CITY OF DANA POINT AGENDA REPORT

Transcription

1 10/21/14 Page 1 Item #11 CITY OF DANA POINT AGENDA REPORT Reviewed By: DH X CM X CA DATE: OCTOBER 21, 2014 TO: FROM: SUBJECT: CITY MANAGER/CITY COUNCIL MIKE KILLEBREW, ASSISTANT CITY MANAGER URSULA LUNA-REYNOSA, COMMUNITY DEVELOPMENT DIRECTOR CHRISTY TEAGUE, ECONOMIC DEVELOPMENT MANAGER DANA POINT TOURISM BUSINESS IMPROVEMENT DISTRICT ANNUAL REPORT AND RENEWAL FOR 2015 RECOMMENDED ACTION: That the City Council 1) Adopt a Resolution entitled: A RESOLUTION OF THE CITY OF DANA POINT, CALIFORNIA, CONFIRMING THE 2015 ANNUAL REPORT AND DECLARING THE INTENTION OF THE CITY COUNCIL TO CONTINUE THE PROGRAM AND ASSESSMENTS FOR THE 2015 CALENDAR YEAR FOR THE DANA POINT TOURISM BUSINESS IMPROVEMENT DISTRICT (TBID); and 2) Set the date for public hearing for renewal of the Dana Point Tourism Business Improvement District on November 18, BACKGROUND: The four largest Dana Point hotels comprise the Dana Point Tourism Business Improvement District (TBID), including: the Doubletree Suites by Hilton Doheny Beach, Laguna Cliffs Marriott Resort & Spa, Ritz Carlton Laguna Niguel and St. Regis Monarch Beach. The General Managers serve as the TBID Advisory Board to direct spending and activities to promote Dana Point as an overnight destination. The TBID Advisory Board is seeking renewal for the 2015 Calendar Year. Tourism is the primary industry in Dana Point, and the hotel industry generates over 40% of municipal revenues, including transient occupancy tax (TOT), property tax, sales tax, restaurants and retail businesses. These revenues fund essential municipal services such as public safety, park maintenance, recreation, streets and other public capital improvements.

2 10/21/14 Page 2 Item #11 Tourism promotion is a specific purpose named in California Business Improvement District (BID) law. A BID is a benefit district where an industry or area assesses itself to spend collective funds on goals for mutually-beneficial purposes. BIDs are frequently used by hotels to fund tourism marketing and promotion efforts. Through BID selfassessment, business owners collectively pay for activities which could not be afforded by any single business and which serve to champion a destination area, as opposed to typical marketing efforts designed to promote an individual business. The 1989 California Streets and Highway Code sets forth specific actions to renew Business Improvement Districts annually. State law makes it clear that BID assessments are not taxes: California Streets and Highways Code 36501: (d) The Legislature finds and declares that tourism is a large and growing contributor to California s economy, and that promotion of a city s or county s scenic, recreational, cultural and other attractions as a tourist destination is an important public purpose. (e) The Legislature also finds and declares that assessments levied for the purpose of providing improvements and promoting activities which benefit individual businesses may also benefit the property within the area directly or indirectly and that those assessments are not taxes for the general benefit of a city, but are benefits upon the businesses for which the improvements and activities are provided (emphasis added). As a public-private partnership initiated by the hotels, in 2009 the City Council affirmed the creation of the Dana Point Tourism Business Improvement District (TBID) and approved assessments levied by the hotels which began January 1, The TBID hotels began collecting $3 per night room assessments in 2010 to collectively brand and promote Dana Point, including related activities such as advertising, public relations and marketing to attract and extend overnight stays. The City collects assessments, on behalf of the TBID, as a separate line item with monthly transient occupancy tax transmittals and subsequently transmits funds for TBID activities identified in the City Council approved annual report. The TBID assessment can be passed on to the customer or paid for by the hotel. It is a marketing fee self-imposed by the hotels and facilitated through the City as required by state law. The next steps for the TBID renewal will be to hold a Public Hearing at the City Council meeting on November 18, 2014, at which meeting the City Council will also consider a contract with Agency 51 for a 2015 Marketing and Communications Plan to execute activities including advertising, special events, and promotions to promote Dana Point as an overnight destination as outlined in the 2015 Annual Report.

3 10/21/14 Page 3 Item #11 DISCUSSION: Dana Point Tourism Industry as Economic Engine For the fiscal year ending June 30, 2014, tourism revenues included transient occupancy tax (TOT) collections of just over $11 million. This is a $921,000, or 9%, increase from the fiscal year, and only $291,000, or 2.5%, below the fiscal year, when TOT revenue to the City was at its peak of $11,298,000. TBID initiatives have contributed to the TOT revenue increase since the recession and have directly boosted revenues to both the resorts and the City. The four largest hotel properties represent approximately 90% of the TOT and 70% of the Dana Point hotel rooms. These larger Dana Point hotels have similar marketing objectives to brand market Dana Point as an upscale, resort overnight destination. The collective Dana Point branding and marketing activities are also intended to benefit smaller hotels, motels and other local visitor-serving businesses. With the addition of the St. Regis and its 400 hotel rooms in 2001, Dana Point has become an undisputed resort destination with nearly 1,900 hotel rooms. Hotel revenues provide funding for enhanced public improvements throughout Dana Point. The success of the larger hotels has provided funding necessary to achieve many of the public amenities that otherwise would not have been possible. A summary of the transient occupancy tax revenues is provided in the chart below. FY Total TOT From All Hotels 2001 $6,250, $7,103, $8,110, $8,367, $7,660, $9,338, $10,852, $11,298, $8,630, $7,221, $8,272, $9,382, $10,086,000 $11,007,000 In addition to substantial revenues, the tourism industry provides the greatest number of jobs in the community. The TBID hotels are the largest employers in Dana Point. In addition to hotels, visitor-serving employers include retail stores, restaurants, coffee shops, beach lifeguards and water activity companies such as fishing, whale watching, kayak rentals and sailing. Many of these employers are small businesses which provide services to visitors and residents. Overnight visitors enhance the Dana Point quality of life

4 10/21/14 Page 4 Item #11 and resort lifestyle by helping to support shops, restaurants, and businesses that residents also enjoy. Tourism Business Improvement Districts Since a BID fee is a benefit assessment and not a tax, BIDs are able to pay for programs and activities without relying on public funding. Tourism BIDs can provide destination marketing in ways distinctly different from municipal governments or individual businesses. TBIDs are public-private partnerships which benefit both destination cities and businesses located in those cities. BIDs are an effective finance tool available to the business community through cooperation with local government, as outlined in state law. The larger hotels requested the City s assistance to form a Tourism Business Improvement District. The TBID allows these essential businesses to better compete by assessing themselves to collectively market Dana Point as a destination. An increasing supply of luxury accommodations along the coast has threatened to reduce the Dana Point market share. Over 1,000 new rooms have been brought online in our coastal region in the last six years, substantially increasing the number of luxury rooms in our market. It cannot be taken for granted that Dana Point hotels would be able to continue the same level of success without the destination marketing to support them; and their success directly allows the City to fund quality public amenities. There are more than 70 Tourism Business Improvement Districts in California, with newlycreated TBIDs forming each year to compete for group and leisure visitor business. Nearby destination cities marketing to visitors through TBIDs include: Anaheim, Carlsbad, Costa Mesa, Del Mar, Garden Grove, Huntington Beach, Laguna Beach, Newport Beach and Oceanside. Larger cities with TBIDs include Long Beach, Los Angeles, Sacramento, San Diego and San Francisco. Dana Point Tourism Business Improvement District Activities and Renewal The City Council has received quarterly updates on 2014 TBID activities, which includes a successful meeting planner incentive program that has generated more than 10,000 new room bookings to date. Copies of the quarterly update reports are attached as Supporting Document B. Another major TBID initiative this year has been the development of the unique holiday light display IlluminOcean. The six-week lighting attraction will be open Thanksgiving through the weekend after New Year s Day at the Harbor and will help attract new leisure business during the holiday season, which is historically a slow period for business conferences. IlluminOcean is a 40 Nights of Holiday Lights attraction with 18 animated and walkthrough sea-life light sculptures, light tunnel experiences, a 50 high Tree of Lights, and light posts, banners, and holiday lighting decor along Dana Point Harbor Drive. Each of the four TBID resort properties will also incorporate custom IlluminOcean light sculptures. The IlluminOcean attraction will leverage and expand upon OC Dana Point Harbor s traditions including Holiday in the Harbor and the Boat Parade of Lights. IlluminOcean

5 10/21/14 Page 5 Item #11 would not be possible without the cooperation and hosting by OC Dana Point Harbor, including the County of Orange and Dana Point Harbor merchants. State law requires City Council approval of an annual report prepared with input from the Advisory Board. The annual report describes TBID activities to include: advertising, public relations and marketing activities which attract and extend overnight stays in Dana Point hotels. The annual report is included as Exhibit A in the proposed resolution attached as Action Document A. State law requires a public hearing to enable the City Council to hear and consider all comments regarding the renewal of the BID, affected businesses, or types of activities. The attached resolution sets the public hearing for the November 18, 2014 City Council meeting. The TBID Advisory Board approved the 2015 Annual Report and conceptually approved a corresponding 2015 Marketing Communications Plan with Agency 51 Advertising Agency. The 2015 contract with Agency 51 Advertising, which includes activities summarized in the Annual Report, is expected to be considered at the November 18, 2014 City Council meeting. For 2015, the four TBID hotels propose to continue to collect a $3 per night room assessment to brand and promote Dana Point as an overnight destination. TBID assessments are expected to generate an estimated $850,000 - $950,000 in the 2015 calendar year. The TBID Advisory Board has directed that 2015 activities include continuation of its successful meetings marketing program, leisure marketing and a contract with a marketing firm for destination website, video, digital and social media promotions, and public relations. If successful this holiday season, the TBID plans to support IlluminOcean again next year. CONCLUSION: State law requires the City Council to annually renew Business Improvement Districts and approve annual reports for each fiscal year. The General Managers of the Doubletree Suites by Hilton Doheny Beach, Laguna Cliffs Marriott Resort & Spa, Ritz Carlton Laguna Niguel and St. Regis Monarch Beach will continue to serve as the Dana Point Tourism Business Improvement District Advisory Board and continue their work to promote Dana Point as an overnight destination for the 2015 Calendar Year. NOTIFICATION AND FOLLOW UP: Doubletree Suites by Hilton Doheny Beach Laguna Cliffs Marriott Resort & Spa Ritz Carlton Laguna Niguel St. Regis Monarch Beach

6 10/21/14 Page 6 Item #11 STRATEGIC PLAN IMPLEMENTATION: The Dana Point Tourism Business Improvement District supports Strategic Planning Initiative IX: Foster a Vibrant Business Climate. FISCAL IMPACT: The purpose of the Dana Point Tourism Business Improvement District is to maintain and increase market share and occupancy of Dana Point hotels, resulting in continued and enhanced transient occupancy tax and other visitor-supported revenues. Other than administrative support and collections, there are no costs to the City of Dana Point associated with renewal of the Dana Point Tourism Business Improvement District. ACTION DOCUMENT: Page No. A. Resolution with 2015 Annual Report as Exhibit A... 7 SUPPORTING DOCUMENT: B Quarterly TBID Reports

