Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Subject: Resolution granting consent to the City of Burlingame to include the unincorporated area of the County in the San Francisco Peninsula Tourism Marketing District
RECOMMENDATION:
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Adopt a resolution granting consent to the City of Burlingame to form the San Francisco Peninsula Tourism Marketing District (SFPTMD) and include the unincorporated area of the County of San Mateo.
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BACKGROUND:
In 2001, the San Mateo County Tourism Business Improvement District (SMCTBID) was formed pursuant to the Parking and Business Improvement Area Law of 1989, The San Francisco Peninsula (SFP) and San Mateo County lodging businesses seek to modernize the SMCTBID by forming a new District, the SFPTMD, pursuant to the Property and Business Improvement District Law of 1994.
The SFPTMD is a benefit assessment district proposed to create a revenue source to help fund marketing and sales promotion efforts for San Francisco Peninsula area lodging businesses. This approach has been used successfully in other destination areas throughout the state to improve tourism and drive additional room nights to assessed lodging businesses. The proposed SFPTMD includes all lodging businesses located within the boundaries of the cities of Belmont, Brisbane, Burlingame, East Palo Alto, Foster City, Half Moon Bay, Menlo Park, Millbrae, Pacifica, Redwood City, San Bruno, San Carlos, San Mateo, South San Francisco, and the unincorporated area of San Mateo County.
SFP and lodging business owners decided to pursue formation of the SFPTMD in order to create a revenue source devoted to marketing the San Francisco Peninsula area as a tourist, meeting, and event destination. If established, the SFPTMD would generate approximately $10,895,479 on an annual basis for promotion of travel and tourism specific to the San Francisco Peninsula area.
Tourism Marketing Districts
Tourism Marketing Districts (TMDs) utilize the efficiencies of private sector operation in the market-based promotion of tourism. These special assessment districts allow lodging business owners to organize their efforts to increase tourism. Lodging business owners within the TMD fund the TMD, and those funds are used to provide services that are desired by and benefit the lodging businesses within the TMD.
TMD benefits include the following:
• Funds cannot be diverted for other government programs;
• They are customized to fit the needs of each destination;
• They allow for a wide range of services; including destination marketing, tourism promotion, and sales lead generation;
• They are designed, created, and governed by those who will pay the assessment; and
• They provide a stable funding source for tourism promotion.
In California, TMDs are primarily formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of special benefit assessment districts to raise funds within a specific geographic area The key difference between TMDs and other special benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the TMD.
Management District Plan
The Management District Plan (Attachment 2) includes the proposed boundary of the SFPTMD, a service plan and budget and a proposed means of governance. The SFPTMD will include all lodging businesses located within the boundaries of the cities of Belmont, Brisbane, Burlingame, East Palo Alto, Foster City, Half Moon Bay, Menlo Park, Millbrae, Pacifica, Redwood City, San Bruno, San Carlos, San Mateo, South San Francisco, and the unincorporated area of San Mateo County.
The annual assessment rate is one- and one-half percent (1.5%) of gross short-term sleeping room rental revenue for lodging businesses with 5,000 square feet or more of dedicated meeting space, and 0.75% for all other lodging businesses within the SFPTMD’s boundaries. Based on the benefit received, assessments will not be collected on stays of more than thirty (30) consecutive days; stays provided to airline cockpit and/or cabin crews pursuant to an agreement between a hotel and an airline, which is in furtherance of or to facilitate such crews’ performance of their jobs for the airline, including layovers between flights; employees of the state or federal government if room charges are paid directly by their employing agency and copies of official travel orders are submitted as applicable; and any properly credentialed officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.
The proposed SFPTMD will have a five (5) year life, beginning October 1, 2023, or as soon as possible thereafter, and ending five (5) years from its start date. The assessment will be implemented beginning October 1, 2023, or as soon as possible thereafter. Once per year beginning on the anniversary of SFPTMD formation there is a thirty (30) day period in which business owners paying fifty percent (50%) or more of the assessment may protest and begin proceedings to terminate the SFPTMD.
The City of Burlingame shall be responsible for collecting the assessments on a monthly basis (including any delinquencies, penalties, and interest) from each lodging business located in the boundaries of the SFPTMD. The City of Burlingame shall take all reasonable efforts to collect the assessments from each lodging business. The City of Burlingame shall be paid a fee equal to one percent (1%) of the amount of assessment collected or a flat fee of $60,000, whichever is greater each year to cover its costs of collection and administration.
DISCUSSION:
The proposed resolution grants consent to the City of Burlingame to form the SFPTMD and include the unincorporated area of the County of San Mateo in the SFPTMD and will enable the City of Burlingame and the San Mateo County/Silicon Valley Convention and Visitors Bureau dba The San Francisco Peninsula (SFP) to move forward with the SFPTMD formation process. Upon successful formation, the SFPTMD will be governed by SFP and by the Management District Plan and will be facilitated by the Burlingame City Council.
FISCAL IMPACT:
None immediately. Because the SFPTMD programs are intended to increase room night sales for assessed lodging businesses within the SFPTMD, there may be an increase in tax collections.
Attachments:
1. City of Burlingame Resolution Requesting Consent from the cities of Belmont, Brisbane, East Palo Alto, Foster City, Half Moon Bay, Menlo Park, Millbrae, Pacifica, Redwood City, San Bruno, San Carlos, San Mateo, South San Francisco, and the unincorporated area of San Mateo County
2. SFPTMD Management District Plan