Agenda Item: 6
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL:
DATE: May 14, 2024
SUBJECT: AMENDMENT TO THE BENEFIT ZONE OF THE SANTA CLARITA
TOURISM MARKETING DISTRICT TO INCLUDE ADDITIONAL
HOTELS
DEPARTMENT: Economic Development
PRESENTER: Evan Thomason
RECOMMENDED ACTION
City Council:
1. Adopt a resolution to declare the City Council’s intention to amend the Tourism Marketing Benefit Zone of the Santa Clarita Tourism Marketing District to designate additional hotels as receiving benefits thereunder.
2. Set a public hearing for May 28, 2024, at a time and place to hear comments on this proposed action.
3. Authorize the City Manager or designee to execute all documents, subject to City Attorney approval.
BACKGROUND
In conformance with the Parking and Business Area Law of 1989, the City of Santa Clarita (City) City Council adopted Ordinance No. 10-4 (Ordinance), enacting Chapter 3.36 of the Santa Clarita Municipal Code, and established a Business Improvement Area (BIA) in the City designated as the Tourism Marketing District (TMD). This Ordinance permits the City to levy assessments on businesses within the BIA and restricts revenues so they may only be used for the benefit of the businesses within the defined area.
The TMD encompasses a Tourism Marketing Benefit Zone (Benefit Zone), where hotels located within the Benefit Zone are to pay an assessment of two percent of total room rents charged and received from transient hotel guests. Only those designated hotels included within the Benefit
Zone are assessed. Currently, the City has five hotels operating within the TMD that are a part of the Benefit Zone:
• Best Western Valencia Inn – 27413 Wayne Mills Place
• Courtyard by Marriott – 28523 Westinghouse Place
• Embassy Suites – 28508 Westinghouse Place
• Holiday Inn Express – 27513 Wayne Mills Place
• Hyatt Regency Valencia – 24500 Town Center Drive
In recent years, four new hotels have been constructed and commenced business within the City limits, and a fifth new hotel is anticipated to be open by summer 2024. As part of the Conditions of Approval and prior to occupancy, the project applicant agrees to be added to the City’s TMD Benefit Zone, which allows the hotel to be included in the tourism advertising efforts for Santa Clarita. By adopting the resolution, the boundary of the Benefit Zone would be amended by the addition of the following new hotels to be included as part of the TMD as receiving benefits:
• Homewood Suites Santa Clarita – 28700 Newhall Ranch Road • Hotel Lexen Newhall – 24219 Railroad Avenue
• Springhill Suites Valencia – 27413 Wayne Mills Place
• Residence Inn Valencia – 27413 Wayne Mills Place
• Hampton Inn Santa Clarita – 28700 Newhall Ranch Road
All revenue received from the method of assessment go into the TMD Fund, which is used for programs and activities that promote the City as a tourist destination and to generate economic activity. The Ordinance established an Advisory Board, appointed by the City Council, which provides recommendations as to the best use of TMD funds. The TMD Advisory Board includes a representative from each of the participating hotels, along with two City representatives selected by the City Manager.
The Ordinance that guides the use of funds, with recommendations from the TMD Advisory Board, is to be used for the following purposes:
1. Promoting the identity of Santa Clarita through financial support of key regional and national events that support tourism and result in an economic impact; and
2. Developing and implementing a destination marketing strategy and promotions designed to increase visitor attraction to Santa Clarita, including overnight visits; and
3. Developing and undertaking an advertising and public relations program focusing on the business and leisure travel trade; and
4. Annual operation expenses including, but not limited to, annual district administration functions and expenses, consultants, printing, postage, and meetings.
Upon approval of the recommended actions, the proposed changes will be brought back to the City Council for a public hearing, introducing an ordinance on May 28, 2024, followed by a second reading of the ordinance on June 11, 2024.
ALTERNATIVE ACTION
Other direction as determined by the City Council.
FISCAL IMPACT
All funds received from the two percent method of assessment go into revenue account 360- 402406 (Tourism Marketing District - Assessment) and are only to be used for the purposes of programs and activities that promote the City of Santa Clarita as a tourist destination. There is no fiscal impact to the General Fund associated with this item.
ATTACHMENTS
Resolution