CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
4/22/2024
1 SUBJECT:
Resolution of Intention to Establish the Pacifica Tourism Marketing District RECOMMENDED ACTION:
Adopt the Resolution of Intention to establish the Pacifica Tourism Marketing District (PTMD).
Adoption of this Resolution will result in a public meeting on June 10, 2024, and a public hearing on June 24, 2024, on the formation of the Pacifica Tourism Marketing District (PTMD) and the levy of assessments on hotels and short-term vacation rentals.
BACKGROUND
The PTMD is a benefit assessment district proposed to create a revenue source to help fund marketing and sales promotion efforts for Pacifica hotels and short-term vacation rentals. This approach has been used successfully in other destination areas throughout the state to improve tourism and drive additional room nights to assessed hotels and lodging businesses. The proposed PTMD includes all hotels and all short-term vacation rental businesses (hereinafter referred to collectively as “lodging businesses”), existing and in the future, available for public occupancy located within the boundaries of the City of Pacifica.
Lodging business owners decided to pursue the formation of the PTMD to create a revenue source devoted to marketing Pacifica as a tourist, meeting, and event destination. If established, the PTMD would generate approximately $286,000 on an annual basis for promoting travel and tourism specific to Pacifica.
TOURISM MARKETING DISTRICTS
Tourism Marketing Districts (TMDs) utilize the efficiencies of private sector operations 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:
➢ 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 (94 Law). 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 nonprofit corporation governing the TMD.
Pacifica City Council 2
April 22, 2024
MANAGEMENT DISTRICT PLAN
The Management District Plan (Plan) includes the proposed boundary of the PTMD, a service plan and budget, and a proposed means of governance. The PTMD will include all lodging businesses, existing and in the future, available for public occupancy, located within the boundaries of the City of Pacifica.
The annual assessment rate is one percent (1%) of gross short-term sleeping room rental revenue. Annually, the Owner’s Association may increase or decrease the assessment rate by a maximum of one-quarter of one percent (0.25%) of gross short-term sleeping room rental revenue. Based on the benefit received, assessments will not be collected on stays of more than thirty (30) consecutive days; any officer or employee of a foreign government, which officer or employee is exempt by reason of an express provision of Federal law or international treaty.
The proposed PTMD will have a five (5) year term, beginning July 1, 2024, or as soon as possible thereafter, and ending five (5) years from its start date. The assessment will be implemented beginning July 1, 2024, or as soon as possible thereafter. Once per year, beginning on the anniversary of PTMD 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 PTMD.
The City of Pacifica may enter into a contract with a non-profit organization to serve as the Owners’ Association for the PTMD. The Owners’ Association is charged with managing funds and implementing programs in accordance with the Plan and must provide annual reports to the City Council.
The City will collect the assessment monthly from each assessed lodging business located within the PTMD's boundaries. If the City contracts with an Owner’s Association, the City shall forward the assessments collected to the Owners’ Association, less any estimated costs associated with administering the assessment. If actual costs exceed the estimated amount withheld, then the PTMD shall reimburse the City of Pacifica.
PTMD FORMATION PROCESS
April 22, 2024 RESOLUTION OF INTENTION HEARING
Upon the submission of a written petition, signed by the business owners in the proposed district who will pay more than fifty percent (50%) of the assessments proposed to be levied, the City Council (Council) may initiate proceedings to establish a district by the adoption of a resolution expressing its intention to establish a district.
Petition Status: Petitions in favor of PTMD formation were submitted by the majority of lodging businesses, which represents over 50% of the total PTMD assessment. This majority petition allows the Council to initiate proceedings for PTMD formation at the April 22, 2024 meeting.
No later than
May 10, 2024 NOTICE
The 94 Law requires the City to mail written notice to the owners of all businesses proposed to be within the PTMD. Mailing the notice begins a mandatory forty-five (45) day period in which owners may protest PTMD formation.
Pacifica City Council 3
April 22, 2024
June 10, 2024 PUBLIC MEETING AND INTRODUCTION/FIRST READING OF
ORDINANCE
Allow public testimony on the formation of the PTMD and levy of assessments. No Council action required.
At the public meeting, the Council shall introduce and conduct the first reading of the ordinance forming the PTMD and levying the assessment.
June 24, 2024 FINAL PUBLIC HEARING AND SECOND READING/ADOPTION OF
THE ORDINANCE
If written protests are received from the owners of businesses in the proposed PTMD, which will pay fifty percent (50%) or more of the assessments proposed to be levied, and protests are not withdrawn so as to reduce the protests to less than fifty percent (50%), no further proceedings to levy the proposed assessment against such businesses shall be taken for a period of one (1) year from the date of the finding of a majority protest by the Council.
If the Council, following the public hearing, decides to establish the proposed PTMD, the Council shall adopt a resolution of formation.
Following a successful public hearing and first reading of the ordinance, the Council shall convene to hold a second reading of the ordinance, forming the PTMD and levying the assessment. Upon successful passage of the ordinance, the PTMD shall be formed, and the ordinance shall go into effect thirty (30) days after successful passage of the ordinance.
ALTERNATIVES
The Council could choose not to adopt the Resolution of Intention. Staff does not recommend this option as it would prevent securing ongoing revenues for marketing programs and activities to promote Pacifica as a destination to benefit Pacifica’s hospitality industry.
