game in 2023. The airport and SeaTac station were very busy during the all-star week. 4. If this your first time holding the event/activity/facility, provide background on why you think it will be successful. 5. Describe the media strategy you employ to promote your event/activity/facility to attract overnight and/or day tourists? Please list any digital or print media (newsletters, e-blasts, social media, etc.) your agency uses or intends to use to promote your event/activity/facility. The station domination is a marketing opportunity. 6. Describe how you will promote lodging establishments, restaurants, retailers and entertainment establishments in the City of Tukwila. The RTA will work with Tukwila city leaders to define what the design elements and messaging for the TIS will be. 7. Is the City able to use your digital and print media for collaborative marketing? Yes. 8. Describe how you will use the name "Tukwila" in publications, promotions, and for your event? 9. 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 estimate of: A. Overall attendance at your proposed event/activity/facility. . Number of people who will travel fewer than 50 miles for your event/activity. 682,000 + people passing through the two stations unk Number of people who will travel more than 50 miles for your event/activity. . Of the people who travel more than 50 miles, the number of people who will travel from another country or state. Page 3 of 5 unk unk 7 . Of the people who travel more than 50 miles, the number of people who will stay overnight in Tukwila. n/a . Of the people staying overnight, the number of people who will stay in PAID accommodations (hotel/motel/bed-breakfast) in Tukwila. n/a 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) n/a 10. 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.? Light Rail will provide ridership statistics post the World Cup. Intercept studies are planned to ID the points of origin for people passing through the stations. 11. Are you applying for lodging tax funds from another community? If so, which communities and in what amounts? SeaTac, for their participation with the Angle Lake and SeaTac stations. SeaTac is being asked for $88,000 for their 1/3 share of SeaTac station. 12. Are you applying for funding from Seattle Southside Regional Tourism Authority (SSRTA)? If so, in what amount? n/a 13. What is the overall budget for your event/activity/facility? What percent of the budget are you requesting from the City of Tukwila? $500,000 1) What will you cut from your proposal or do differently if full funding for your request is not available or recommended? n/a Applications are considered on a rolling basis. Please contact staff to discuss the process for having the application reviewed by the City's Lodging Tax Advisory Committee. Page 4 of 5 8 Completed applications should be submitted to: Lodging Tax Advisory Committee c/o Brandon Miles City of Tukwila 6200 Southcenter Blvd Tukwila, WA 98188 or an'so Questions? lesPTukwila A.gov LTAC Contact: Brandon J. Miles (206) 431-3684 Brandon. es@3Tukwia Page 5 of 5 A. ov 9 10 Intersection CONTRACT FOR ADVERTISING Advertiser: Explore Seattle Southside CONTRACT* 22420114 Account Executive: Neal Callahan Program Name: World Cup 2026 Sold To Advertiser Company: Explore Seattle Southside Addre.ss: 3100 S.176th Street Seattle, Washington 98188 Telephone: (206) 575-2489 Attn: Email: Agency Company: Address: Telephone: Attn: Email: 1 SEA -Seattle-ST-Re11 2 SEA- Seettte-ST-Rali 3 SEA - Seattle-ST-Rail - Saattte-ST-Rail 5 SEA - Seattle-ST-Rail :2 SEA-Seethe-ST-Raft 7 SEA - &tett' a-ST-Rail SEA - Seattle-ST-Rail M Station - SeaTao Airport Station Ittat1011-1Weaffie htterniettorml 8tvd steam! M Station - Angie Lake Station Domination M Rail -11*.in Wrap P Station - SeaTac 1 Airport Station P Station -lukrelle Internationet Stott Stadon P Station -Angie Lake Station Domination P Rion -Train %kap • Refers to tax payable by Advertiser/Agency het- un der !nail:Mug this Contract. you agree with our end Conclitionsoehich