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Home My WebLink About95-09 Establish Business Improvement Area for Hotels and MotelsORDINANCE NO. 95-9 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, TO ESTABLISH A BUSINESS IMPROVEMENT AREA FOR CITY OF COSTA MESA HOTELS AND MOTELS. THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES HEREBY ORDAIN AS FOLLOWS: Section 1. The City Council of the City of Costa Mesa hereby finds and declares as follows: WHEREAS, the California Legislature in adopting the Parking and Business Improvement Area Law of 1989 (Streets and Highways Code § 36500 et. seq.) found that cities are authorized to levy assessments on businesses in order to promote economic revitalization and tourism, create jobs, attract new businesses and prevent erosion of business districts; WHEREAS, the California Legislature found that cities are authorized to levy assessments on businesses which benefit from those improvements and activities; WHEREAS, the purpose of the business improvement area is to fund activities to promote tourism and related tourist events which benefit the hotel and motel businesses within the City of Costa Mesa; WHEREAS, the major hotel and motel businesses within the City of Costa Mesa have requested that City Council commence proceedings under the Parking and Business Improvement Area law of 1989 to establish a hotel and motel business benefit area within the City of Costa Mesa and levy a special assessment to promote tourism; WHEREAS, on June 5, 1995, City Council adopted Resolution No. 95-44 entitled "A Resolution of the City Council of the City of Costa Mesa, California, on the Intention to Establish a Business Improvement Area for City of Costa Mesa Hotels and Motels;" WHEREAS, on June 19, 1995, and July 5, 1995, at City Hall, City Council Chambers, 77 Fair Drive, Costa Mesa, California, two public hearings were held concerning the establishment of the business improvement area; WHEREAS, on June 19, 1995, and July 5, 1995, City Council heard testimony from the hotel and motel owners on the assessment and no protests were filed or presented at the public hearings which required determination by City Council. WHEREAS, the business improvement area to be established pursuant to Streets and Highways Code Section 36500 et. seq. has the boundaries of the area and the boundaries of the benefit zone within the area as set forth in Exhibit A, attached hereto and incorporated herein by this reference. WHEREAS, on June 5, 1995, the City Council of the City of Costa Mesa appointed an advisory board to make recommendations to the City Council on the business improvement area and such report has been considered at the public hearing before this ordinance was adopted. Section 2. The City Council of the City of Costa Mesa by this ordinance does hereby: (a) Establish a business, improvement area with the name, "Costa Mesa Tourism & Promotion Council" and the business improvement area has boundaries and benefit zone set forth in Exhibit A, attached hereto and incorporated herein by this reference; and (b) Levy an assessment on businesses within the business improvement area as set forth in Exhibits A and B, attached hereto and incorporated herein by this reference. 2 Section 3. The City Council of the City of Costa Mesa does hereby further find and declare as follows: (a) The Costa Mesa Tourism & Promotion Council, business improvement area, is subject to any amendments to the Parking and Business Improvement Area Law of 1989; (b) The type or types of improvements and activities to be funded by the levy of assessments on businesses within the Costa Mesa Tourism & Promotion Council, business improvement area, are specified in Exhibits A and B, attached hereto and incorporated herein by this reference, and the improvements to be acquired for the business improvement area are specified in Exhibits A and B; (c) The Costa Mesa Tourism & Promotion Council, business improvement area, assessment shall be levied for one year to pay for all improvements and activities within the business improvement area as specified by this ordinance, except where funds are otherwise available; (d) The method and basis of levying the Costa Mesa Tourism & Promotion Council, business improvement area, assessment is set forth in Exhibits A and B; and (e) New hotel and motel businesses within the business improvement area and commenced after the effective date of the ordinance will be exempt from the levy of assessment, as provided in Exhibits A and B. (f) The revenue from the levy of assessments within the business improvement area adopted by this ordinance shall not be used to provide improvements or activities outside the area set forth in Exhibits A and B or for any purpose other than the purposes specified in the resolution of intention, Resolution No. 95-44, and