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HomeMy WebLinkAbout01-44 - Levying an Annual Assessment for FY 2001-2002, Business Improvement Area (Hotels and Motels)RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, LEVYING AN ANNUAL ASSESSMENT FOR FISCAL YEAR 2001-02 FOR A BUSINESS IMPROVEMENT AREA COVERING CERTAIN COSTA MESA HOTELS AND MOTELS. A. WHEREAS, the California Legislature, in adopting the Parking and Business Improvement Area Law of 1989 (Streets & Highways Code Sections 36500 et'seq.), found that cities are authorized to. levy assessments on businesses in order to promote economic revitalization and tourism, to create jobs, attract new businesses and prevent the erosion of business districts; and B. WHEREAS, on July 5, 1995, by Ordinance No. 95-9, the City Council adopted a business improvement area, known as the Costa Mesa Tourism & Promotion Council, whose name is concurrently being changed with this resolution to the Costa Mesa Tourism & Promotion Bureau Business Improvement Area, the purpose of which is to promote tourism to the City of Costa Mesa and to fund programs and activities that benefit the hotel and motel businesses within the City; and C. WHEREAS, on June 5, 1995, by Resolution 95-44, the City Council appointed specific persons who were the general managers of the seven hotels subject to the assessment area to serve as the advisory board as required by California Streets and Highways Code Section 36530; and D. WHEREAS, after the formation of the Costa Mesa Conference and Visitor Bureau (the "CMCVB"), it has become the practice to have the board members of the CMCVB, which consists of the general managers of the seven hotels and two City representatives to serve as the advisory board; and E. WHEREAS, it is more effective to have a general designation of the advisory board members because the Board of Directors changes when a general manager of a participating hotel leaves and by doing so, will prevent the City Council from having to adopt a new resolution whenever there is a change of general managers at one of the participating hotels; and F. WHEREAS, the City Council has voted to continue the special assessment for the business improvement area each year since its inception, including the adoption on July 6, 1999, of Resolution No. 99-47, authorizing the assessment for fiscal year 1999-2000; and G. WHEREAS, in January, 2000, the CMCVB requested, and the City Council approved, a request to raise the assessment from one percent (1 %) to two percent (2%), which is based on the sale of overnight room stays; and H. WHEREAS, on May 21, 2001, the City Council adopted Resolution No.01-32, entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DECLARING ITS INTENTION TO LEVY AN ANNUAL ASSESSMENT FOR FISCAL YEAR 2001-2002 FOR A BUSINESS IMPROVEMENT AREA COVERING CERTAIN COSTA MESA HOTELS AND MOTELS AND SETTING THE TIME AND PLACE OF A PUBLIC HEARING ON PROPOSAL"; and I. WHEREAS, at its meeting on May 21, 2001, the City Council of the City of Costa Mesa approved the 2001 Annual Report of the Costa Mesa Conference & Visitor Bureau submitted on May 21, 2001, and such "report, attached hereto as Exhibit "C" and incorporated herein by this reference, has been considered at the public hearing before this Resolution was adopted; and J. WHEREAS, on July 2, 2001, in the Council Chambers of City Hall, 77 Fair Drive, Costa Mesa, California, a public hearing was held concerning the annual assessment for the business improvement area and no protests of the proposed assessment were filed or presented;. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Costa Mesa as follows: 1) An assessment for the Costa Mesa Tourism & Promotion Business Improvement Area is levied for fiscal year 2001-2002 pursuant to Streets & Highways Code Sections 36500 et seq. The boundaries of the Business Improvement Area are the seven motels and hotels listed in Exhibit A, attached hereto and incorporated herein by this reference. 2) The amount of the annual assessment on the business owners shall be computed using the following formula: two percent (2%) of the gross revenue from the sale of hotel overnight guest room stays. New hotel and motel businesses commenced after the effective date of this Resolution will be exempt from the levy, pursuant to Streets & Highways Code Section 36531 and Section 36535. 3) The business owners shall pay the assessment to the Costa Mesa City Finance Department on a monthly basis. 4) The method and basis of levying the assessment to allow each business owner to estimate the amount of the assessment to be levied against his or her business is set forth in Exhibit B. 5) The type or types of activities to be funded by the levy of assessments within the Business Improvement Area are specified in Exhibit C. 6) Each business owner (hotel/motel) shall separate the Business Improvement Assessment from the Transient • Occupancy Tax on their guest billing statements. The specific term "Business Improvement Assessment" shall be included on the billing to identify the assessment amount. BE IT FURTHER RESOLVED that the City Council of the City of Costa Mesa, California, by this . Resolution, does hereby levy an assessment for fiscal year 2001-02 on business owners within the Costa Mesa Tourism & Promotion Business Improvement Area, as set forth in Exhibits "A" and "B" attached hereto. BE. IT FINALLY RESOLVED that the City Council of the City of Costa Mesa, California, by this Resolution, appoints the board of directors of the Costa Mesa Conference and Visitor Bureau as the advisory board of the Costa Mesa Tourism & Promotion Business Improvement Area. PASSED AND ADOPTED this 2"d day of July, 2001. M-ayor of of • ATTEST: 2L., T' APPROVED AS 4EY M Deputy City C k of the City of Costa Mesa /4, -CITY AT STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, MARY T. ELLIOTT, Deputy City Clerk and ex -officio Clerk of the City Council of the City of Costa Mesa, hereby certify that the above and foregoing Resolution No. /- was duly and regularly passed and adopted by the said City Council at a regular meeting thereof held on the 2"d day of July, 2001, IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Seal of the City of Costa Mesa this 3`d day of July, 2001. T. Deputy Citylerk and ex -officio Clerk of the City Co ncil of the City of Costa Mesa EXHIBIT A The Business. Improvement Area ("BIA") benefit zone encompasses the entire City of Costa Mesa boundaries. It is anticipated that the entire City, including businesses and residents, will benefit from increased revenues generated by the activities financed by the BIA assessment. The following businesses will be included in the BIA that is established pursuant to Streets & Highways Code Section 36500 et seq., the businesses commonly known as: 1. Country Inn and Suites by Ayres Property Address: 325 and 345 Bristol Street, Costa Mesa Business Owner: Bruce Ayres 1817 Westminster Avenue Newport Beach, Ca. 92660 Donald Ayres, Jr. 506 Via Lido Nord Newport Beach, CA 92626 Property Owner: Homes by Ayres 355 Bristol Street, Suite A Costa Mesa, CA 92626 2. Hilton Hotel Property Address: 3050 Bristol Street, Costa Mesa Business Owner: Hilton Corporation 9336 Civic Center Drive Beverly Hills, CA 90210 3. Holiday Inn Property Address: Business Owner: Property Owner: 3131 Bristol Street, Costa Mesa Hanford Hotels, L.L.C. Abbot B. Lipsky c/o Hanford Hotels, L.L.C. 4 Corporate Plaza, Suite 102 Newport Beach, CA 92660 4. Costa Mesa Marriott Suites Property Address: 500 Anton Boulevard, Costa Mesa Business Owner: J.W. Marriott, Jr. Property Owner: Marriott Suites, Ltd. 1 Marriott Way Washington, D.C. 02258 5. Residence Inn by Marriott . Property Address: 881 Baker Street, Costa Mesa Business Owner: Residence Inn by Marriott 1 Marriott Way Washington, D.C. 02258 Property Owner: Marriott Residence Inn Ltd., Partnership 10400 Fernwood Road Bethesda, Maryland 20817 6. The Westin South Coast -Plaza Property Address: 668 Anton Boulevard, Costa Mesa Business Owner: South Coast Westin Property Owner: Secon Properties C/o South Coast Plaza Hotel 668 Anton Boulevard Costa Mesa, CA 92626 7. Wyndham Hotel Property Address: 3350 Avenue of the Arts, Costa Mesa Business Owner: Amgreen Heritage Hotel Partners Ltd. 31200 Via Colimas, Suite 202 Westlake Village, CA 91362 EXHIBIT B The BIA assessment will be used to fund The Costa Mesa Conference & Visitor Bureau ("CMCVB"). The CMCVB will fund activities to promote tourism to the City of Costa Mesa and will sponsor related tourist events that benefit the hotel and motel businesses within the City. The specific improvements and activities to be funded by this assessment are outlined in the 2000 Annual Report by The Costa Mesa Conference & Visitor Bureau, which is attached hereto as Exhibit C. Revenue A two percent (2%) levy will be assessed against each of the seven hotels listed in Exhibit A, based on the gross revenue from the sale of overnight room stays. Business owners shall pay the assessment to the Costa Mesa City Finance Department on a monthly basis Note: New hotel and motel businesses commenced after the effective date of this Resolution will be exempt from the levy of assessment. EXHIBIT C Exhibit "C" consists of the 2001 Annual Report submitted by the Costa Mesa Conference & Visitor Bureau on May 21, 2001. Calijornia l Mesa 1esa The Best Of Southem Cagomia. 2001-2002 Annual Report Submitted By: The Costa Mesa Conference & Visitor Bureau May 14, 2001 Costa Mesa Tho Boat Of Suuthcm California. May 1, 2001 City of Costa Mesa 77 Fair Drive Costa Mesa, California 92627-6520 Dear Council Members: In accordance with the provisions of the Business Improvement Area (BIA) we submit for your approval the Annual Report of the Costa Mesa Conference & Visitor Bureau (CMCVB), now in its sixth year of operation. The Costa Mesa CVB was established tc increase awareness of Costa Mesa as a visitor destination with the goal of increasing awareness, hotel occupancy, travel spending, tax revenues and further contributing tc the growth of the local economy. This past year the Costa Mesa CVB expanded its scope and influence. The Bureau "team" includes the seven hotel General Managers, three employees managing the day to day operations, the creation of marketing materials and sales efforts; Pittman & Associates implementing public relations and advertising placement and Lamas Accounting managing the financial details. The hotel Marketing Directors meet regula -ly to evaluate the marketing efforts, travel and occupancy trends and submit their marketing ideas to the CVB Board of Directors. The seven General Managers in conjunction with Councilwoman Linda Dixon and City Manager Allan Roeder have met regularly, without compensation, to further the image and economic development of Costa Mesa as a destination. The required contents of the Annual Report are detailed in Section -6533 of theStreE=ts and Highway Code. The format is as follows: • Any proposed changes in the boundaries of the BusinesEi Improvement Area or in any benefit zones within the area. The Advisory Board recommends that the entire city continue to be included in the benefit zone. Further, the Advisory Board recommends that the number of properties included in the boundaries remain the same. If additional properties Page 1 of 11 Costa Mesa Conference & Visitor Bureau • 3> 714,4 P•0• Box 5071, Costa Mesa, California 92628-5071 .2 109 800.399.5499 • fax 714 Gzc Q Z) ) H 31 31 wish to participate, they are invited to attend meetings the year before assessment, be in good standing with the City of Costa Mesa and meet certain AAA quality standards. �+ The improvements and activities to be provided for the Fiscal Year. The Advisory Board recommends that the 2% assessment levy on the sale of �I hotel overnight guest room stays continue to be used to fund tourism activities for the hotels. ' During the sixth year, the Costa Mesa Conference & Visitor Bureau focused on generating business for the hotels while increasing awareness of Costa Mesa as a leisure travel destination. The Bureau has accomplished or is in process of the completing the following projects and programs: Marketing Materials The marketing "package" includes a destination brochure, rack card (English, Spanisr & Portuguese), hotel and dining brochures, 2000 & 2001 activities/events brochures and CD Rom were distributed to travel writers, hotels, the City of Costa Mesa, Costa Mesa Chamber of Commerce, inquiries and meetings booked in the hotels. t Calendar of Events A quarterly calendar providing information on activities, arts, cultural events, and special promotions was sent to more than 350 travel editors across the country, travel agents. j to inquiries generated by advertising, CVB hotels, City of Costa Mesa, Costa Mesa Chamber of Commerce and to other local venues as requested. "Gift From Us To You" The "Gift From Us To You" includes 24 special restaurants, arts and retail offers that reinforce the many amenities in Costa Mesa, provide additional value to the guest anr:l also generates additional business for