are svailable at http/Iwwwirrtersectior.comied-tarme Psyment Mahod goomoillee Bill TO Advert; sissrlAgencif Company: Explore Seattle Southside Address: 3100 5.176th Street Seattle, Washington 1313188 Telephone: (206) 575-2469 Attn: Email: 1 13 5/2512028 o sOttaces 5/25/2028 13 Valgoze 1 13 5/25/2026 1 0 slailizote 1 0 5/25/202e i a 6/102026 t Matt Pttert ploy 29,2024 15,50 PDTI INIERSECTION LLC GNI ma Nectronkaily Customer P.O. or: 13 7/1a/20213 o 7tritta620 1] 7/19/20211 • 7ft2/202$ O 5125/2020 O 5/W202e D 5/25/Eon 13 8t1/2021 8.0 — 4,12.nk E9441,99 (May 44r, 2024.142n PDT 8250.000.00 MOWS S150.000.00 $31,280.00 $18,9e0.00 loam° ip,500.00 10.8506 $7.191.00 10.3500 Mark Everton CEO DATE ENG to email). AUTHORIZED SIGNA7URE - ADVERTISER AGENCY' --nom mar- MAE &ME AGYESMSD AGENCY INTERSECTION.COM CONTRACT FOR ADVERTISING 10(1 N Tourism Funding, Six Year Financial Plan DRAFT - Updated March 3, 2021 Working Draft Update 2023 Budgeted 2023 Actuals (Unaudited) % Difference 2024 2025 2026 2027 Totals, '23-'27 Tourism Revenue Lodging Tax Federal Indirect Grants: Local Grants & Other Payments: Interest and Other Earnings: Total Revenues: Tourism Expenses Marketing, Sales, and Sponsorships Sponsorships Small Events -ience Tukwila, Branding and Marketing, Visitors World Cup Planning and Activation Business Attraction and Promotion Sub Total: COVID-19 Response SavingLocalKC.com SSRTA Emergency Funding Showare Sponsorship Seattle Southside Chamber of Commerce Sub Total: Destination Development Wayfinding Plan Development and Installation Art Investments Tukwila Pond Sub Total: General Administration Salary and Benefits City Overhead Charge Administrative Sub Total: Total Expenditures: Beginning Fund Balance: Ending Fund Balance: Notes 720,000 $ 856,555 18.97% $ 850,000 $ 850,000 $ 1,000,000 $ 850,000 $ 4,406,555 - $ 0.00% . - $ 44,000 0.00% $ 20,000 $ 64,000 6,000 $ 122,651 1944.18% $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 202,651 726,000 $ 1,023,206 40.94% $ 890,000 $ 870,000 $ 1,020,000 $ 870,000 $ 4,673,206 $ - $ $ 130,000 -100.00% $ 130,000 $ 130,000 $ 130,000 $ 130,000 $ 520,000 15,000 -100.00% $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 60,000 175,000 -100.00% $ 190,000 $ 190,000 $ 200,000 $ 200,000 $ 780,000 50,000 -100.00% $ 50,000 $ 50,000 $ 200,000 $ $ 300,000 30,000 -100.00% $ 30,000 $ 30,000 $ 30,000 $ 30,000 $ 120,000 400,000 $ 280,002 -30.00% $ 415,000 $ 415,000 $ 575,000 $ 375,000 $ 2,060,002 $ $ - $ - $ 15,000 -100.00% $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 60,000 15,000 $ 100,000 $ 75,000 $ 200,000 $ 375,000 $ 97,397 $ 26,493 $ 30,000 $ 153,890 $ 943,890 $ 93,001 26,493 11,203 130,697 410,699 -100.00% $ 15,000 $ 15,000 $ -100.00% $ 100,000 $ - 100.00% $ 75,000 $ -100.00% $ - $ - 100.00% $ 175,000 $ -4.51% $ -62.66% $ -15.07% $ -56.49% $ 101,850 $ 27,818 $ 30,000 $ 159,668 $ 764,668 $ 75,000 75,000 104,906 $ 28,653 $ 30,000 $ 163,558 $ 668,558 $ 108,053 $ 29,512 $ 30,000 $ 167,565 $ 997,565 $ 15,000 $ 15,000 $ 60,000 200,000 $ 100,000 $ 400,000 40,000 $ 40,000 $ 230,000 - $ 600,000 $ 600,000 240,000 $ 740,000 $ 1,230,000 111,294 $ 519,103 30,397 $ 142,873 30,000 $ 131,203 171,692 $ 793,180 1,301,692 $ 4,143,182 $ 2,342,419 $ 2,342,419 $ 2,954,926 $ 3,080,258 $ 3,281,700 $ 3,304,135 $ 2,129,529 $ 2,954,926 $ 3,080,258 $ 3,281,700 $ 3,304,135 $ 2,872,443 This document does not bind the City to provide funds nor does it authorize any funding. All use of lodging tax funds must be approved by LTAC and the City Council through an application process. The blue shaded cells indicate updates to what was intially approved. Salary/Benefits for Business Relations Manager is split 50/50 between general fund and lodging tax and is estimated to increase 3% annually after 2024. The City overhead charge is charged to all special funds. It recoups the cost to the general fund to support the lodging tax fund. It includes facilities, technology, legal, accounting, and record keeping services and is estimated to increase 3% annually after 2024. Updated: