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Visitdallas Renewal Contract - Responses to May 20, 2020 Briefing Questions

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Memorandum DATE May 29, 2020 CITY OF DALLAS TO Honorable Mayor and Members of the City Council SUBJECT VisitDallas Renewal Contract - Responses to May 20, 2020 Briefing Questions On Wednesday, May 20, 2020, Convention and Events Services (CES) staff and VisitDallas leadership briefed Dallas City Council regarding the recommended terms and related hotel occupancy tax (HOT) ordinance amendments that form the basis for a proposed VisitDallas five-year contract renewal. CES staff provided an overview that outlined recommended contract terms, proposed governance changes and a restructured HOT ordinance that would go into effect from October 1, 2020 through September 30, 2025. CES staff also provided an update on the current and forecasted impact of COVID-19 to CES revenues, and effects on the local tourism industry. In response to City Council input at the briefing meeting, staff will address the following items in the draft contract term sheet and the HOT ordinance revisions being prepared for the City Council agenda meeting on June 10, 2020: • Review the full contract and incorporate potential revisions in the third contract year; • Strengthen the terms regarding Dallas-focused advertising; • Include terms for governance and board appointments by the City; • Specify that any retainage will be maintained by the City and not VisitDallas; • State that the City Council will annually allocate HOT funding for eligible arts and culture and historic preservation through the budget process; and • Update the City’s termination rights clause Additionally, the information below and in the attached Appendix is provided in response to City Councilmembers’ requests for information. Staff will update the City Council by memorandum on those items pending VisitDallas Board discussion. 1. Increase the Proposed Membership Rate for Non-Dallas Hotels and Partners Craig Davis, CEO and President of VisitDallas, will discuss refining the membership program and propose a new rate structure for non-Dallas businesses at the June 15, 2020 VisitDallas executive board meeting. Mr. Davis plans to coordinate a decision with the executive board during the meeting, have the larger board vote on the item on June 18th, and implement changes by August 1st. “Our Product is Service” Empathy | Ethics | Excellence | Equity DATE May 29, 2020 SUBJECT VisitDallas Renewal Contract - Responses to May 20, 2020 Briefing Questions 2. Provide the current breakdown of Regional Membership and Revenue Dues Membership Total Revenue Dallas Hotels 141 $518,086 Non-Dallas 42 $153,348 Hotels Totals 183 $671,434 Dallas Percent 77% 3. Re-evaluate Non-Dallas advertisements on the VisitDallas Website During the June 15th executive board meeting, Craig Davis will also propose excluding non-Dallas advertisement on the website, except for cases involving sporting event promotion. As with Item 1, decisions on changes to website advertising will be made by the larger board on June 18th, with an implementation schedule through August 1st. 4. Provide listings of the VisitDallas Board, Leadership Council, and Cultural Committee Members A complete list of VisitDallas’ Board of Directors, Leadership Council and their Cultural committees are listed in Exhibit-A. 5. Provide the CES HOT Revenue and Distribution Below please find the forecasted HOT revenue for FY21 through FY25. Fiscal Year 2021 distribution in this table aligns with the existing ordinance and the VisitDallas Amended and Restated contract approved on November 13, 2019. Subsequent years align with the proposed VisitDallas pro-forma provided during the May 20th briefing. As noted in the briefing, distribution for other allowable uses will be approved by City Council during annual budget discussions. Kay Bailey Hutchison Fiscal Year Forecast Convention Center Dallas VisitDallas Other Allowable Uses Allocation Amount Allocation Amount Allocation Amount 2021 $ 51,708,362 67.40% $ 34,851,436 29.10% $ 15,047,133 3.50% $ 1,809,793 2022 $ 58,875,981 67.40% $ 39,682,411 27.60% $ 16,249,771 5.00% $ 2,943,799 2023 $ 65,273,606 67.40% $ 43,994,411 25.10% $ 16,383,675 7.50% $ 4,895,520 2024 $ 71,697,091 67.40% $ 48,323,840 22.60% $ 16,203,543 10.00% $ 7,169,709 2025 $ 76,946,651 67.40% $ 51,862,043 20.10% $ 15,466,277 12.50% $ 9,618,331 5-Year Totals $ 324,501,691 - $ 218,714,140 - $ 79,350,399 - $ 26,437,153 6. Provide a list of allowable uses of HOT The table below outlines the current allowable uses for HOT in alignment with Texas State tax code Title 2, Subtitle D, Chapter 351, Subchapter B: Use and Allocation of Revenue. Page 2 of 3 Rev. 5/27/20 DATE May 29, 2020 SUBJECT VisitDallas Renewal Contract - Responses to May 20, 2020 Briefing Questions There is a two-part test for every expenditure of local hotel occupancy tax: A. Every expenditure must directly enhance and promote tourism and the convention and hotel industry B. Every expenditure of the hotel occupancy tax must clearly fit into one of the statutorily provided categories for expenditure of local occupancy tax revenues: a) Funding the establishment, improvement, or maintenance of a convention center or visitor information center b) Paying the administrative costs for facilitating registration c) Paying for advertising, solicitations, and promotions that attract tourists and convention delegates to the city or its vicinity d) Expenditure that promote the arts (capped at 15% HOT or 1% tax received on cost of room, whichever is greater) e) Funding historical restoration or preservation programs (capped at 15%) f) Funding certain expenses, including promotional expenses, directly related to a sporting event (only within counties with a population of under one million) g) Funding the enhancement or upgrading of existing sports facilities or sports fields for certain municipalities (only in certain cities) h) Funding transportation system for tourists i) Signage directing tourists to sites and attractions that are visited frequently by hotel guests in the municipality If you have additional questions, or require further information, please me contact me or Rosa Fleming, Director of CES. Joey Zapata Assistant City Manager c: T.C Broadnax, City Manager Nadia Chandler Hardy, Assistant City Manager Chris Caso, City Attorney Dr. Eric A. Johnson, Chief of Economic Development and Neighborhood Services Mark Swann, City Auditor M. Elizabeth Reich, Chief Financial Officer Bilierae Johnson, City Secretary Laila Alequresh, Chief Innovation Officer Preston Robinson, Administrative Judge M. Elizabeth (Liz) Cedillo-Pereira, Chief of Equity and Inclusion Kimberly Bizor Tolbert, Chief of Staff to the City Manager Directors and Assistant Directors Majed A. Al-Ghafry, Assistant City Manager Jon Fortune, Assistant City Manager Page 3 of 3 Rev. 5/27/20 APPENDIX - A: VisitDallas Renewal Contract - Responses to May 20, 2020 Briefing Questions 2019-20 BOARD OF DIRECTORS Chair Sales Committee Chair TRACI MAYER (H) JOYCE WILLIAMS (O)* KYLE NOONAN (B) Executive Director Associate Vice Chancellor of Workforce Owner Hotel Association of North Texas and Community Initiatives FreeRange Concepts 12830 Hillcrest Rd., Suite D218 Dallas County Community College District 8111 Preston Road, Suite 610 Dallas, TX 75230 1601 S. Lamar Street Dallas, TX 75225 214.742.4930 Dallas, TX 75215 214.425.8048 [email protected] 214.378.1746 (Juliana Rodriguez) [email protected] [email protected] ROBERT WATSON (H) Directors General Manager Chair-Elect, Treasurer and Nominating Hilton Anatole Hotel Committee Chair PAULA BLACKMON (C) 2201 N. Stemmons Freeway DAVE BROWN (O) * Councilmember Dallas, TX 75207 Chief Operating Officer/General Manager City of Dallas 214.761.7401 (Carrie Bosarge) American Airlines Center 1500 Marilla St., Room 5FS [email protected] 2500 Victory Avenue Dallas, Texas 75201 Dallas, TX 75219 214-670-4069 (Zoe Halfmann) GREG WHITE (H)* 214.665.4240 [email protected] General Manager [email protected] Westin Galleria Dallas CAROLYN DENT (H) * 13340 Dallas Parkway Cultural Tourism Committee Chair General Manager Dallas, TX 75207 MARY PAT HIGGINS (A) Omni Dallas Hotel 972.450.2901 CEO & President 555 South Lamar [email protected] Dallas Holocaust and Human Rights Museum Dallas, TX 75202 300 N. St. Paul Street 214.979.4540 (Therese Solis) MARK WOELFFER (H)* Dallas, TX 75202 [email protected] General Manager 469-399-5198 Sh e ra ton D allas Hotel [email protected] TONY FLORES (D/I) 400 N. Olive Street Chairman Dallas, TX 75201 Dallas Sports Commission Advisory Greater Dallas Hispanic Chamber of Commerce 214.922.0356 (Alice McDonald) Board Chair 1616 Woodall Rodgers Freeway [email protected] JAMES SMITH (B) Dallas, TX 75202 COO/CFO 214.486.4132 Ex-Officio Members FC Dallas Soccer, LLC [email protected] CRAIG T. DAVIS, CDME (O) * 9200 World Cup Way, Suite 202 President and CEO Frisco, TX 75033 HELEN GIDDINGS (C) VisitDallas 469.365.0089 (Christy Bohannon) President 325 N. St. Paul Street, Suite 700 [email protected] Metroplex, Inc. Dallas, TX 75201 400 S. Zang Blvd., Ste. 1018 214.571.1010 (Fanny Writesel) Diversity & Inclusion Committee Chair Dallas, TX 75208 [email protected] MARIA MENDEZ (B) * 214.943.1068 (Elaine Taylor) Senior Account Executive and Energy Vertical [email protected] ROSA FLEMING * Blue Cross Blue Shield of Texas Director, Convention & Event Services 5031 Stoneleigh Ave STEVE GOLDBERG (SI) City of Dallas Dallas, TX 75235 Senior Vice President Operations and 650 S. Griffin St. 817.726.1122 Hospitality Dallas, TX 75202 [email protected] Southwest Airlines 214.939.2755 (Brenda DeLeon) 2702 Love Field Dr. [email protected] Experience Committee Chair Dallas, TX 75235 STEVE KEMBLE (SI) 469.603.5237 (Rachel Conner) COURTNEY POGUE Owner [email protected] Director, Office of Economic Development Steve Kemble Event Design City of Dallas 2206 Marilla Street SCOTT GOLDSTEIN (SI) 1500 Marilla Dr. Dallas, TX 75201 Senior Vice President Dallas, TX 75202 214/943.5949 Dallas Regional Chamber 214.670.1696 [email protected] 500 N.
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