the certificate participants at no cost to them. This package is given. to guests upon check-in. The California Department of Tourism judged the "Gift From Us To You" the Best Cooperative Marketing Program Award at the March 2001 Conference on Tourism. Promotional Items Key to the City, polo shirt, paper cube, CD leather case, ceramic coaster, candies anc.. tote on the rope were distributed to hotels and the City of Costa Mesa to give to clients, guests and YIPS. Page 2 of 11 Web Site (www.costamesa-ca.coni) The web site address is included on all advertising and marketing materials. In 2000/2001 the website recorded 1,142,000 hits and 208,000 page views. The site has been modified to include video, the quarterly calendar of events and tf E! Meeting Facilities Guide. Logo The logo and tag line ("Costa Mesa. The Best Of Southern California.") have been incorporated into marketing brochures, advertisements and promotional items. Telephone/Business Reply Inquiries The 800# Hotline -Answer Network received more than 4500 inquiries in 2000/2001 (over double the previous year). Answer Network responded to telephone inquiries followed by sending a cover letter and brochure, in addition to serving as a fulfillment: house for reader service cards generated by magazine and newspaper advertising. Beginning January 1, 2001, fulfillment is done in-house with Answer Network's prime responsibility is answering the 800#. This has saved the Costa Mesa CVB more than $3400 annually. Business Reply Inquiries (more than 15,000) from advertising are input and maintained in a database that enables the hotels and the Bureau to implement direct mail promotions to targeted audiences. Over 260 group meeting leads were received from advertising in Meetings in the West magazine and were contacted by the CVB and the hotels. Advertising During Fiscal Year 2000/2001 the Bureau implemented an aggressive print and radio advertising campaign with more than 20,620,900 impressions targeting markets (Los Angeles, Phoenix/Tucson, Palm Springs, Fresno/Bakersfield and San Francisco) that: have the potential to generate weekend, summer and holiday room business. The campaign continues to position Costa Mesa as "The Best Of Southern California," reinforcing a highly desirable location offering a variety of amenities. The campaign used one color and four color ads reinforcing Costa Mesa's proximitj to Southern California's pristine beaches and the central location to major attractions such as Disneyland, Disney's California Adventure, Knott's Berry Farm and L.egoland. Page 3 of 11 Advertising continues to provide measurable results through telephone calls, businE:s;:; reply cards, and business booked directly with the hotels. The Costa Mesa CVB partnered with five other CVBs via the Orange County Tourisn- Consortium. The Consortium was allocated $750,000 per year for three years by the Orange County Board of Supervisors to create and implement an advertising campaign that markets the Orange County destination. In 2000 the consortium parlayed the $750,000 in editorial plus community partners advertising with a total value of $2.3 million. This maximized Costa Mesa's exposure and saved the CVB over $39,000 in advertising dollars. Consumer/General Magazines Sunset Travel & Leisure South West Airlines in flight magazine Los Angeles Magazine The Tourist (Amtrak) Trade Publications (In house ad insertions saved more than $3400 annua ly in commissions.) Meetings in the West Successful Meetings The Meeting Professional Orange County Business Journal Western Association News Meeting Planners International Directory National Business Travel Association Convention Resource Guide National Business Travel Association California edition Newspapers Los Angeles Times Travel Section San Francisco Chronicle Phoenix Republic Fresno Bee Bakersfield California San Bernardino News Tucson Star Citizen San Jose Mercury Page 4 of 11 Other Media 2001 California Visitors Guide Anaheim/Orange County Visitor Guide Anaheim Meeting & Convention Planning Guide Costa Mesa Chamber of Commerce Map South Coast Metro PocketBook Anaheim/Orange County Visitors Guide California Holidays (United Kingdom) World Travel Guide (Europe) California Department of Tourism website Radio stations in southern and central California Public Relations Press releases and press kits highlighting Costa Mesa as a leisure travel destination were sent to 350 travel and business media on a regular basis. Stories on Costa Mesa havE; been printed in several magazines and newspapers. Press Kits were distributed to domestic and international travel writers at POW WOW, La Cumbre, Society of America Travel Writers with press releases in English, Spanish and Portuguese. "Beat the Heat Promotion" (May -September) The•"Beat the Heat" summer campaign was targeted to potential travelers fron- Phoenix, Tucson, Palm Springs, and southern and central California via airline and travel magazines, Sunday newspaper travel sections and radio. "Shop Like the Dickens" Holiday Promotion (November -January) This traditional holiday promotion was designed to encourage overnight stays and increase holiday shopping. The promotion included a complimentary holicI iy gift filled with shopping and dining offers and was advertised in Sunset Magazine, Los Angeles Magazine, and the San Francisco Chronicle. "Shop Like the Dickens" direct mail piece created in conjunction with American Express was sent to 75,000 American Express card holders, distributed to 33 American Express stores in the Western Region and inserted in the American Express Custom Extras statement offers. Page 5 of 11 Room nights generated: 747 (Room nights doubled from 1999 promotion) Revenue generated: $92,500 January 1-14, 20001 The first two weeks of the year are traditionally low occupanc!/ periods. The CVB advertised in the Los Angels Times Sunday Travel Section offering special rates. Room nights generated: ,li38 Revenue generated: $57,500. This was "found" business for the hotels.. April 13-29,2001 The two weeks around Easter are traditionally lower occupancy periods. The CVB advertised in the Los Angles Times Sunday Travel Section with radio supplementing the print advertising. Room nights generated: '60 Revenue generated: x;23,84.0 UPG Sports The Costa Mesa CVB continued sponsoring (two year commitment) UPG Spo[*-:s Tournaments held at venues in Irvine and Costa Mesa from May through July 2001. All seven CVB hotels offer special UPG rates and room blocks over this time period. Room nights generated: 750 Revenue generated: 950,000 Costa Mesa/Orange County Classic Jazz Festival Costa Mesa CVB sponsored the First Annual Jazz Festival. Room nights generated: x'82 Revenue generated: $111,946 Total revenue generated: $133,385 Trade; Shows Attended La Cumbre, Anaheim; California Travel Mart in Palm Springs and P(D W WOW in Orlando exposed to more than 700 national and international tour operators with 63 specifically interested in California and Orange County. The CVB created a series of three printed screens used in the trade show boolh that are easily and inexpensively shipped for out of state trade shows and conventions. Page 6 of 11 Partnerships Partnerships have been strengthened with Orange County Tourism Council and Orange County Tourism Consortium in addition to working cooperatively with Newport Beach and Huntington Beach Convention &Visitor Bureaus. Comrnunity Outreach A quarterly newsletter is faxed to Costa Mesa retailers, restaurants and arts groups providing information on programs and promotions targeting the visitor market. Marketing Committee The hotel sales and marketing directors, Orange County Perf(Drming Arts Center, South Coast Repertory, South Coast Plaza, Costa Mesa Fair & Exposition Center and Metro Pointe meet bi-monthly. This committee oversees the development of short and long-term strategic marketing, advertising programs, special promotions, events and packages. Each of the seven hotels are allocated quarterly marketing dollars based on thr,ir total number of guest rooms. These funds enable each hotel -to do some niche marketing. They must include the Costa Mesa CVB logo, justify that the advertising or direct mail increases room business and include a sample ad or direct mail piece or flyer. • An Estimate of the cost of providing the activities for the fiscal year. The estimated amount of the assessment to be levied against the businesses, for the fiscal year. The amount of surplus or deficit or revenue carried frc n the previous fiscal year. Page 7 of 11 The Advisory Board has prepared the following Financial Summary detailing the actual revenues and expenses for 2000/01 and proposed fiscal year 2001/02. Revenues Projected YR6 Actual YR6 Projected Y.R7 2000/2001 2000/2001 2001/20102 Beginning Balance $ 128,325.00 July $ 91, 800.00 $ 84,155.00 $ 84,100.00 August $ 89,600.00 $ 116,955.00 $ 11 0,00C.00 September $ 81,700.00 $ 86,219.00 $ 86,OOC.00 October $ 86,000.00 $ 124,944.00 $ 120,00C.00 November $ 89,300.00 $ 86,280.00 $ 86,30C.00 December $ 64,200.00 $ 68,839.00 $ 68,800.00 January $ 79,400.00 $ 89,560.00 $ 89,50C.00 February $ 73,600.00 $ 101,427.00 $ 101,40C.00 March $ 99,200.00 $ 99,200.00 $ 99,200;.00 April $ 70,000.00 $ 70,000.00 $ 70,00C,.00 May $ 84,000.00 $ 84,000.00 $ 84,000.00 June $ 74,000.00 $ 74,000.00 $ 74,OOC.00 'notal Revenue (;Revenues do not $ 982,800.00 $1,213,914.00 $ 1,073,300.00 include interest.) Revenues for 2000/2001 were projected to remain the same as the previous year. Revenues for 2001/2002 are projected to remain flat and may decrease due to uncertainties in the economy. Budget Expense Projections for fiscal 2001/2002 (See attached Marketing Plan for details) Page 8 of 11 Expenses Projected YRi' Advertising Campaign Media Relations & Fam Tours $431,200.01) Brochures/Promotional items $44,100.()(,) Trade Shows $105,500.()(:) Administration/General $24,100.()() Special Promotions $263,500.0() Contingency Fund $50,800.01:) City Council Program $36,000.01.) Hotel Marketing Program $10,000.01:) $101,900.01.) Total Expenses $1,067,100.01) Advertising Campaign The 2001/2002 advertising campaign continues to aggressively generate: awareness for weekends, summer ("Beat the Heat" campaign) and holidays ("Shop Like The Dickens" campaign) -reinforcing Costa Mesa eu; a leisure travel destination as well as a meeting destination. This expen:sc! includes design, proc►uction, buying space in print media and radio. Estimated Expense x;431,200 • Media Relations & Familiarization Trips We will continue to develop awareness and reinforce the Costa Mesa destination through press releases to regional and national publications, familiarization trips fcr travel press, meeting planners and group tour operators. Estimated Expense $44,100 Page 9 of 11 ,X7 • Marketing Materials Brochures, rack cards, calendar of events, CD Rom, Internet site and other marketing materials were updated and distributed to the State of California Welcome Centers and John Wayne Airport, inquiries, travel agents, tour operators, conference attendees, trade shows and meeting planners. Estimated Expense $89,800 Promotional Items Paper Cubes, CD Rcm leather holders, playing cards, and beach towel, are available to further promote the Costa Mesa destination. Estimated Expense $15,700 • Trade Shows/Conventions The Costa Mesa CVE3 will attend several trade shows focusing on international tour operators, meeting planners and travel managers. Estimated Expense $24,100 • Administrative & General (Expenses Answer Network will continue to answer the 800#. This category include3 employee expenses, accounting fees, postage, insurance, city collectic fee and administrative expenses. Estimated Expenses $263,500 Special Promotions/Sponsorships Special promotions include "A Gift From Us To You," expenses associated with attracting UPG Sports Groups, Orange County Tourism Service Awards, Jazz Festival and other sponsorship opportunities. Estimated Expenses $50,800 • Hotel Marketing Program This program enable:; each hotel to implement "niche" marketing via advertising, direct mail, and flyers. It must generate room business. Estimated Expenses: $101,900 City Council Program Funds are allocated for special programs initiated by the City Council that promote the city and has the potential to generate roorn business. Estimated Expenses: $10,000 Page 10 of 11 • Contingency Fund Beginning in March 2000, ;3000 per month for 36 months will be allocated for the Contingency Fund to provide funds for any unexpect� c, expenses or a decre�jse in revenues. Estimated Annual Expense $36,000 The Advisory Board supports and enthusiastically works as a team t,:)ward the succe,,„ Of the: Costa Mesa Conference & Visitor Bureau. Advisory members Linda Dixon and Allan Roeder continue to contributf3 their ideas and perspectives to the overall marketing efforts. We appreciate the opportunity Council to continue the support of -the Costa Mesa CVged by the Costa Mesa City. Re" e tfully ants;- General Manager, Hilton Costa Mesa President, Costa Mesa Conference & Visitor Bureau Page 11 of 11