June 4, 2024
Public Hearing to consider
adoption of Resolution No.
2024-30 Modifying the
Management District Plan
for the Huntington Beach
Tourism Business
Improvement District
Public Hearing
Background
• HB Tourism Business Improvement District (HBTBID)
formed in 2014 pursuant to the CA Property and
Business Improvement District Law of 1994
• HBTBID purpose is to market HB to increase
overnight room sales
• Funding derived from assessments collected from
lodging businesses (paid by guests) operating within
City boundaries
• HBTBID was renewed in 2019 and runs through
June 30, 2028
• Management District Plan (MDP) identifies funds
and outlines programs
HBTBID
• Comprised of approx. 21 hotels/motels
and 200 Short Term Rentals (STRs)
• Current assessment rate is 4% of gross
short-term lodging revenue (separate
from 10% Transient Occupancy Tax (TOT)
collected by City)
• Boundary includes all lodging
businesses, existing and in the future,
within the City
• Total assessments approximately
$7 million for FY 23-24
Visit Huntington Beach (VHB)
• Visit Huntington Beach (VHB), a non-profit
501(c)6 organization, serves as the HBTBID
Owners’ Association
• Consists of 17 staff and 22 board members
• Responsible for implementing the MDP
programs and submitting an annual report
to City Council
• Management Agreement between City and
VHB outlines responsibilities of both
parties related to HBTBID funding and
programs
• City collects assessments and then
distributes funds to VHB
HBTBID Modification Request
• 2019 - City began retaining 100% of TOT revenues; Assessment rate increased 3% to 4% to mitigate TOT loss • HBTBID assessment is the only dedicated funding source to market Surf City USA • Competitive cities have dedicated more resources and are adding lodging properties/attractions making funding deficit gap greater each year
• VHB is seeking to modify the MDP to increase assessment rate from 4% to 6% to remain competitive and ensure that tourism promotion funding is adequate
VHB Comparative Set
Location Amount Raised Assessment Rate TOT Rate Total Guest Charge
Anaheim $17,500,000 2% room revenue 15% 17%
Mammoth Lakes $10,800,000 1% room revenue 13% 14%
Newport Beach $13,000,000 5% room revenue 10% 15%
Palm Springs $17,000,000 1% room revenue 14% 15%
San Diego $41,000,000 2% room revenue 10% 12%
San Luis Obispo $10,400,000 1% room revenue 10% 11%
Santa Barbara $10,700,000 2% room revenue 12% 14%
Huntington Beach $7,000,000 4% room revenue 10% 14%
OC Product Additions/Enhancements
NEWPORT BEACH
• Vea Newport Beach
• Pendry hotel
• RH Gallery & Rooftop Café
ANAHEIM
• JW Marriott Anaheim Resort
• The Westin Anaheim Resort
SOUTH COUNTY
• Waldorf Astoria
• Ritz Carlton
• Dana Point Harbor
OC VIBE
• Hotel (500 Rooms)
DISNEYLAND
• Disneyland Hotel
• Vacation Club Tower
• Pixar Pier Hotel
• Downtown Disney
Proposed Modified Budget
Budget Category Existing Proposed
Sales & Marketing 72% 65%
Tourism Enhancement Programs 10%
Administration 19% 19%
Contingency/Reserve 8% 5%
City Admin Fee 1% 1%
Total Budget (Approximately) $7M $10M
Sales & Marketing (65%) - encompasses
destination sales and marketing
programs strategically tailored to key
visitor markets, with focus on those
generating significant overnight
visitation and related spending. Efforts
extend to non-peak seasons and mid-
week periods, aiming to maximize year-
round tourism impact.
Tourism Enhancement Programs (10%) -
initiatives aim to enrich HB’s brand
offerings with a focus on improving
attractions and amenities to provide
compelling reasons for visitors to choose
and revisit HB.
Proposed Modified Budget
HBTBID Modification Schedule
Resolution
Of
Intention
April 16
(Adopted)
• In response to VHB’s written request, City Council adopted Resolution No. 2024- 13 which states the proposed modification and initiates MDP modification proceedings.
Notice
April/
May
(Completed)
• Notice and Resolution mailed to lodging owners on April 19, 2024 • Newspaper publishing in the HB Wave on May 23, 2024
Public
Meeting
May 7
(Completed)
• Public meeting to allow public testimony
• No Council action required
Public
Hearing
& Resolution of
Modification
June 4
• Public hearing, not more than 90 days after the adoption of the ROI, on the proposed MDP modifications
• City Council, following the public hearing, may decide to modify the HBTBID and adopt a Resolution of Modification
VHB TEPs
Wayfinding + Pier Sign*
Walkability & Connectivity*
Temporary Beach Restrooms
Nighttime Ambassador Program
Accessibility Improvements*
Bike Valet*
Beach Event Infrastructure*
Improved Surf Museum for LA28*
City TEPs
Downtown Parking Structure Upgrades*
Downtown Specific Plan Improvements*
Mobility Enhancements
PCH & 6th Pedestrian Path*
All-Inclusive Playground Maintenance*
Bluff Top Park Lighting*
Enhanced Downtown Maintenance
Restroom Upgrades*
• Management Agreement between City and VHB outlines responsibilities of both parties related to HBTBID funding and programs
• If the MDP is modified, then the Management Agreement would be amended to define specific Tourism Enhancement Programs that both the City and VHB would fund during the remainder of HBTBID term.
Management Agreement Amendment
* New Projects
VHB Tourism Enhancement Programs
Images are for visual examples only. All proposed TEPs funded by TBID assessments are approved annually by the VHB Board during the annual budget process and must adhere to state laws governing these assessment expenditures.
Public Hearing
• Any owner of a lodging business that is subject to the assessment may protest. • Every written protest shall be filed with the City Clerk at or before the public hearing.
• If written protests are received from lodging owners representing 50% or more of the estimated annual assessments levied, the HBTBID shall not be modified and no further proceedings to increase the assessment shall be taken for one year.
Recommendation
A)Conduct the Public Hearing; and,
B) If written protests of at least 50% or more of the total assessments are not received, adopt Resolution No. 2024-30, "A Resolution of the City Council of the City of Huntington Beach Approving the Modification of the Management District Plan of the HBTBID;" and,
C) Approve and Authorize the City Manager to execute the Second Amendment to the TBID Management Agreement between the City of Huntington Beach and Visit Huntington Beach.
Questions?