Item 138/2025
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Ursula Luna-Reynosa
Dept:
City Manager Dept: Economic Development and
Housing
Date: 4/22/2025
Subject: Approval of the Garden Grove Tourism Improvement District Advisory Board's 2025-26 Annual Report and adoption of a Resolution Declaring the City’s Intention to levy assessments for Fiscal Year 2025-26 setting the time and date to conduct a public hearing on the proposed assessment. (Action Item)
OBJECTIVE
For the City Council to approve the Annual Report (“Annual Report”) of the Garden Grove Tourism Improvement District (“GGTID”) Advisory Board ("Advisory Board") and adopt a Resolution declaring intention to levy assessments for Fiscal Year 2025 -26 for the Garden Grove Tourism Improvement District (GGTID) and setting a public hearing thereon.
BACKGROUND
The GGTID was established by the City Council in accordance with the Parking and Business Improvement Area Law of 1989, California Streets and Highways Code Section 36500 et seq. (the "Law") through the adoption of Resolution No. 9009 -10 on August 24, 2010, and Ordinance No. 2782 on October 26, 2010. The purpose of the GGTID is to provide revenue to defray the costs of advertising and marketing efforts designed to increase overnight stays in the GGTID, construction and maintenance of improvements in the GGTID, and o ther services, activities, and programs that promote and encourage tourism within the GGTID, which benefit the operators of hotels paying assessments through the promotion of scenic, recreational, cultural, and other attractions.
The GGTID includes the ho tels along Harbor Boulevard from the northern boundary within the City to Garden Grove Boulevard. It is divided into two (2) separate benefit zones:
Tier I includes the hotels north of Lampson Avenue, which are subject to an assessment of up to 2.5% of gross rent charged per room occupancy per night.
There are currently nine (9) hotels in Tier I.
Tier II encompasses those hotels south of Lampson Avenue, which are subject to an assessment of up to 0.5% of gross rent charged per room occupancy per night. There is currently one hotel in Tier II, The Great Wolf Lodge Southern California.
Item 138/2025
Pursuant to the Law and the Ordinance, the City Council is required to annually 1) approve the Annual Report (as recommended by the Advisory Board or with modifications) and 2) adopt a resolution of intent to levy the assessment and set a date for the public hearing.
DISCUSSION
Annual Report
In accordance with Ordinance No. 2782, the Board of Directors of the Garden Grove Tourism Promotion Corporation (GGTPC) serves as the Advisory Board. Pursuant to the Ordinance and the Law, the Advisory Board is required to submit an annual report to the City. The annual report is required to include the following:
Any proposed changes in the boundaries of the GGTID or in any of the benefit zones;
A description of the improvements and activities to be provided for the upcoming fiscal year;
An estimate of the cost of providing the improvements and the activities for that fiscal year;
The recommended method and basis of levying the asse ssment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year;
The amount of any surplus or deficit revenues to be carried over from a previous fiscal year; and
The amount of any contributions to be made from sources other than the assessments levied.
The Annual Report serves as the basis for the levying of assessments each year.
The Advisory Board has approved and recommended the Annual Report for City Council consideration, which contains a proposed budget for use of the anticipated assessment revenues for the year. No changes are proposed (i) to the boundaries of the GGTID, (ii) in the GGTID improvements and activities authorized by Resolution No. 9009-10 and Ordinance No. 2782, or (iii) in the amount of the annual assessment or the method and basis for the levying the assessment. The Advisory Board is recommending that the annual assessments for Fiscal Year 2024 -25 continue to be two and one -half percent (2.5%) of the gross rent charged by the Operator per room occupancy per night for all transient occupancies for each visitor accommodation facility in Tier I, and (ii) one -half percent (0.5%) of the gross rent charged by the operator per room occupancy per night for all transient occupancies for each visitor accommodation facility in Tier II.
Item 138/2025
On February 22, 2011, the City Council approved an agreement with the Anaheim/Orange County Visitor & Convention Bureau ("VCB") (currently known as “Visit Anaheim”), pursuant to which, approximately 80% of the GGTID assessment revenue collected is allocated to the VCB to fund collective tourism marketing efforts or retained by the City for future Harbor Boulevard median improvements and a future transit system. The remaining (approximately 20%) of the GGTID assessment is allocated to fund specific improvements along Harbor Boulevard and other tourism promotion activities in Garden Grove in accordance with the budget included in the Annual Report. These funds are administered by the GGTPC pursuant to an agreement with the GGTPC approved by the City Council on September 27, 2011.
Levying of Assessment for Fiscal Year 2025-26
State Law requires that each year the City Council adopt a Resolution declaring its intention to levy an annual assessment for the upcoming fiscal year based on the Annual Report and scheduling a public hearing on the proposed assessment. The attached proposed Resolution contains the items required by State Law and sets a public hearing on the matter for May 13, 2025. After City Council adoption, the Resolution will be published in a local paper of general circulation at least ten (10) days before the public hearing pursuant to the Law.
At the Public Hearing scheduled for May 13, 2025, the City Council may order changes to the Annual Report recommended by the Advisory Board . Care must be taken to ensure that changes do not increase an assessment or expand the businesses or properties subject to assessment. During the public hearin g the City Council accepts oral and written protests.
Proceedings must be abandoned if written protests are received (and not withdrawn) from owners of businesses that will pay 50% or more of the assessments proposed to be levied.
At the conclusion of the Public Hearing, the City Council may adopt a Resolution confirming the Annual Report (with or without changes) and levying the assessment for the Fiscal Year 2025-26.
FINANCIAL IMPACT
It is estimated that the GGTID will generate approximately $2.8 million in revenue for Fiscal Year 2025-26. These funds will be dedicated to supporting local tourism promotion efforts.
The majority of the revenue will be administered by Visit Anaheim and the GGTPC. Any administrative costs incurred by the City in connection with the GGTID will be reimbursed from assessment revenues, up to a certain cap established.
RECOMMENDATION
It is recommended that the City Council:
Approve the Annual Plan; and
Adopt the Resolution declaring Intention to Levy Assessments for Fiscal Year 2025- 2026 and setting a time and date to conduct the public hearing on the proposed assessment.
Item 138/2025
ATTACHMENT(S)
1. GGTID Annual Report
2. Visit Anaheim Report
2. Resolution of Intent