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HomeMy WebLinkAboutFS 2012-06-05 Item 2E - Discussion - Tourism Promotion AreaCity of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance and Safety Committee FROM: Derek Speck, Economic Development Administrator DATE: May 30, 2012 SUBJECT: Tourism Promotion Area ISSUE The City of Tukwila has an opportunity to form a tourism promotion area (TPA). This would charge a fee of up to $2 per hotel room night to be used for tourism promotion. If the Council chooses to form a TPA, the City would also need to determine an appropriate organizational structure to carry out the work. BACKGROUND Under RCW 35.101 the State of Washington allows certain legislative authorities to form tourism promotion areas. A tourism promotion area (TPA) is a geographic region in which a legislative authority (such as a city or county) charges a per room night fee on the furnishing of lodging by a lodging business to be used for tourism promotion. The charge is collected by the State and remitted to the local government much in the same manner as lodging tax. The State defines tourism promotion as "activities and expenditures designed to increase tourism and convention business, including but not limited to advertising, publicizing, or otherwise distributing information for the purpose of attracting and welcoming tourists, and operating tourism destination marketing organizations" (RCW 25.101.010). The fee maybe up to $2 per room night and may be charged to lodging businesses with forty or more lodging units. The State law requires that in counties with a population of one million or more the legislative authority shall be composed of two or more jurisdictions acting jointly under an interlocal agreement created for the joint establishment and operation of a tourism promotion area. Thus, in order to form a TPA, the City of Tukwila would need to enter into an interlocal agreement with another city or King County. Before a city council can adopt an ordinance to implement a TPA, State law requires an initiation petition to be presented to the legislative authority and the legislative authority to hold a public hearing. To be valid, the initiation petition must include a number of items including: a description of the boundaries of the proposed area; the proposed uses and projects to which the proposed revenue from the charge shall be put and total estimated costs; the estimated rate for the charge with a proposed breakdown by classification of lodging business; and the signatures of the persons who operate lodging businesses in the proposed area who would pay sixty percent or more of the proposed charges. Some hoteliers in Tukwila and SeaTac have proposed a charge on lodging businesses with 60 or more rooms. Based on that scenario, Tukwila has fifteen hotels and motels in that classification which comprise 2,035 rooms (see attached list). In that scenario, the initiation petition would need to be signed by operators of over 1,221 rooms. If a protest is made by the lodging businesses in the area which would pay a majority of the proposed charges, the formation proceedings must terminate. 163 INFORMATIONAL MEMO Page 2 Seattle Southside Visitor Services staff have researched TPAs in Washington State and found that eight TPAs and been formed and one is in the formation process. They generate annual revenues ranging from $0 to $1.7 million. In all cases, the legislative authorities who formed the TPAs also appointed or formed a variety of types of boards and commissions to make recommendations as to the use of the TPA funds. In most cases, the legislative authorities contract with non government organizations to implement the tourism promotion programs. Most of those organizations are organized under IRS code 501 c (6). None of them are organized under Washington State law as a public development authority (PDA). For example, the Spokane County TPA has a $1.7 million annual budget. It contracts with the Spokane Convention and Visitor's Bureau, which is a 501(c)6 and the Spokane Regional Sports Foundation, which is a 501(c)3, for sales and marketing of convention and trade shows, marketing Spokane County to the travel industry and to recruit major sporting events. A number of hoteliers have approached Seattle Southside Visitor Services (SSVS) and the Cities of Des Moines, SeaTac, and Tukwila with a request that the cities form a TPA. Managers representing eight Tukwila hotels submitted a letter dated March 29, 2012 to the Tukwila City Council requesting the City form a TPA (attached). SSVS staff has also been working with the City of SeaTac and the SeaTac hotels on forming a TPA. If the Cities of SeaTac and Tukwila formed a TPA with a $2 per room night charge on hotels with 60 or more rooms, it could generate an estimated $2.5 million per year for tourism promotion. As