CITY COUNCIL STAFF REPORT
Meeting Date: January 24, 2022
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: PUBLIC HEARING AND ADOPT RESOLUTION NO. ___-22
DECLARING RESULTS OF MAJORITY PROTEST PROCEEDINGS
AND RENEWING THE PLEASANT HILL TOURISM IMPROVEMENT
DISTRICT
SYNOPSIS
Holding the final hearing, declaring results of the majority protest proceedings, and adopting the proposed resolution will result in the renewal of the Pleasant Hill Tourism Improvement District (PHTID) and the levy of assessments on lodging businesses, and approval of the 2022-2027 PHTID Management District Plan dated January 24, 2022.
DISCUSSION
Background
The Pleasant Hill Tourism Improvement District (PHTID) is a benefit assessment district that generates revenue to help fund sales, marketing, and communication programs for Pleasant Hill hotels. TIDs are used in destination areas throughout California to increase tourism, hotel reservations, and bring additional overnight visitors into an area to shop and eat at local businesses. The proposed five-year PHTID extension includes all lodging businesses – the existing seven plus any others that would open during the term of the PHTID – that are available for public occupancy and located within the boundaries of the City.
Timeline
April 1, 2017 PHTID formed with a five-year term (expires March 31, 2022).
November 2021 Petition to Renew the PHTID beyond March 31, 2022 signed by majority of City hotel owners.
December 6, 2021 Resolution of Intent to Renew the PHTID adopted by City Council with amended five-year extension term.
December 9, 2021 Written notices mailed to all hotels in the City that would be subject to the assessment (a copy of this Notice is attached), as required by Streets and Highways Code § 36623 in order to form or extend a TID.
December 20, 2021 City Council allowed public testimony on proposed PHTID renewal and reached consensus on formation of the Stay Pleasant Hill nonprofit corporation and City/Stay Pleasant Hill owners’ association agreement. Council also received a report from the PHTID on recent activities and accomplishments (see attached 2021 PHTID Annual Report).
January 24, 2022 Public hearing and approval of the attached Resolution to Renew the PHTID for five additional years, generating approximately $710,000 annually for promotion of travel and tourism specific to Pleasant Hill. Renewing the PHTID must be done pursuant to the Property and Business Improvement District Law of 1994 (94 Law).
PHTID Management District Plan
The Management District Plan (attached) includes the proposed boundary of the PHTID as well as a description and breakdown of how the PHTID revenue would be spent (beginning on Page 7). Proposed sales, marketing, promotions, and partnership activities that would be undertaken by the PHTID are also outlined in the Plan (beginning on Page 8). The Plan also provides the parameters of the governance structure of Stay Pleasant Hill, the nonprofit corporation that will be the owners’ association and manage the PHTID beginning on April 1, 2022 (see Page 14).
Owners’ Association Agreement between the City and Stay Pleasant Hill Streets and Highways Code section 36651 requires a contract between the City and the owners’ association that would manage the PHTID services that are described in the Management District Plan. The attached draft owners’ association agreement (“Agreement”) between the City and Stay Pleasant Hill outlines the terms in which Stay Pleasant Hill will provide the services for the PHTID. For example, Stay Pleasant Hill will prepare an annual report each year which includes:
Improvements and activities to be provided for that fiscal year. An estimate of the cost of providing the improvements and the activities for that fiscal year.
The method and basis of levying assessments.
The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
The draft Agreement also enables the City to audit assessments, collections, and uses, and allows for termination of the agreement in the event that either party defaults in its obligations under the agreement.
FISCAL IMPACT
The City will receive a fee of 2% of the amount collected to cover its costs of administration. Because the PHTID programs are intended to increase visitation to the City, an increase in transient occupancy tax (TOT) and sales tax collection is expected.
PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center, and at the Pleasant Hill Police Department.
The agenda and staff report are posted on the City’s web page.
RECOMMENDED CITY COUNCIL ACTION
Hold a final hearing, declaring results of majority protest proceeding, and adopt the proposed resolution.
ALTERNATIVES TO RECOMMENDED ACTION
The Council could choose not to adopt the attached Resolution and to not renew the Pleasant Hill TID. Staff does not recommend this option.
ATTACHMENT(S):
Resolution to Renew the PHTID and approve the PHTID Management District Plan 2022-2027 PHTID Management District Plan
Draft Owners’ Association Agreement – redline version reflecting Council direction Renewal Notice to Lodging Businesses Within Proposed PHTID 2021 PHTID Annual Report
Prepared by: Zach Seal, Economic Development Manager
Approved by: June Catalano, City Manager