CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
6/26/2023
1 SUBJECT:
Resolution Granting Consent to the City of Burlingame to Form the San Francisco Peninsula Tourism Marketing District (SFPTMD) and Include the City of Pacifica in the SFPTMD RECOMMENDED ACTION:
Adopt the attached resolution granting consent to the City of Burlingame to form the San Francisco Peninsula Tourism Marketing District (SFPTMD) and include the City of Pacifica in the SFPTMD.
STAFF CONTACT:
Yulia Carter, Assistant City Manager
(650) 738-7402
[email protected]
BACKGROUND/DISCUSSION:
The Council held several recent discussions related to the local Pacifica Hotels Business Improvement District. This report is separate from those discussions and affects the regional countywide SMCTBID that Pacifica hotels are also part of in addition to the local H-BID.
In 2001, the San Mateo County Tourism Business Improvement District (SMCTBID) was formed pursuant to the Parking and Business Improvement Area Law of 1989 (also known as the “89 Law”). San Francisco Peninsula and San Mateo County lodging businesses seek to modernize the SMCTBID by forming a new District, the San Francisco Peninsula Tourism Marketing District (SFPTMD), pursuant to the Property and Business Improvement District Law of 1994 (also known as the “94 Law”).
The SFPTMD is a benefit assessment district proposed to create a revenue source to help fund marketing and sales promotion efforts for San Francisco Peninsula area lodging businesses.
This approach has been used successfully in other destination areas throughout the state to improve tourism and drive additional room nights to assessed lodging businesses. The proposed SFPTMD includes all lodging businesses located within the boundaries of the cities of Belmont, Brisbane, Burlingame, East Palo Alto, Foster City, Half Moon Bay, Menlo Park, Millbrae, Pacifica, Redwood City, San Bruno, San Carlos, San Mateo, South San Francisco, and the unincorporated area of San Mateo County (the “Participating Jurisdictions”).
The San Mateo County/Silicon Valley Convention and Visitors Bureau dba The San Francisco Peninsula (SFP) and lodging business owners decided to pursue formation of the SFPTMD in order to create a revenue source devoted to marketing the San Francisco Peninsula area as a tourist, meeting and event destination. If established, the SFPTMD would generate an estimated $10.9 million annually for promotion of travel and tourism specific to the San Francisco Peninsula area.
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June 26, 2023
Tourism Marketing Districts
Tourism Marketing Districts (TMDs) utilize the efficiencies of private sector operation in the market-based promotion of tourism. These special assessment districts allow lodging business owners to organize their efforts to increase tourism. Lodging business owners within the TMD fund the TMD, and those funds are used to provide services that are desired by and benefit the lodging businesses within the TMD.
TMD benefits include:
➢ Funds cannot be diverted for other government programs; ➢ They are customized to fit the needs of each destination; ➢ They allow for a wide range of services; including destination marketing, tourism promotion, and sales lead generation;
➢ They are designed, created and governed by those who will pay the assessment; and ➢ They provide a stable funding source for tourism promotion.
In California, TMDs are primarily formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of special benefit assessment districts to raise funds within a specific geographic area. The key difference between TMDs and other special benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the TMD.
MANAGEMENT DISTRICT PLAN
The Management District Plan (Attachment A) includes the proposed boundary of the SFPTMD, a service plan and budget and a proposed means of governance. The SFPTMD will include all lodging businesses located within the boundaries of the cities of the Participating Jurisdictions.
The annual assessment rate is one-and one-half percent (1.5%) of gross short-term sleeping room rental revenue for lodging businesses with 5,000 square feet or more of dedicated meeting space, and 0.75% for all other lodging businesses within the SFPTMD’s boundaries.
Based on the benefit received, assessments will not be collected on stays of more than thirty (30) consecutive days; stays provided to airline cockpit and/or cabin crews pursuant to an agreement between a hotel and an airline, which is in furtherance of or to facilitate such crews’ performance of their jobs for the airline, including layovers between flights; employees of the state or federal government if room charges are paid directly by their employing agency and copies of official travel orders are submitted as applicable; and, any properly credentialed officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.
