CITY OF OAKLAND
TO: Jestin D. Johnson
City Administrator
SUBJECT: Oakland Tourism Business
Improvement District Modification
City Administrator Approval
RECOMMENDATION
AGENDA REPORT
FROM: Ashleigh Kanat
Director, Economic and
Workforce Development
Department
DATE: May 8, 2024
Date:
Staff Recommends That The City Council Conduct A Public Hearing And Adopt A Resolution 1) Declaring Results Of A Majority Protest Proceeding For The Proposed Modification Of The Oakland Tourism Business Improvement District 2018 (OTBID 2018); 2) Approving The Modification Of The Oakland Tourism Business Improvement District 2018 (OTBID 2018); 3) Adopting And Approving The Proposed Modified Oakland Tourism Business Improvement District 2018 Management Plan.
EXECUTIVE SUMMARY
Adoption of the proposed Resolution would enable the modification of the Oakland Tourism Business Improvement District 2018 (OTBID 2018) in the City of Oakland (City) to modify the term of the existing OTBID 2018 to end on July 31, 2024 rather than on July 31, 2025. This July 2, 2024 Public Hearing is pursuant to California Streets and Highways Code Section 36636, which requires one Public Hearing to be held to provide an opportunity for affected (those subject to the current OTBID 2018 assessment) business owners to protest and/or to provide public testimony regarding the proposed modification of the above special assessment district.
This proposed modification to the OTBID 2018 would end the current term a year early, in order to replace and update the OTBID 2018 with a renewed Oakland Tourism Business Improvement District (OTBID) to begin on August 1, 2024 with a new progressive assessment model and increased funding. Renewing the OTBID a year early will allow Visit Oakland , the Owners Association for the OTBID 2018, to build on the OTBID 2018 accomplishments , enhance their support of the tourism industry's post-pandemic recovery in Oakland, and enable improved marketing and sales services for assessed lodging businesses. The establishment of the renewed OTBID was approved at the June 4th City Council meeting with Council adopting both a Resolution and an Ordinance to establish the OTBID with a new assessment and term to begin August 1, 2024. The proposed modification of the OTBID 2018 will terminate the current City Council
July 2, 2024
Jestin Johnson (Jun 21, 2024 06:45 PDT)
Jun 21, 2024
Jestin D. Johnson, City Administrator
Subject: Oakland Tourism Business Improvement District Modification Date: May 8, 2024 Page 2
term on July 31, 2024, so that lodging businesses assessed under the current OTBID 2018 will not be subject to assessments for both OTBID 2018 and the renewed OTBID at the same time, but rather will end their existing OTBID 2018 assessments and services on July 31, 2024 in time to start their new assessment and services under the renewed OTBID on August 1, 2024.
The Property and Business Improvement District Law of 1994, Streets and Highways Code §36600 et seq., allows for City Council to consider the modification of a BID and District Plan at the request of the Owners' Association. The OTBID Owners' Association, Visit Oakland, has provided a written request to the City Council (Council) to modify the term (Exhibit A to the Resolution). If, at the close of the July 2, 2024 public hearing, no majority protest exists, then City Council may adopt the proposed Resolution to modify the district, resulting in the existing OTBID 2018 term and assessment ending on July 31, 2024.
The current OTBID term is seven (7) years, beginning April 1, 2018 and ending July 31, 2025.
The proposed modified term is six (6) years, beginning April 1, 2018 and ending on July 31, 2024.
The criteria for assessed lodging businesses under the OTBID 2018 and the renewed OTBID are identical, so that all lodging businesses that currently pay an assessment for the OTBID 2018 will be subject to the new assessment under the renewed OTBID.
A list of affected businesses and the proposed modified service plan can be found in Appendix 2 and Section IV, respectively, of the proposed Modified OTBID 2018 Management District Plan (Exhibit B to the Resolution).
BACKGROUND/ LEGISLATIVE HISTORY
Tourism Business Improvement Districts (TBIDs) are an evolution of the traditional Business Improvement District (BID). The first TBID was formed in West Hollywood, California, in 1989.
Since then, over 100 California destinations have followed suit, resulting in California's TBIDs collectively generating over $300 million per year for local destination marketing. In recent years, other U.S. cities and states have adopted-or are in process of adopting-their own TBID legislation based on the California model (e.g. Washington, Montana and Texas).
In California, Streets and Highways code section 36600 et seq. (Property and Business Improvement District Law of 1994) allows for TBIDs to be established undertaking a range of special benefit services, independent from government, to utilize the efficiencies of private sector operation in the market-based promotion of tourism districts and allow lodging business owners to organize their efforts to increase commerce. Lodging business owners within the OTBID pay an assessment and those funds are used to provide services that increase commerce.
In November 2008, a Resolution of Intention to form a citywide TBID was adopted by the City Council (Resolution No. 81641 C.M.S.); however, formation efforts were subsequently withdrawn due to the inclusion of Measure C on the local ballot. Measure C (which passed in July 2009 and became effective in January 2010) provided that one half of a three percent (3%) increment to the local Transient Occupancy Tax (TOT) could be used to fund Oakland Convention and Visitors Bureau (Visit Oakland) operations. In 2014, to leverage Measure C funds and keep pace with marketing initiatives in neighboring Bay Area jurisdictions, local hotel City Council
July 2, 2024