a separate, but potentially related issue, the cities of Tukwila and SeaTac each separately currently implement a 1 tax on lodging. As required by State law, each city also has a lodging tax committee that serves as an advisory committee to each city council and provides recommendations on the expenditures of the lodging tax funds. The cities of Tukwila, SeaTac, Kent, and Des Moines contribute approximately $1.2 million per year toward the Seattle Southside Visitors Services, which is a tourism promotion program administered by the City of Tukwila. Formation of a TPA would not affect the collection of the 1 lodging tax. The lodging tax advisory committees are required by State law and would remain in effect. DISCUSSION If the City Council desires to explore the formation of a tourism promotion area, there are three main categories of decisions the Council should consider: formation requirements, discretion over expenditures, and form of organization for implementation. (1) Formation Requirements: The City of Tukwila would need to execute an interlocal agreement for tourism promotion with at least one city or the County to act jointly as the legislative authority. After receiving a valid initiation petition, the legislative authority would need to adopt a resolution of intent that states, among other things, a description of the boundaries in the proposed areas, the proposed area uses and projects to which proposed revenues from the charge shall be dedicated and the total estimated cost of projects, and the estimated rate (s) for the charge with a proposed breakdown by classification of the lodging business. Note: The legislative authority would need to conduct a public hearing. If lodging businesses that would pay a majority of the proposed charges protest the formation, the formation must terminate. After the legislative authority conducts a public hearing, it would then adopt an ordinance to establish an area. Among other items, the ordinance would need to include the geographic boundaries, the initial or additional rate of charges to be imposed with a breakdown by classification, and the uses to which the 164 INFORMATIONAL MEMO Page 3 charged revenue shall be put (which must conform to the uses declared in the initiation petition). The legislative authority may disestablish a tourism promotion area by ordinance after a public hearing. (2) Discretion Over Expenditures: A key question is what organization will have discretion over expenditures, e.g. who approves the budget. State law provides that the legislative authority imposing the charge shall have sole discretion as to how the revenue derived from the charge is to be used to promote tourism (RCW 35.101.130). However, the legislative authority may appoint advisory boards or commissions to make recommendations for its use or the legislative authority may create a new advisory board or commission for that purpose. For example, the legislative authority could appoint the existing lodging tax boards as an advisory board or it could create a new advisory board. In their memo dated March 29, 2012, representatives of eight hotels in Tukwila requested that the TPA be managed and implemented through a Public Development Authority (PDA). Among other reasons, they explain that they prefer the PDA as a way to provide autonomy and oversight, presumably by the TPA ratepayer hotels. Based on a very preliminary review of the state law and its reference that the legislative authority has "sole discretion over expenditures it is not clear that the legislative authority could completely give up budget authority. However, this may be worth additional legal review to see if it is possible to include language in the formation ordinance that still enables the legislative authority to have "sole discretion" but provides enough discretion over expenditures to the PDA to provide the hotel ratepayers the assurance they seek. Staff could perform additional research into the existing TPAs in the state to understand what form of organization they have as their legislative authority and how much discretion over expenditures is provided to the implementing organizations or advisory boards. (3) Form of Organization: A tourism promotion area is a funding mechanism. A TPA itself does not require a specific organizational structure to implement tourism promotion. The legislative authority could expend the funds using city government resources, such as we do today through our tourism office known as Seattle Southside Visitor Services. SSVS is an organization formed by interlocal agreements with four cities and administered by the City of Tukwila using City of Tukwila staff. The legislative authority could contract with other organizations or businesses, such as the Chamber of Commerce or a marketing firm. Or, the cities in the TPA could create a new organization specifically designed to implement tourism promotion such as a 501(c) 6 or a public development authority (PDA). One important consideration for the City of Tukwila is how the form of organization would affect the existing staff positions at Seattle Southside Visitor Services since they are employees of the City of Tukwila. There are four full -time staff positions which are represented by the Public, Professional Office Clerical Employees and Drivers Local Union No. 763, an affiliate of the International Brotherhood of Teamsters. The staff has expressed strong support for the formation of the TPA and hope to work for the new tourism organization if one is formed. They have also requested that if a new organization is formed, they would remain City of Tukwila employees and work for the new organization under a support services contract. If the Council is interested in forming a TPA, staff would do additional research into the various forms of an organization to determine which would be the best fit. Staff would also research the City of Tukwila's roles, responsibility, and liability under the various forms. I INFORMATIONAL MEMO Page 4 There are a number of organizations who have a stake in the creation of a tourism promotion area. Following is some feedback from the various stakeholders. Seattle Southside Visitors Services: SSVS staff is very excited about TPA and sees this as a good opportunity to generate up to $2.5 million in additional tourism promotion revenue each year and hope that the Cities of SeaTac and Tukwila would form a public development authority (PDA) to manage and implement the Seattle Southside tourism program drawing upon both the tourism promotion area revenue and lodging tax revenue. New and expanded tourism promotion activities are expected to include more advertising, sales and marketing (strategic planning, market research, creative development, media placement, sales activities, hosting tourism industry events). New regional sales and marketing efforts could focus on small to mid- size meetings and events, multi property meetings and events, Canadian market development, niche markets including urban, adventure, cultural, sports, incentive, and geo- tourism; group tour product development, FAM tours for targeted customers, public relations programs including press /travel writer tours and coverage, and sporting event marketing enhancement. Tukwila Lodging Tax Advisory Committee: Over the past few months, the City of.Tukwila's Lodging Tax Advisory Committee has received informational updates on the possibility of a TPA. City staff has not brought the item to a vote in order to complete additional research and receive City Council feedback on the various options. In general, the discussion at LTAC has been very supportive of forming a TPA. Tukwila Hoteliers: Managers representing eight Tukwila hotels submitted a letter dated March 29, 2012 to the Tukwila City Council requesting the City form a TPA (attached). City staff has not yet performed outreach to hoteliers not represented on the letter. Chamber of Commerce: The Southwest King County Chamber of Commerce has provided a letter to the City of Tukwila expressing support for the creation of a TPA (attached). City of SeaTac: SeaTac's City Council's Administration and Finance Committee received an informational update on the potential TPA on 10/11/11 (minutes attached). SeaTac's Hotel /Motel Advisory Committee (HMAC) received an update on the TPA on 1/11/12 (minutes attached). At this time City of SeaTac staff is preparing to bring a contract related to the TPA to their Council study session on June 12, 2012 for discussion and to the Council's regular meeting on June 26, 2012 for a vote. The proposed contract would be with a law firm to prepare documentation to establish the TPA and a PDA. SeaTac staff is recommending formation of a PDA for the new organization because that is the form requested by their hoteliers. A PDA would require a sponsoring /chartering organization and SeaTac staff has indicated that the City of SeaTac is willing to serve in that role. City of Des Moines: The Des Moines City Council heard this item at their meeting of May 17, 2012 and directed their staff to work with the Cities of SeaTac and Tukwila in the creation of the Seattle Southside Tourism Development Authority (minutes attached). City staff believes that a tourism promotion area is potentially a very good opportunity for the City of Tukwila and is worthy of consideration. It is very significant that a number of our hoteliers are asking the City to impose this charge. Staff believes the hotelier support is a strong indication that the TPA would increase tourist activity and benefit the City and its 166 INFORMATIONAL MEMO Page 5 businesses. Based on the hotelier request, staff believes the additional benefits from tourism promotion