The proposed SFPTMD will have a five (5) year term, beginning October 1, 2023, or as soon as possible thereafter, and ending five (5) years from its start date. The assessment will be implemented beginning October 1, 2023, or as soon as possible thereafter. Once per year beginning on the anniversary of SFPTMD formation there is a thirty (30) day period in which business owners paying fifty percent (50%) or more of the assessment may protest and begin proceedings to terminate the SFPTMD.
The City of Burlingame has requested the City of Pacifica’s consent to create the SFPTMD and to include City of Pacifica lodging businesses in the SFPTMD (Attachment B). As structured, the City of Burlingame shall be responsible for collecting the assessments on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the SFPTMD. The City of Burlingame shall take all reasonable efforts to collect the assessments from each lodging business. The City of Burlingame shall be paid a fee equal Pacifica City Council 3
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to one percent (1%) of the amount of assessment collected or a flat fee of $60,000, whichever is greater each year to cover its costs of collection and administration.
The recommended action, adoption of the attached resolution granting consent to the City of Burlingame to form the SFPTMD and include the City of Pacifica in the SFPTMD, will enable the City of Burlingame and SFP to move forward with the SFPTMD formation process. Upon successful formation, the SFPTMD will be governed by SFP and by the Management District Plan and will be facilitated by the Burlingame City Council.
ALTERNATIVE ACTION:
Council may choose to not adopt the resolution.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
The adoption of this resolution granting consent to the City of Burlingame to form the San Francisco Peninsula Tourism Marketing District (SFPTMD) and including the City of Pacifica SFPTMD is associated with the goals and strategies of the City Council’s Strategic Plan including Goal 1 - Enhance organizational and fiscal stability.
FISCAL IMPACT:
No direct fiscal impact. However, the SFPTMD programs are intended to increase room night sales for assessed lodging businesses within the SFPTMD, which could in the future increase transient occupancy tax (TOT) and sales tax collections from visitors to Pacifica.
ORIGINATED BY:
City Manager's Office
ATTACHMENT LIST:
Attachment A - City of Burlingame Resolution No. 049-2023 expressing intent ot form SFPTMD and demonstrating the proposed boundary. (PDF)
Attachment B - City of Burlingame Resolution No. 050-2023 requesting consent to form the SFPTMD and include the City of Pacifica. (PDF)
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June 26, 2023
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA GRANTING
CONSENT TO THE CITY OF BURLINGAME TO FORM THE SAN FRANCISCO PENINSULA
TOURISM MARKETING DISTRICT (SFPTMD) AND TO INCLUDE THE CITY OF PACIFICA IN THE SFPTMD.
______________________________________________________________________ WHEREAS, in 2001, the San Mateo County Tourism Business Improvement District (SMCTBID) was formed pursuant to the Parking and Business Improvement Area Law of 1989 by City of Burlingame Ordinance No. 1648; and
WHEREAS, the City of Pacifica granted consent to the City of Burlingame to be included within the boundaries of the SMCTBID by Pacifica City Council Resolution No. 27-2010; and WHEREAS, the City of Burlingame, San Mateo County/Silicon Valley Convention and Visitors Bureau dba The San Francisco Peninsula (“SFP”), and San Mateo County lodging businesses, seek to modernize the SMCTBID by forming a new District, the San Francisco Peninsula Tourism Marketing District (SFPTMD), pursuant to the Property and Business Improvement District Law of 1994; and
WHEREAS, the Property and Business Improvement Law of 1994, Streets and Highways Code § 36600 et seq., authorizes the City of Burlingame to establish business improvement districts for the purposes of driving increased business sales directly to payors; and
WHEREAS, the City Council of the City of Burlingame has requested consent to form the SFPTMD in the City of Pacifica with adoption of Burlingame City Council Resolution No. 050-2023, dated May 15, 2023.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Pacifica, that:
Section 1: The above recitals are true and correct.
Section 2: The City of Burlingame is hereby granted consent to include the City of Pacifica in the SFPTMD, for the formation of the SFPTMD and future renewals.
Section 3: The Clerk of the City of Pacifica is hereby directed to transmit a certified copy of this Resolution to the Clerk of the City of Burlingame.
Section 4: This Resolution is effective upon its adoption. • • • • •
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June 26, 2023
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 26th day of June 2023, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
______________________________
Tygarjas Twyrls Bigstyck, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney