COUNCIL AGENDA REPORT

City of Anaheim

OFFICE OF THE CITY MANAGER

DATE: JULY 27, 2010

FROM: OFFICE OF THE CITY MANAGER

SUBJECT: INTENTION TO ESTABLISH THE ANAHEIM TOURISM IMPROVEMENT DISTRICT

ATTACHMENT (Y/N): YES ITEM # 28

200 S. Anaheim Blvd.
Suite #733
Anaheim, CA 92805
Tel: (714) 765-5165
Fax: (714) 765-5164
www.anaheim.net

INTENTION TO ESTABLISH THE ANAHEIM TOURISM IMPROVEMENT DISTRICT IMPROVEMENT DISTRICT

July 27, 2010

Page 2 of 2

RECOMMENDATION:

That the City Council, by resolution, declare its intention to form a Tourism Improvement District in Anaheim for the promotion of local tourism and convention-related programs as well as transportation improvements within the Anaheim Resort and Platinum Triangle.

DISCUSSION:

Since 2008, representatives from the Anaheim/Orange County Visitors and Convention Bureau (VCB) together with City staff and members of the local hotel industry have explored the merits of implementing a Tourism Improvement District (TID) in Anaheim. In the face of increased marketing activities from competitive venues and destinations, the consensus is that the City and its partners must undertake a more comprehensive and sustainable approach to marketing and promoting the City of Anaheim as a tourist and convention destination. Currently the VCB, which operates the tourism and convention marketing efforts for the City, does not have adequate, reliable resources to grow or even maintain current market share of the convention and leisure business.

The formation of a TID in Anaheim will allow our tourism industry to expand funding for marketing activities through a cooperative partnership funded by the hospitality industry. This new source of revenue will also allow Anaheim to adequately retain and expand our current share of the convention market, as well as provide immediate opportunities for our hotels to attract new business.

Pursuant to the enabling ordinance introduced by the City Council outlining the procedures for the establishment of Tourism Improvement Districts in Anaheim, staff is now proposing Council move forward with the attached resolution that would declare the City’s intention to establish the “Anaheim Tourism Improvement District” (ATID).

The attached resolution of intention provides that a new assessment equal to 2% of the hotel room rent be levied on hotels located within the ATID boundaries. The proposed boundaries of the ATID consist of the Anaheim Resort area as well as the Platinum Triangle. The resolution also provides that the ATID be established for a period of thirty years.

Of the revenues collected from the ATID, the resolution provides that seventy-five percent (75%) of the funds shall be dedicated to marketing, promotion and related activities that seek to bolster the City’s tourism and convention industry. The remaining twenty-five percent (25%) of the ATID assessments, collected annually, will be dedicated to transit projects including the operation and maintenance of the Anaheim Rapid Connection (ARC) project. Until the ARC is operational, the transportation component funds may be used for other transportation improvement projects within the district boundaries.

The specific uses of the transportation funds will be governed by a three member transportation committee or board, while the funds allotted for marketing will be managed by an entity under contract with the City that will be responsible for the day to day management of the marketing activities. A board made up of representatives from assessed facilities will provide oversight to those marketing activities. Both boards will be responsible for filing an annual report with the City.

The resolution also requires a management plan be created and distributed to the assessed facilities prior to the formation of the ATID. The management plan will describe, in more specific terms, the approved uses of the funds for both marketing and transportation. The plan will also provide more detail on the composition and selection process for the respective boards.

If approved, the next step in the ATID formation process will be a public hearing that will occur on August 31, 2010, allowing for public testimony and questions regarding the proposed assessment. Following the opportunity for public testimony, a Resolution of Formation will be brought to Council in September that will again provide interested parties with an opportunity to provide feedback on the establishment of the ATID.

IMPACT ON BUDGET:

There is no impact on the General Fund.

Respectfully submitted,

Greg Garcia

Deputy City Manager/Administration

Attachment:

1.  ATID Resolution of Intention

2.  TID Enabling Ordinance