would offset any competitive disadvantage due to the additional room night fee. Prior to forming a TPA, there are some details that staff believes need additional analysis. First, the City should check with all the hotels in Tukwila and confirm their level of interest. Second, we should more fully analyze the options for the extent to which the Council and /or the hoteliers would have discretion over the budget. And third, we need to confirm the extent to which the City would have responsibility or liability if a non -city organizational structure is chosen. And fourth, we should more thoroughly assess the alternatives for how our existing tourism staff positions are organized if a TPA is formed. If the Council is interested in exploring the formation of a TPA, the staff would conduct official city staff outreach to all hotels and motels in Tukwila, solicit additional input from Tukwila's Lodging Tax Advisory Committee, and further engage with the City of SeaTac and other potential partners. Staff would also perform additional research into the issues related to discretion of expenditures, form of organization, and tourism staff positions. In terms of doing this additional research, it will save time if the Council is able to either rule out or emphasis certain alternatives based on what we know at this point. Thus, staff requests Council direction on the following questions: (1) Is the Council interested in exploring formation of a tourism promotion area? (2) To what extent is the Council comfortable granting discretion over expenditures to another organization? (3) Are there certain forms of organization the Council strongly prefers or would not consider? FINANCIAL IMPACT No additional budget authority is being requested at this time. If at some point a tourism promotion area is formed, the budget would be adjusted at that time. RECOMMENDATION The Committee is being asked to consider this item and forward it to a future Committee of the Whole. ATTACHMENTS List of Tukwila Hotels Letter from Tukwila hoteliers dated March 29, 2012 Letter from the Chamber of Commerce dated May 14, 2012 Minutes from City of SeaTac Administration and Finance Committee dated 10/11/2011 Minutes from the SeaTac Hotel /Motel Tax Advisory Committee dated 1/11/2012 Minutes from the Des Moines City Council meeting of 5/17/2012 Chart of tourism promotion areas in Washington 167 x Hotels and Motels in Tukwila Hotel Name Best Western Rivers Edge Comfort Suites Courtyard by Marriott Southcenter Courtyard by Marriott- SeaTac Days Inn Seattle South Doubletree by Hilton Seattle Airport Southcenter Econo Lodge Embassy Suites Extended Stay America Tukwila Great Bear Motor Inn (a) Hampton Inn Southcenter Homestead Studio Suites Homewood Suites by Hilton Knights Inn Ramada Limited Residence Inn by Marriott Riverside Residence (a) Spruce Motel Americas Best Value Travelers Choice Travelodge Total Minimum needed for initiation petition (60 Minimum needed for successful protest vote (50 Hotels who signed the 3/29/12 memo Example Classification by of Rooms All 40+ 60+ 146 146 146 138 138 138 149 149 149 211 211 211 119 119 119 219 219 219 47 47 238 238 238 96 96 96 154 154 154 94 94 94 106 106 106 54 54 68 68 68 144 144 144 40 40 81 81 81 36 72 72 72 2,212 2,176 2,035 1,306 1,221 1,089 1,018 1,200 1,200 Notes (a) Room count information was unavailable at the time of this report. (b) Hotel data provided by Seattle Southside Visitor Services 5/29/12 (c) Per RCW 35.101.020 an initiation petition must be signed by persons who operate lodging businesses who would pay sixty percent or more of the proposed charges. (d) Per RCW 35.101.070 the proposed action to create a tourism promotion area must terminate if protested by the lodging businesses which would pay a majority of the proposed charges. (e) Per RCW 35.101.010 and 35.101.050 the a legislative authority may only impose a tourism promotion area charge on lodging businesses with 40 or more lodging units. Updated: 5/30/12 Printed: 05/30/2012 2:38 PM 169 lM G� K 6-&t b-71M aJ y1� G,� 2� Gr�irriionl� dh- ,9yn TO: Mayor Jim Haggerton and City of Tukwila Council members C FROM: Tukwila Hotel TPA Ratepayers DATE: 3/29/2012 SUBJECT: Seattle Southside Tourism Promotion Area and Tourism Development Authority A Tourism Promotion Area (TPA).can only be created if the legislative authority receives an initiation petition signed by the hotel businesses that would pay 60 percent of the self imposed surcharge (this is not a tax). As these funds would be dedicated for tourism promotion activities dnly as stated by RCW 35.101; we the potential ratepayers believe this initiative if spent effectively would bring more visitors to the City resulting in more visitor spending that would: bolster hotel occupancy, protect current jobs, create new jobs, increase business at restaurants and retail stores, and increase patronage at arts, cultural and sporting venues. Hoteliers are very supportive of forming a TPA and anxious to begin the process. However, as hoteliers we believe we are in the best position to understand and determine best uses for effectively promoting tourism in a way that generates overnights stays in our hotels. The lodging association has seen successful and some not so successful implementations of public funds for tourism promotion statewide. With lessons learned, we wish to bring forward a new and innovative proposal for the City Council's consideration that could result in an additional $1.5 to $2.5 million annually through a TPA that would enhance and build on Seattle Southside Visitor Services' already successful destination marketing efforts and would provide for public oversight but active, private sector participation. A win/win for all involved parties. Potential TPA ratepayers prefer that the TPA be managed and implemented through a Public Development Authority (PDA). We wish to work with the Cities to develop a Public Development Authority or "Seattle Southside Tourism Development Authority" (SSTDA). After careful analysis, we (potential TPA ratepayers) believe this option would provide: Anatomy and oversight of the new TPA funds; Assurance the funds would be used effectively to generate overnight hotel stays; Provide for a TPA disestablishment policy should the ratepayers desire to do so in the future; and Redirect (but not increase) the current lodging tax revenues currently supporting Seattle Southside's marketing program. 171 Furthermore, we believe there are many benefits to the participating Cities: Permits the participating cities to delegate tourism services to individuals with expertise; Liability and financial risk to the participating cities is limited; and Provides for effective oversight of public funds. Ratepayers want to work with the Cities to form a TPA and SSTDA. Any other organizational structure such as City dept. or 501c would not provide ratepayers with the above mentioned desires. Therefore, the initiation petitions will not precede until the above concept and the following draft documents are created and generally supported by all affected parties (1) Inter -local Agreement; (2) SSTDA Charter and Bylaws; (3) model ordinance to be adopted by participating cities. We encourage Tukwila City Administration to make this a high priority so we can all move forward. The Cities of Des Moines and SeaTac are already on board and SeaTac has agreed to sponsor the public entity SSTDA. Thanks for your continued support as always! Hotel Name: CJ L 0 J Signature: Hotel Name: 144 md 7 0 /n J iZ te: Signatua Hotel Name: G Y Date: 3 /24 1/L 7vkwlIq Signature: /i_ Hotel Name: 60,4 !Z �OvV' �-r Date: -3 1 2 -q 1 Signature: Hotel Name: lO�iSS�( U�_Pe SrCC Lr_ Date: _-E� 2q (2 .c -Vww I A Op Signature Hotel Name: P+ v _1e�eC1 S +G��fv�; Date: Z Signature j 1 72 Hotel Name: }'t 1 }t-S Date: 2. Z Signature: Hotel N, Date: 7 Signa ir�(�,� /27�Y'� Hotel Name: Date: Signature: Hotel Name: Date: Si Hotel Name: Date: Signature: Hotel Name: Date: Signature: Hotel Name: Date: Signature: 173 74 KtUtIVtU V gSi Chamber of Commerce May 14, 2012 Derek Speck Economic Development Administrator City of Tukwila 6200 Southcenter Blvd. Tukwila, WA 98188 Dear Derek: I CITY OF TUKIMLA The Southwest King County Chamber of Commerce supports area hotels and their efforts to create a Tourism Promotion Area for Seattle Southside. As major employers in our region, these entities are taking innovative steps to improve the marketing and promotion efforts of Southwest King County communities. By implementing the TPA, this would give Seattle Southside a boost in the marketing efforts of our area, which is critical, staying competitive with the other community's regional tourism markets. The Chamber also supports the opportunity to increase the number of room nights our local hotels should see with the additional marketing dollars. Our Chamber supports the creation of the Tourism Promotion Area and the hotels self assessment to fund new programs. The Chamber gives our full support to this project to ensure the future of a viable tourism industry in Southwest King County. Sincerely, Lynn Wallace President /CEO 175 Administration and Finance Committee Minutes Tuesday, October 11, 2011 3:00 PM Council Chambers Members: Present: Absent: Commence: 3:05 p.m. Break: 3:47 p.m. Commence: 4:05 p.m. Adjourn: 4:19 p.m. Gene Fisher, Chair X Tony Anderson X Rick Forschler X Note: Items 6 7 to be reviewed iointly with the Public Safetv Justice Committee Other Councilmembers Present: Ralph Shape, Pam Fernald Staff Coordinator: Joyce Papke, Interim Finance Director 1. Council's HRANEBA Informational Update Program Deputy X Recommended for: X Approval Mayor Fisher /Anh Approval with modifications Hoang Denial X Referred to 10/25/11 RCM. Human Resources Director, Anh Hoang distributed a draft memorandum outlining three options for Council consideration with regard to their HRANEBA contributions from the City. The three options are: 1) The City would continue contributing to HRANEBA as it is now. The Council would not need to take any action if this option were chosen; 2) Stop contribution to HRANEBA and deposit specified dollar amount into a deferred compensation plan set up for each Councilmember effective January 1, 2014. From January, 2012 through December, 2013 the City would continue contributing into each Councilmember's HRANEBA account. 3) Stop contribution to HRANEBA effective January 1, 2012 and deposit a specified dollar amount into a deferred compensation plan set up for the four positions elected for the 2012 -2015 term. The HRA/VEBA contributions would cease for the remaining three Councilmembers. The City's contribution into a deferred compensation plan would commence for the remaining three Councilmembers at the beginning of the next term, January 1, 2014. City Attorney Mary Bartolo stated Council would need to take action by the 10/25/11 Council meeting if there was a change. It was recommended an Ordinance be written and presented at the next RCM for Option #2. If it does not pass, it would default to Option #1 (no change). I A &F Minutes October 11, 2011 Page 2 of 3 2. Draft 2012 Legislative X Informational Update Agenda —Jeff Robinson Recommended for: Approval Approval with modifications Denial Referred to Economic Development Manager Jeff Robinson distributed a draft of the 2012 Legislative Agenda for the Committee's review. The primary issues of particular importance to the City of SeaTac are 1) Transportation Funding; 2) Infrastructure; 3) Light Rail Station Area; and 4) Stormwater Capacity Grants. The purpose for presenting the draft was to give the Council time and opportunity to respond to the issues. It was suggested that there be a one hour workshop in November or December to discuss the issues prior to bringing it to full Council. Mr. Robinson requested that additional comments or questions be addressed to him electronically. 3. Seattle Southside X informational Update Tourism Promotion Area Recommended for: Approval Jeff Robinson, Jeff Approval with modifications Hart, G.M. Seattle Denial Marriott, Lynn Wallace, Referred to President, SW King County Chamber of Economic Development Manager, Jeff Robinson reported on the potential for the creation of a TPA in the Seattle Southside market area. Commerce A least two cities have to participate and initial discussions have included Tukwila and Kent. The revenue generated by a per room night surcharge would be deposited into a TPA account for the express purpose of tourism marketing activities. The estimated revenue would be between approximately $1 million and $2 million a year. Mr. Robinson reported that there will be meetings with the other cities to lay the ground work. A "Frequently Asked Questions" and information sheet is available for the Council's information. 4. City Councilmembers Informational Update and City Manager Future X Recommended for: X Approval Travel Authorizations Approval with modifications and Completed Travel Denial Approval of City Credit X Referred to 10/25/11 RCM Card Payments and Travel authorizations were reviewed by A F Committee and Personal recommended for approval at the next regular Council meeting. Reimbursements Joyce Papke 5. Next Meeting November 8, 2011 177 A &F TMiiZutes October 11, 2011 Page 3 of 3 6. Interlocal Agreement Informational Update with the Kent Regional X Recommended for: Fire Authority for Joint X Approval Operations and Approval with modifications Administration of Denial X Referred to 10/25/11 RCM, Specific Fire Services Fire Chief Jim Schneider made a recommendation to renew the Interlocal Jim Schneider Agreement with the Kent Regional Fire Authority for joint operations of Administration and specific Fire Services for 2012. Under the current contract those services include Fire Chief, Fire Prevention (which includes Public Education Services), Fire Investigation and Training services. Chief Schneider reported that consolidation of services has proven to be efficient and productive. The cost of the proposed contract would be $187,467 and become effective 1/1/2012. This is an increase of 4.2% over the 2011 contract due to the Collective Bargaining Agreement Cost of Living increase. A question was asked about grants received in 2011. Chief Schneider reported that the SeaTac Fire Department has secured three grants in 2011: the RAMPART, EMPG and VISTA grants. 7. Administrative Office of Informational Update the Courts Agreement X Recommended for: Paulette Revoir X Approval Approval with modifications Denial X Referred to 10/25111 RCM. Court Administrator, Paulette Revoir distributed a proposed Interagency Agreement between the Administrative Office of the Courts (AOC) and SeaTac Municipal Court for reimbursement of interpreter expenses. The contract is for costs incurred during the period of July 1, 2011 June 30, 2012 and would cover interpreter services for English deficient and deaf /hard of hearing citizens with a financial need. The SeaTac Municipal Court would be reimbursed for interpreter costs up to a maximum of $9,363. I City of SeaTac Hotel /Motel Tax Advisory Committee Meeting January 11, 2012 Meeting Notes Motel -Motel Members Present: Caroline Curtis; Cathy Heiberg; Jeff Hart; Vickie Molzer; Frank Welton; Pat Baker; Roger McCracken Members Absent: Jeff Bauknecht; Mayor Terry Anderson, Chair Others Present: Steve Beek, Celebrate America; Doris Cassan, Dollar Rent a Car; Oren Hadaller, Celebrate America; Clyde Hill, Celebrate America; Julie Hill, Celebrate America; Katherine Kertzman, SSVS; Lynn Wallace, SWKC Chamber; Meeting Duration: 3:00 --4:15 p.m. Staff Present: Jeff Robinson, Economic Development Manager; Kit Ledbetter, Parks and Recreation Director AB Topic Disposition 2: Adoption of Minutes of _Informational Update November 9, 2011 –Roger _Recommended for: McCracken, Acting Chair X Approval(s) _—Approval with modifications Denial Motion by Heiberg. Second, Molzer 3. Funding Request X Informational Update from "Celebrate America Recommended for: Festival" Committee Steve ____Approval Beck Clyde Hill Approval with modifications _Denial Beck provided written materials to the committee and gave an overview of the Celebrate America Committee and its purpose which is to create a sense of community for the residents of SeaTac and provide a day -long schedule of events and activities for all age groups and families. Beck, Clyde Hill and Oren Hadaller presented the concept for the July 4th celebration and the activities they were planning. These included a wide range of athletic events and contests; a memorial and flag "pavilion to honor wounded warriors from the armed services; food and beverage vendors; and a fireworks display over Angle Lake. The total request to the committee was for ASS, 000 in HIM Tax funds. 179 Hotel/Motel Tax Advisory Committee Page 2 The cornrnittee had several questions regarding hoiv the budget had been structured, if the organizers of the events had committed to the events, how the celebration would be publicized, and whether the event could use less than the frill ainount requested. McCracken pointed out that this was outside of the normal request cycle and that a Cite Council budget amendment a -ould be needed to alloit the f tiding. Other questions revolved aroiind the impact to room nights and other economic benefits that may accrue to local businesses. 4.Multi -Sports Facility workplan update Jeff Robinson The committee asked the Celebrate America Group to work with Kit Ledbetter and Katherine Ker•tznran to better describe projected costs and potential impacts to the tourism industry. The committee agreed to discuss the requests at the Febritary meeting if the Celebrate America group could provide the necessary it for for a decision to be objective1 }J reached. Robinson asked that the information and budgets be provided in advance of the Febr itary meeting so the HIM Committee members ii�ould have fi cient tune to analyze the request and have a knowledgeable discussion. X Informational Update Recommended for: Approval _Approval with modifications Denial Referred to: Robinson provided a status report on the Multi sport facility study based on a it progress report provided by Land Economic Consultants, which is conducting the analysis. Preliminary findings indicate that such a facility would be utilized by a tivide range ofpotential sports activities. Next steps ivould be to "right size the facility and to undertake a review of other similar projects around the country to better understand the economics of developing, operating and marketing such a facility. IW Its Hotel/Motel Tax Advisory Committee Page 3 S. SSVS Update Katherine Kertzman X Informational Update _Recommended for: __Approval _Approval with modifications Denial Referred to: Kertzman reminded the group of the SSVS Tourism neworking event taking place on Februaryy 8 1h and asked everyone to try and attend. She gave a brief overview of the event which will include a presentation of the SSVS Annual report and information on the return on investment analysis to better understand the actual impart of tourism marketing expenditures in SSVS communities. Kertzman asked that the committee postpone the February meeting so that it would not conflict with the networking and/ annual meeting. The committee agreed to move February's meeting to the 15 th 6. Discussion, of Seattle Welton provided an update on the progress toward Southside Tourism