modified by City Council at the hearing concerning the establishment of the area; 3 (g) Business, patrons of such business and the property subject to the business improvement area assessment are benefitted by the improvements and activities funded by the assessments levied by this ordinance, and will in promoting tourism, the businesses assessed benefit from tourist visits to their businesses; (h) The assessment levied by this ordinance shall be collected at the same time and in the same manner as the City of Costa Mesa Transient Occupancy Tax is collected pursuant to the Costa Mesa Municipal Code; (i) The City Manager or designee is hereby delegated authority by City Council to enter into the necessary agreements to retain a consultant and/or firm to administer and effectuate the improvements and activities set forth in the budget for the Costa Mesa Tourism & Promotion. Council, business improvement area, as set forth in Exhibits A and B; and 0) The advisory board for the Costa Mesa Tourism & Promotion Council, business improvement area, shall cause a report to be prepared and presented to City Council at the end of the fiscal year for this business improvement area assessment pursuant to Streets & Highways Code § 36533. Section 4. Publication. This Ordinance shall take effect and be in full force and effect thirty (30) days from and after its passage and, before the expiration of fifteen (15) days after its passage, shall be published once in the NEWPORT BEACH -COSTA MESA PILOT, a newspaper of general circulation printed and published in the City of Costa Mesa, or, in the alternative, the City Clerk may cause to be published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the office of the City Clerk five (5) days prior to the date of adoption of this Ordinance, and within fifteen (15) days after adoption, the City Clerk shall cause to be published the aforementioned 4 summary and shall post in the office of the City Clerk a certified copy of this Ordinance together with the names of the members of the City Council voting for and against the same. PASSED AND ADOPTED this 5� day of ATTEST: Deputy ity Clerk ofthe y of Costa Mesa 5 1995. APPROVED AS TO FORM: City Attorney 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 Ordinance No. 95-9 was introduced and considered section by section at a regular meeting of the City Council held on the 19th day of June, 1995, and thereafter passed and adopted as a whole at a regular meeting of the City Council held on the 5th day of July, 1995, by the following roll call vote: AYES: Erickson, Buffa, Hornbuckle, Genis, Monahan NOES: None ABSENT: None IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Seal of the City of Costa Mesa this 6th day of July, 1995. Z i Deputy CitClerk and ex -officio Clerk of the City Co ncil of the City of Costa Mesa EXHIBIT "A" The BID 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 generatedby the activities of the -BID. The following businesses' will, be included- in the business improvement area established .pursuant to-St"reets and Highways Code Section 36500 et. seq., the - businesses commonly known as:. 1. COUNTRYSIDE INN & SUITES ADDRESS: 325.& 345 Bristol Street - BUSINESS -OWNER: Bruce Ayers 1817 Westminster Avenue Newport Beach CA 92660 Donald Ayers, Jr. 506 Via Lido Nord Newport Beach CA 92658 PROPERTY OWNER: Homes By Ayers 355 Bristol Street, Suite A Costa'Mesa CA 9-2626 DATE CONSTRUCTED: 1986 & 1988 NUMBER OF UNITS: 180 & 111 2. RESIDENCE INN - COSTA MESA ADDRESS: 881 Baker Street BUSINESS OWNER: Residence Inn by Marriott 1 Marriott Way Washington -DC 02258 PROPERTY OWNER: Marriott Residence Inn Ltd. Partnership 10400 Fernwood Road Bethesda MD 20817 DATE CONSTRUCTED: 1986 NUMBER OF UNITS:. 144 3. RED'LION INN ADDRESS: 3050 Bristol Street BUSINESS OWNER: Raymond H. Bingham 4001 Main Street, Vancouver WA 98663 PROPERTY OWNER: 'Red Lion.Inn - Costa Mesa PO Box 1027 Vancouver WA 98666 DATE CONSTRUCTED: 1987 NUMBER OF UNITS:. 490 4. HOLIDAY INN ADDRESS: 3131 Bristol Street BUSINESS OWNER: Linquist & Craig Hotels No Address Provided PROPERTY OWNER: Abbot B: -Lipsky c/o California Inn Management, Inc. PO Box 688 Lawrence KS 66044 DATE CONSTRUCTED: 1973; 1986 - NUMBER OF UNITS: 234 5. WESTIN SOUTH COAST PLAZA HOTEL ADDRESS: .668 Anton Boulevard •BUSINESS OWNER: South Coast Westin - No Address Provided PROPERTY OWNER: Secon Properties. c/o South Coast Plaza Hotel 668 Anton Boulevard Costa Mesa CA 92626 DATECONSTRUCTED: 1975 NUMBER OF UNITS: 403 6.. W.YNDHAM GARDEN HOTEL ADDRESS: 3350 Avenue of the Arts BUSINESS OWNER:- Amgreen Heritage Hotel Partners Ltd. 31200 Via Colimas, Suite 202 Westlake Village CA 91362 - PROPERTY OWNER::- SAA .DATE CONSTRUCTED: 1987 NUMBER OF UNITS: 237 7. MARRIOTT SUITES ADDRESS:' -.500 Anton Boulevard BUSINESS OWNER: J. W. Marriott,,Jr. No Address Provided PROPERTY OWNER: Marriott Suites, Ltd. 1 Marriott Way Washington DC 20058 DATE CONSTRUCTED: 1989 NUMBER OF UNITS:. 