FISCAL IMPACT
There is no immediate fiscal impact related to this action. The City of Pacifica will receive the estimated costs associated with administering the assessment. Because the PTMD programs are intended to increase visitation to the City, of Pacifica there may be future increase in transient occupancy tax and sales tax collections.
ORIGINATED BY:
City Manager's Office
ATTACHMENT LIST:
Pacifica City Council 4
April 22, 2024
RESOLUTION NO. __________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA DECLARING ITS
INTENTION TO ESTABLISH THE PACIFICA TOURISM MARKETING DISTRICT (PTMD)
AND IDENTIFY THE TIME AND PLACE OF A PUBLIC MEETING AND A PUBLIC HEARING
THEREON AND GIVING NOTICE THEREOF
WHEREAS, the Property and Business Improvement Law of 1994, Streets and Highways Code § 36600 et seq., authorizes the City of Pacifica (City) to establish business improvement districts for the purposes of promoting tourism; and WHEREAS, Pacifica lodging business owners and representatives from the City have met to consider the formation of the PTMD; and
WHEREAS, a Management District Plan (Plan) has been drafted which sets forth the proposed boundary of the PTMD, a service plan and budget, and a proposed means of governance; and
WHEREAS, the proposed PTMD includes all hotels and all short-term vacation rental businesses (hereinafter referred to collectively as “lodging businesses”), existing and in the future, available for public occupancy located within the boundaries of the City of Pacifica; and WHEREAS, lodging businesses who will pay more than fifty percent (50%) of the assessment under the PTMD have petitioned the City Council to establish the PTMD.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL THAT:
1. The recitals set forth herein are true and correct.
2. The City Council finds that lodging businesses that will pay more than fifty percent (50%) of the assessment proposed in the Plan have signed and submitted petitions in support of the formation of the PTMD. The City Council accepts the petitions and adopts this Resolution of Intention to establish the PTMD and to levy an assessment on all lodging businesses, existing and in the future, within the PTMD boundaries in accordance with the Property and Business Improvement District Law of 1994.
3. The City Council finds that the Plan satisfies all requirements of Streets and Highways Code § 36622.
4. The City Council declares its intention to establish the PTMD and to levy and collect assessments on lodging businesses within the PTMD boundaries pursuant to the Property and Business Improvement District Law of 1994.
5. The PTMD shall include all lodging businesses, existing and in the future, located within the boundaries of the City of Pacifica, as shown in the map attached as Exhibit A.
6. The name of the district shall be Pacifica Tourism Marketing District (PTMD).
Pacifica City Council 5
April 22, 2024
7. The annual assessment rate is one percent (1%) of gross short-term sleeping room rental revenue. Annually, the Owner’s Association may increase or decrease the assessment rate by a maximum of one-quarter of one percent (0.25%) of gross shortterm sleeping room rental revenue. Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days; any officer or employee of a foreign government, which officer or employee is exempt by reason of express provision of Federal law or international treaty.
8. The assessments levied for the PTMD shall be applied toward marketing and sales promotions and destination development programs to market assessed lodging businesses in Pacifica as tourist, meeting, and event destinations, as described in the Plan. Funds remaining at the end of any year may be used in subsequent years in which PTMD assessments are levied as long as they are used consistent with the requirements of this resolution, the Ordinance and the Plan.
9. The proposed PTMD will have a five (5) year term, beginning July 1, 2024 or as soon as possible thereafter, and ending five (5) years from its start date unless renewed pursuant to Streets and Highways Code § 36660.
10. Bonds shall not be issued.
11. The time and place for the public meeting to hear testimony on establishing the PTMD and levying assessments are set for June 10, 2024, at 7:00 PM, or as soon thereafter as the matter may be heard, at the Council Chambers located at 2212 Beach Blvd., Pacifica, CA 94044. Following the public meeting, the City Council shall move to introduce and conduct the first reading of the Ordinance to establish the PTMD and initiate the levy of assessments.
12. The time and place for the public hearing to establish the PTMD and the levy of assessments are set for June 24, 2024, at 7:00 PM, or as soon thereafter as the matter may be heard, at the Council Chambers located at 2212 Beach Blvd., Pacifica, CA 94044. The City Clerk is directed to provide written notice to the lodging businesses subject to assessment of the date and time of the meeting and hearing, and to provide that notice as required by Streets and Highways Code § 36623, no later than May 10, 2024.
13. At the public meeting and hearing, the testimony of all interested persons for or against the establishment of the PTMD may be received. If at the conclusion of the public hearing, there are of record written protests by the owners of the lodging businesses within the proposed PTMD that will pay fifty percent (50%) or more of the estimated total assessment of the entire PTMD, no further proceedings to establish the PTMD shall occur for a period of one (1) year.
14. Following a successful public hearing, at the same City Council meeting on May 10, 2024, held at Council Chambers located at 2212 Beach Blvd., Pacifica, CA 94044, the City Council may conduct a second reading of the Ordinance to establish the PTMD and to initiate the levy of assessments. At the conclusion of the second reading of the Ordinance, the City Council may adopt the Ordinance, establishing the PTMD and levying the assessments.
15. The complete Plan is on file with the City Clerk and may be reviewed upon request.
16. This resolution shall take effect immediately upon its adoption by the City Council.
Pacifica City Council 6
April 22, 2024
• • • • •
I HEREBY CERTIFY that the foregoing Resolution of Intention was introduced and adopted at a special and regular meeting of the City Council on the 22nd day of April 2024 by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
_________________________________
Sue Vaterlaus, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ _________________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney