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Greater Palm Springs Tourism Business Improvement District Management District Plan

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Greater Palm Springs Tourism Business Improvement District Management District Plan t 2021-2031 GREATER PALM SPRINGS TOURISM BUSINESS IMPROVEMENT DISTRICT MANAGEMENT DISTRICT PLAN Prepared pursuant to the Property and Business Improvement District June 5, 2020 Law of 1994, Streets and Highways Code section 36600 et seq. CONTENTS I. OVERVIEW ............................................................................................................... 3 II. BACKGROUND ....................................................................................................... 5 III. ACCOMPLISHMENTS .............................................................................................. 6 IV. BOUNDARY .............................................................................................................. 8 V. BUDGET AND SERVICES ....................................................................................... 10 A. Annual Service Plan ............................................................................................. 10 B. Annual Budget ..................................................................................................... 12 C. California Constitutional Compliance ............................................................. 12 D. Assessment ............................................................................................................ 14 E. Penalties and Interest .......................................................................................... 15 F. Time and Manner for Collecting Assessments ................................................. 15 VI. GOVERNANCE ...................................................................................................... 16 A. GPSTBID Management ........................................................................................ 16 B. Brown Act and California Public Records Act Compliance ......................... 16 C. Annual Report ....................................................................................................... 16 APPENDIX 1 – LAW ........................................................................................................... 17 APPENDIX 2 – ASSESSED BUSINESSES ............................................................................. 28 APPENDIX 3 – BENEFITS BY ASSESSED BUSINESS TYPE ….. ..................................... .... 172 Prepared by Civitas (800)999-7781 www.civitasadvisors.com I. OVERVIEW Developed by the Greater Palm Springs Convention & Visitors Bureau (CVB) and Greater Palm Springs lodging businesses, the Greater Palm Springs Tourism Business Improvement District (TBID) is an assessment district proposed to provide specific benefits to payors, by funding tourism marketing and sales promotion efforts for assessed businesses. This approach has been used successfully in other destination areas throughout the country to provide the benefit of increased overnight visitors and additional room night sales directly to payors. Location: The renewed TBID includes all lodging businesses with fifty (50) rooms or more and all vacation rentals located within the boundaries of the cities of Desert Hot Springs, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Indian Wells, La Quinta, and Indio and portions of the unincorporated area of Riverside County in the Western Coachella Valley, as shown on the map in Section IV. Services: The TBID is designed to provide specific benefits directly to payors by creating sales and marketing programs with the goal of increasing overnight visitation and room night sales. In addition to sales and marketing programs, the CVB Board of Directors will establish key priorities each year. For example: key programs may include air service and rail development, work force development, research and analytics, educational support, and more. Budget: The total TBID annual budget for the initial year of its ten (10) year operation is anticipated to be approximately $17,000,000. This budget is expected to fluctuate as room sales do. Cost: The annual assessment rate is three percent (3%) of hotels’ gross short-term room rental revenue, and one percent (1%) of vacation rentals’ gross short- term room rental revenue. Based on the benefit received, assessments will not be collected on stays of more than twenty-seven (27) consecutive days. Collection: The CVB, Cities and/or County will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business with fifty (50) rooms or more and each vacation rental located in the boundaries of the TBID. The CVB, Cities and/or County shall take all reasonable efforts to collect the assessments from each assessed business. Duration: The renewed TBID will have a ten (10) year life, beginning July 1, 2021 through June 30, 2031. Once per year, beginning on the anniversary of TBID renewal, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate a hearing on TBID termination. TBID Management District Plan 3 June 5, 2020 Management: The CVB is charged with managing funds and implementing programs in accordance with this Plan. TBID Management District Plan 4 June 5, 2020 II. BACKGROUND TBIDs are an evolution of the traditional Business Improvement District. The first TBID was formed in West Hollywood, California in 1989. Since then, over 100 California destinations have followed suit. In recent years, other states have begun adopting the California model – Montana, South Dakota, Washington, Colorado, Texas and Louisiana have adopted TBID laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to form a TBID. And, some cities, like Portland, Oregon and Memphis, Tennessee have utilized their home rule powers to create TBIDs without a state law. California’s TBIDs collectively Number of TIDs Operating Nationwide raise over $427 million 200 annually for local destination 180 marketing. With competitors 160 raising their budgets, and 140 increasing rivalry for visitor 120 100 dollars, it is important that 80 Greater Palm Springs lodging 60 businesses and vacation 40 rentals invest in stable, 20 industry-specific programs. 0 2006 1995 2000 2001 2002 2003 2004 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1989 TBIDs utilize the efficiencies of private sector operation in the market-based promotion of tourism districts. TBIDs allow assessed business owners to organize their efforts to increase demand for overnight visitation and room night sales. Assessed business owners within the TBID pay an assessment and those funds are used to provide services that increase demand for overnight visitation and room night sales. In California, TBIDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TBIDs and other benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district. There are many benefits to TBIDs: Funds must be spent on services and improvements that provide a specific benefit to those who pay; Funds cannot be diverted to general government programs; They are customized to fit the needs of payors in each destination; They allow for a wide range of services; They are designed, created and governed by those who will pay the assessment; and They provide a stable, long-term funding source for tourism promotion. TBID Management District Plan 5 June 5, 2020 III. ACCOMPLISHMENTS The following examples demonstrate how the CVB has utilized Tourism Business Improvement District funds to create ongoing increased demand for overnight visitation and room night sales. Improved Brand Image - According to SMARI’s 2018 Image Awareness Study, significant gains were seen since the 2011 study in perceptions of Greater Palm Springs across all image attributes, from safety and atmosphere to natural beauty and affordability. Increased Demand for Lodging – In 2009, the annual occupancy was 50%. Since the Tourism Business Improvement District went into effect in 2009, assessed lodging businesses in Greater Palm Springs have seen a steady increase in demand, stimulating sustained economic development and growth. And CVB-generated lodging revenues grew from $984 million in 2013 to $1.735 billion in 2019. Average annual hotel occupancy grew from 58% in 2013 to over 62% in 2019. Increased Average Daily Rate and RevPAR – The average daily rate grew 27% from $129.00 in 2013 to over $165.00 in 2019. RevPAR grew 38% from $77.43 in 2013 to $107.04 in 2019. Growth of Air Service - Air service (number of airlines and flights serving PSP) increased 53% from 2013 to 2019 in Greater Palm Springs. The current 29,096 annual flights into Palm Springs International Airport (PSP) equates to a capacity of 3,274,729 annual passenger seats in and out of PSP. Improved accessibility translates to visitation growth from both nonstop and connecting fly (vacation) markets. There are currently more than 20 cities with nonstop air service to PSP. Notable flight additions in 2019 include Alaska Airlines’ Everett (WA) service, Contour Airlines’ Sacramento flight and Delta’s Atlanta flight offered 4 times per week. Event Attraction - Tourism Business Improvement District marketing funds enabled the CVB to attract large-scale, high-profile
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