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C IV ITAS

Morro Bay TID Presentation

October 21, 2014

Overview

TID Overview

Beyond Lodging

National TID Survey Results

TID Overview

A rose by any other name..

TBID

TID

TMD

LBID

HBID

TPA

BIA

HBIA

LBIA

TPD

Characteristics of TIDs

• Assessment on room night sales • % of revenue or $ per night

Mechanism

• Cannot be diverted• Varying terms – 1-40 years

Stability

• New or existing nonprofit• DMO or hotel organization • Local Government oversight

Governance

The TID Revolution

Started in West Hollywood, 1992

Slow initial growth

Rapid expansion in last decade

Districts Now• 85 California• 17 Montana• 11 Washington• 5 South Dakota• 1 Oregon• 1 Texas• 1 New Jersey • 1 Kansas

Next Up• Pennsylvania• Oklahoma• Wisconsin• Florida• Tennessee

Morro Bay TBID

• Formed pursuant to the 1989 Act.

• Assessment is 3% of gross revenue

• Raises approximately $500,000per year

Morro Bay TBID

Pursuant to the Morro Bay Ordinance, the TBID is authorized to use funds for:• The general promotion of tourism within the district• The marketing of conference, group, and film

business• The marketing of the district to the travel industryEach of these authorized uses must directly benefit the assessed hotels

California has two TID laws

• No petition• 1 year term• Annual renewal• Business only• Appointed advisory board• City can disestablish• Morro Bay TBID formed

under 89 law

• 50% + 1 petition• 5 or 10 year term• Annual report• Business or property• Non-profit management• Payors can disestablish• SLO County TMD formed

under 94 law

1994 Law1989 Law

Governing Documents

– Formed pursuant to the 1989 law

– Governed by Morro Bay Ordinance No. 546 and the annual report

– Ordinance allows for:• General promotion of

tourism• Marketing of

conference, group and film businesses

• Marketing the district to the travel industry

– Formed pursuant to the 1994 law

– Governed by the management district plan and the annual report

– Management district plan allows for:• Advertising and

promotions programs, sales programs and marketing programs

SLO County TMDMorro Bay TBID

Proposition 26

Voters approved in November 2010-Article XIIIC of CA Constitution

All levies are a tax and require a 2/3 vote of the electorate, unless:

Seven exceptions:

• A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged

• A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged

AB 483 (Ting)

• Introduced 8/13/13• Approved by legislature –

2/3 vote• Signed by Governor

10/4/13• Urgency legislation –

effective immediately • Adds two definitions:– Specific Benefit– Specific Government Service

Outreach

Document Preparation

Owner Approval

City Approval

Four steps to TID formation:

Formation Process

• Initiated by City Council• City Council adopts Resolution of Intention• City Council holds public hearing• City Council adopts Ordinance • Assessment collection begins

1989 Law

Formation Process

• Develop management district plan• Submit 50% + 1 petition to City• City Council adopts Resolution of Intention • City Council holds public meeting and public

hearing• City Council adopts Resolution of Formation• Assessment collection begins

1994 Law

Assessed Businesses

The types of businesses that are typically assessed in a TID include:• Hotels/Motels/Inns• Bed & Breakfast• Vacation Rentals• RV Parks• Campgrounds

Beyond Lodging

If lodging businesses can do it, why not others?

Restaurants Retail Attraction

s Wineries Auto

• Established in 1996• Annual budget: $315,000• Assessment rate based on number of

employees • Services include advertising campaigns, direct

mailers, online reservation system, dining guide productions, sponsorship of restaurant week

• Website an important part of promotions – www.newportbeachdining.com

• Five year contract with the city for funding

Newport Beach Restaurant District

Newport Organizational Chart

Visit Newport Beach

501 (c)(6)6-member board

TBID management/Brown Act

Newport Beach Foundation

501(c)(3)Fundraising Arm(Potential Future

Organization)

Newport Beach & Co.

501(c)(6)TOT Funds

24-member boardNo Brown Act

Dine Newport Beach

RBID Management

Marketing

Film Newport Beach

Attract film companies

Revenue from permits

Celebrate Newport Beach

Execute eventsDevelop new

events

Enterprise Newport Beach

B-2-B & BID marketing

Mammoth Lakes TID

Included Business Types

• Attractions• Restaurants• Retail• Transportation• Other tourism related

Challenge is linkage between programs and assessees as defined businesses

Restaurant/Retail Districts have been created

National TID Survey Results

What was the primary reason your destination formed a tourism

district?

What was the biggest challenge in forming you district?

What is the assessment rate in your tourism district?

On average destinations increased their tourism

funding by 192% after the formation of a tourism

district.

Snapshot

• “45% increase in hotel stays between 2010 and 2013.”

• “Overall results of initial 5 year district (during Recession) was approximately 20:1”

• “We have shown over 100% increase in weekend stays.”

• “More than 50% increase to TOT revenues in the past 4 years.”

Snapshot

• “Articles in the New York Times and Smithsonian Magazine which tracked over 20,000 unique visitors daily to our website.”

• “More than 800% ROI on TID funds to gross revenue generated by increased room night sales. Group bookings went from 10K a year to nearly 60K.”

• “Increased generated room nights by 550% since 2008.”

Questions and Comments

John Lambeth, PresidentCivitas

www.civitasadvisors.com(800)999-7781