255 EXHIBIT B The BID. assessment will be used to establish:, The Costa Mesa Tourism and Promotion Council (CMTPC). The CMTPC will actively fund activities to promote tourism and related tourist events which benefit the Hotel'and Motel businesses within the City of Costa Mesa. BID FY 95-96 BUDGET Expenditures' -Media Campaign — Creative Placement 125,000 Video Production and Distribution 30,000 Media Relations and Familiarization Trips 15 000 Brochures and Collateral Material , 75,000 - Trade Shows Booth Representation 20,000 Administrative and General Expenses . 10,000 Total Expense ' $275,000 Revenue 1 % levy on Hotel/Motel overnight room stay in the Hotels/Motels: listed in Exhibit "A" Total Revenue $275,000 Note: New Hotel/Motel businesses commenced after the effective date will be exempt from the levy of assessement. COSTA MESA TOURISM do PROMOTION COUNCIL PROPOSED BUSINESS METHOD AND BASIS 1OF LEVYAREA ING ASSESSMENT • During the calendar year January 1, 1994 through December 319 1994 the City of Costa Mesa received $1,8333,934 in Transient Occupancy Tax (TOT) from the City's seven (7) largest hotels. • The seven (7) hotels and their respective guestroom counts are: - Red Lion 484 Westin South Coast Plaza 390 Countryside Inn & Suites 285 Marriott Suites 253 Wyndham Garden 238 Holiday Inn 229 Residence Inn 144 Total 2.023 • Inasmuch as TOT is charged at the rate of sL%-6 ()percent on taxable overnight guestroom sales, this means that there was $30,565,567 in taxable sales generated by the City's seven (7) largest hotels. • . There were 738, 385 "guestrooms available for sale" in 1994 amongst the seven (7) hotels (i. e., 365 days x- 2,023 rooms per day) . • Therefore, the "room revenue per available room" (REVPAR) for the seven (7). hotels in 1994 was $41:39 ($30,565,567 j 738,385). • The BIA's budget for the period August 3, 1995 through June 30, 1896 is $275.,000. This represents .approximately .37 cents per available room ($275,000 1.738,395). • Therefore, 'a hotel which. has a REVPAR of $41: 39 can expect .37 cents per available room per year to fund. the BIA in is first year of operation. • Any hotel which has a REVPAR greater or lesser than $41.39 can expect to be assessed on the basis of ' the arithmetic relationship (factor) that can be derived between the hotel's REVPAR and $41.39 and then -multiplying that factor by .37 cents times the hotel's available rooms per year. • In no event shall a hotel be assessed more than 1$ of its taxable sales in any given year. guestroom EX. 06 COSTA MESA TOURISM & PROMOTION COUNCIL,, BUSINESS WROVM&ENRE T AREA (B.I.A BUDGET: PROPOSED STRATEGIC INITIATIVES & TACTICS " FOR THE YEAR, AUGUST 3, 1995 - JUNE 30, 1996 Media Campaign: Creative Development and Media Buy A campaign would be developed consisting of three or four ads which would establish the positioning and name recognition of Costa -Mesa as an attractive destination providing desirable amenities, value and easy would be utilized in key feeder markets of leisure travelers o Orange County. with emphasis on shopping, attractions, cultural activities, holiday and special events.. An advertising campaign and media schedule would also be developed for the meetings and conferences target audiences. Creative and Development $40;000 Media Buy $85, 000 Estimated Costs $12,000 Video Production and Distribution. For a variety of applications, ranging from cable television ' opporturif ties to hotel presentations and sales calls, a 5 - 7 minute video of Costa Mesa would be produced and distributed. It would cover such areas as the arts, shopping, attractions, location, etc. Provision would be made for a. short "leader" to be inserted at the beginning of the tape in order, to customize the video for the particular organization being solicited. Estimated Costs $30,000 Media Relations & Familiarization Trips An initiative would be undertaken to work with'the local, regional and national print Media, actively pitching stories about Costa Mesa. Regular press releases would be developed to travel and business writers regarding activities taking place in Costa Mesa highlighting shopping, cultural events, activities, etc. Invitations would be issued to travel writers and travel agents to come to Costa Mesa for a familiarization visit. Estimated Costs $159000 Brochures & Collateral Material A comprehensive brochures and collateral program (visitor's guide, rack brochure, Costa Mesa destination newsletter, etc.) would be developed in order to present consistent, accurate Costa Mesa information in a creative, uniform, progressive style. These materials would be distributed to meeting planners, travel agents in feeder cities, the media, and so on. Estimated Costs., $75,000