Promotion establishing a Southside Seattle Tourism Promotion Area —Group area (SSTPA) comprised of the cities of SeaTac, Tuk -wila, Kent and Des Moines. A group meeting was conducted with several hotel managers and the general consensus was to move forward with the SSTPA. Items for further discussion will include at what level the assessment would be established, the size of hotels to be included, when to start the process and how the additional revenues will be spent. Kertzman reported that she is in the process of drafting an operating plan for the TPA and a budget that will describe the additional services and new initiatives that could be supported by TPA revenues. Kertzman reported that she and Robinson have begun work with a law firm to discuss the potential of a Public Development Authority that could act as the administrative and operating entity of the SSTPA and also manage the funding provided to SSVS through lodging tax revenues. re- asserted the importdnce of n" ot co- mingling the current revenues from the lodging tax with the new TPA funds and that the HIM Tax I: Hotel /Motel Tax Advisory Committee Page 4 7. Smith Travel Report t D.O.R. Lodging Tax Receipts 8. Other business '9. Adjourn Advisors Conunittee have the abilio to direct and monitor the use of the tax revenues apart fr•oni the TP.4 funds. Hart provided a report on the monthly Smith statistics and indicated that all numbers ar trending upward. He described the year to date rise in occupancy at 5.1 %0 with increased RevPar at 7.4% and Revenue up 8 the year through the November report. Robinson reported that the single location report for Sea Tac showed an increase of $67, 000 in lodging tax revenue in 3011 based on the Department of revenue report. X Informational Update _Recommended for: Approval _Approval with modifications Denial Referred to: The committee discusser) the Port of Seattle's request from interested parties to develop a new hotel on airport property. The meeting adjourned at 4:I5prr NA Consent Agenda Item #4 AGENDA ITEM BUSINESS OF THE CITY COUNCIL City of Des Moines, WA SUBJECT: Seattle Southside Tourism Development Authority ATTACHMENTS: Overview, Seattle Southside Tourism Promotion Area FAQ, Current Revenue and Service Structure, New Revenue and Service Structure Purpose and Recommendation FOR AGENDA OF: May 17, 2012 DEPT. OF ORIGIN: Economic Development DATE SUBMITTED: May 15, 2012 CLEARANCES: Legal Finance Mices [X] Economic Development Parks Recreation Senior Planning, Building PW APPROVED BY CITY MANL R FOR SUBMITTAL: The purpose of this agenda item is to seek Council direction to work with the Cities of Tukwila and SeaTac in the creation of the Seattle Southside Tourism Development Authority. Suumested Motion First Motion: I move to give direction to the City Manager and staff of the City of Des Moines to work with the other participating cities in the creation of the Seattle Southside Tourism Development Authority. Backeround Seattle Southside Visitor Services (SSVS) is a tourism promotion program administered by the City of Tukwila, serving the cities of SeaTac, Kent and Des Moines (participating cities) pursuant to separate interlocal agreements (ILA's). 27 1 IT-IN SSVS has provided tourism promotion to participating cities since 2002 and has demonstrated steady growth and excellent Return on Investment (ROI). SSVS receives approximately $20,000 annually in lodging tax revenue from motels that are located in the City of Des Moines. Discussion As outlined by Director Katherine Kertzman at the April 26 meeting, SSVS is proposing to form a new entity called Seattle Southside Tourism Promotion Area (the SSTPA), which will collect an amount not to exceed $2.00 per night from participating businesses. The City of Des Moines Hotel /Motel Tax Advisory Committee approved the creation of this new Tourism Promotion Area at their last meeting, as did the Hotel /Motel Tax Advisory Committee of SeaTac. The SSTPA will create a new source of revenue, which will be used together with the existing lodging tax revenues, to fund the Seattle Southside Tourism Development Authority (SSTDA). The SSTDA will continue and expand the tourism promotion services currently provided by SSVS. In order to move forward with the plan to create the SSTPA, and subsequently SSTDA, SSVS needs two participating cities. SSVS has requested that Des Moines be one of these cities, and seeks Council direction in support of this request, Alternatives Do not carry the motion. Financial Impact None. Recommendation /Conclusion: Des Moines stands to benefit from the expansion of SVSS as it transitions into the (larger and better funded) SSTDA. Tourism promotion services will grow, with no additional revenues required from the City beyond the lodging taxes currently allocated. P. IT.M. 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