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HomeMy WebLinkAboutAgenda Report - December 7, 2022 C-18CITY OF z1 t CALIFORNIA AGENDA ITEM C _ 18 COUNCIL COMMUNICATION AGENDA TITLE: Approve Lodi Tourism Business Improvement District (LTBID) 2021 Annual Report MEETING DATE: December 7, 2022 PREPARED BY: Deputy City Manager RECOMMENDED ACTION Approve Lodi Tourism Business Improvement District (LTBID) 2021 Annual Report. BACKGROUND INFORMATION: On September 2, 2015, the City Council adopted Resolution 2015-159 establishing the Lodi Tourism Business Improvement District (LTBID) for a five-year term, beginning October 2, 2015. On August 5, 2020, the City Council adopted Resolution 2020-172 renewing the term through September 30, 2025. Pursuant to Lodi Municipal Code Chapter 12.07 and Streets and Highways Code Section 36600 et seq., also known as the "Property and Business Improvement District Law of 11994", the Owners Association, identified in the resolution as the Lodi Conference and Visitors Bureau (Visit Lodi!), is required to present an annual report (Exhibit A) to the Council for each year in which assessments are to be levied and collected to pay the costs of the improvements and activities described within the report. Assessments total 4.5 percent of hotel rates in the City and 3 percent of hotels in Flag City. For fiscal year 2022, Visit Lodi! Is not proposing any changes to the method and basis for levying the assessment or to the boundaries or assessed businesses within the LTBID. FISCAL IMPACT: Funding for Visit Lodi! Generates additional funding for local merchants and the City as tourism dollars are spent locally. FUNDING AVAILABLE: Not applicable. The LTBID is funded by assessed lodging businesses. Andrew Keys, Deputy City Manager Mh APPROVED: m: _;: Q, INav za, 202 09;55 PS71 Stephen Schwabauer, City Manager L(ODI CALIFORNIA November 15, 2022 Steve Schwabauer, City Manager City of Lodi 221 W. Pine St. Lodi, CA 95240 Dear Mr. Schwabauer, Enclosed, please find the Annual Report for the Lodi Tourism Business Improvement District (LTBID) which was established October 2, 2015, by Resolution No. 2015-159. The report spells out any changes to the boundaries, proposed activities, costs to provide those activities as well as estimated surplus, and contributions made from sources other than assessments as required by California Streets and Highways Code 36650. If there are any questions on the enclosed report, please feel free to give me a call. Visit Lodi! Conference & Visitors Bureau 25 N School St. Lodi, CA 95240 t [209] 365-1195 f [2091365-1191 Lodi Tourism Business Improvement District Annual Report Boundaries There are no proposed changes to the boundaries or assessed business. Improvements and Activities The improvements and activities for the fiscal year 2023 are consistent with the Management District Plan. There are no proposed changes. sales and N?arker;rg A sales and marketing program will promote assessed businesses as tourist, meeting, and event destinations. The sales and marketing program will have a central theme of promoting Lodi as a desirable place for overnight visits. The program will have the goal of increasing overnight visitation and room night revenues at assessed businesses and may include the following activities: • Internet marketing efforts to increase awareness and optimize internet presence to drive overnight visitation and room sales to assessed businesses; • Print ads in magazines and newspapers targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; • Television ads targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; • Radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; • Attendance of trade shows to promote assessed businesses; • Sales blitzes for assessed businesses; • Familiarization tours of assessed businesses; • Preparation and production of collateral promotional materials such as brochures, flyers, and maps featuring assessed businesses; • Attendance of professional industry conferences and affiliation events to promote assessed businesses; • Lead generation activities designed to attract tourists and group events to assessed businesses; • Sponsorship of events that attract tourists and groups to assessed businesses; • Director of Marketing and CEO meetings to plan and coordinate tourism promotion efforts for assessed businesses; • Education of hospitality staff on service and safety (related to alcohol and food) designed to create a visitor experience that will bring repeat visits to assessed businesses; and • Education of lodging business management and the owners' association on marketing strategies best suited to meet assessed business's needs. Administration and Operations The administration and operations portion of the budget shall be utilized for administrative staffing costs, office costs, and other general administrative costs such as insurance, legal, and accounting fees. Visitor Service Enhancements The Visitor Services Enhancement (VSE) program will provide potential funding for programs and initiatives based on criteria to be developed by the LTBID. The focus of the VSE program will be on the entire destination brand footprint to ensure a consistent brand experience throughout the LTBID. VSE may include: • A long-term ambassador program with trained staff that educates front-line workers on what makes Lodi unique as a destination and on customer service techniques that enhances the visitor experience and encourages additional overnight visitations; • Visitor Center and kiosk improvements, including new technology -driven visitor information enhancements; and • Brand -centric visitor services training program for both public and private sector staff Collection Fee The City shall be paid a fee equal to three and one-quarter percent (3.25%) of the amount of the assessment collected to cover its costs of collection and administration. Cost Estimate 2023 Proiect;on The cost of providing improvements and activities for 2023 is consistent with the Management District Plan. The total budget has changed slightly due to normal fluctuations in hotel occupancy and room rates. The anticipated total BID revenues for 2023 are $1,175,000. Category % $ Sales & Marketing 76.00% $895,925 Administration 14.50% $171,400 Visitor Services 1% $7,737 Contingency / Renewal 5.25% $61,750 City Fee 3.25% $38,188 Totals 100% $1,175,000 Assessment There is no change in the method and basis of levying the assessment. Assessment The annual assessment rate is four and one-half percent (4.5%) within the City of Lodi and three percent (3%) in the unincorporated areas of San Joaquin County of gross short-term (stays less than 31 days) room rental revenue. Based on the benefit received, assessments will not be collected on stays of more than thirty (30) consecutive days. Assessments pursuant to the LTBID shall not include room rental revenue resulting from stays pursuant to contracts executed prior to September 1, 2015. The term "gross room rental revenue" as used herein means: The consideration charged, whether or not received, for the occupancy of space in a hotel valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction therefrom whatsoever. Gross room rental revenue shall not include any federal, state, or local taxes collected, including but not limited to transient occupancy taxes. The assessment is levied upon and a direct obligation of the assessed lodging business. However, the assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes. Each transient shall receive a receipt for payment from the business. The assessment shall be disclosed as the "LTBID Assessment." The assessment is imposed solely upon and is the sole obligation of the assessed lodging business, even if it is passed on to transients. The assessment shall not be considered revenue for any purposes, including the calculation of transient occupancy taxes. Bonds shall not be issued. Pe;alt°es and Lriterest • Any lodging business which fails to remit any assessment imposed within the time required shall pay a penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment. • Any lodging business which fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment and the ten percent (10%) penalty first imposed. • If the City or County determines that the nonpayment of any remittance due is due to fraud, a penalty of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the penalties stated in subsections 1 and 2 of this section. • In addition to the penalties imposed, any lodging business which fails to remit any assessment imposed shall pay interest at the rate of one-half of one percent (0.5%) per month or fraction thereof on the amount of the assessment exclusive of penalties, from the date on which the remittance first became delinquent until paid. • Every penalty imposed and such interest as accrues shall become a part of the assessment required to be paid. Surplus and Other Funding :S°.:rpius We do not anticipate a surplus in 2023. Ct3her 7:U�14i;jg There are additional estimated revenues of $22,440 from the following sources: Source Estimated Amount Tourism Event $10,200 Website Advertising $2,400 Retail $2,400 Marketing Services Fees $6,000 Ambassador Program Registration Fees $1,440 Total $22,440 i" Results While occupancy numbers are off slightly from last year, room demand remains consistently strong, with February through September occupancy running between 74.5% and 78.7%*. YTD revenues as of September 30 are up 1% over the same period in 2021*. As of October 31, we have created over 57.2 million advertising impressions (an 8.7% increase over 2021) for Lodi through daily social media posts, emails, digital and print ads, including ads on Facebook, Instagram, and Google; in the Sacramento Airport; 7 digital billboards; in publications including Here Comes the Guide, Sactown Magazine, the Bay Area News Group (Hearst Publications), Spotify, and more. Our promotions also reached visitors through streaming tv, podcasts, streaming radio, and digital banner ads on LA Times, KCRA, SF Chronicle, USA Today, ESPN, Reader's Digest, Time, and more. *According to the September 2022 Smith Travel Research report on 9 Lodi franchise properties