7 10/21/14 Page 7 Item #11 ACTION DOCUMENT A RESOLUTION NO xx A RESOLUTION OF THE CITY OF DANA POINT, CALIFORNIA, CONFIRMING THE 2015 ANNUAL REPORT AND DECLARING THE INTENTION OF THE CITY COUNCIL TO CONTINUE THE PROGRAM AND ASSESSMENTS FOR THE 2015 CALENDAR YEAR FOR THE DANA POINT TOURISM BUSINESS IMPROVEMENT DISTRICT (TBID) WHEREAS, the Parking and Business Improvement Area Law of 1989 Section et seq. of the California Streets and Highway Code authorizes cities to establish and renew business improvement areas for the purpose of promoting tourism; and WHEREAS, on March 9, 2009, the City Council conducted a public hearing and approved Ordinance to establish the Dana Point Tourism Business Improvement District (TBID) beginning in the 2010 Calendar Year; and WHEREAS, on November 22, 2010, the City Council conducted a public hearing and approved Resolution to renew the TBID for the 2011 Calendar Year; and WHEREAS, on December 12, 2011, the City Council conducted a public hearing and approved Resolution to renew the TBID for the 2012 Calendar Year; and WHEREAS, on December 4, 2012, the City Council conducted a public hearing and approved Resolution to renew the TBID for the 2013 Calendar Year; and WHEREAS, on December 3, 2013, the City Council conducted a public hearing and approved Resolution to renew the TBID for the 2014 Calendar Year; and WHEREAS, the Advisory Board has requested the renewal of the TBID for the 2015 Calendar Year to continue its activities; and WHEREAS, all other findings of Ordinance to establish the TBID remain unchanged; and WHEREAS, the Advisory Board has prepared an annual report for the 2015 Calendar Year, which is attached as Exhibit A to this resolution; and WHEREAS, the annual report generally describes 2015 activities to be advertising, public relations and marketing activities which attract and extend overnight stays in Dana Point hotels; and WHEREAS, the annual report is on file with the City Clerk and provides a detailed description of the improvements and activities to be provided in the 2015 Calendar Year,

8 10/21/14 Page 8 Item #11 including the boundaries of the area and the proposed assessments to be levied upon the businesses within the area; and WHEREAS, it is the intention of the City Council to levy and collect assessments from the four businesses within the TBID for the 2015 Calendar Year; and WHEREAS, the City Council conducted a public meeting on October 21, 2014 to affirm the annual report and set the public hearing date for November 18, 2014, according to state law Sections and 36525; and WHEREAS, on November 18, 2014, the City Council will conduct a public hearing to renew the TBID at 6:00 p.m. (or as soon thereafter as possible), in the Dana Point City Council Chamber, Golden Lantern, Ste. 210, Dana Point, CA 92629; and WHEREAS, at the public hearing affected businesses will have the opportunity to protest the TBID renewal; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Dana Point as follows: A) That the above recitations are true and correct and incorporated herein by reference. B) The City Council confirms the annual report and declares its intention to renew the Dana Point Tourism Business Improvement District for the 2015 Calendar Year and to levy and collect assessments from affected businesses listed in Exhibit A and described as all hotels with greater than 190 hotel rooms within the boundaries of the City of Dana Point. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Dana Point, California, held on this 21st day of October, 2014, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Lisa A. Bartlett MAYOR

9 10/21/14 Page 9 Item #11 ATTEST: Kathy M. Ward City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF DANA POINT ) I, Kathy M. Ward, City Clerk of the City of Dana Point, do hereby certify that the foregoing Resolution No xx was duly adopted and passed at a regular meeting of the City Council on the 21st day of October, 2014, by the following roll-call vote, to wit: AYES: NOES: ABSENT: ABSTAIN: KATHY M. WARD CITY CLERK

10 10/21/14 Page 10 Item #11 EXHIBIT A DANA POINT TOURISM BUSINESS IMPROVEMENT DISTRICT ANNUAL REPORT FOR 2015 CALENDAR YEAR Purpose To collectively market Dana Point as an overnight destination Expected Revenue $850,000 - $950,000 Estimate of Surplus Carried Over from 2014 Fiscal Year $1,200,000 Activities Advertising, public relations and marketing activities which attract and extend overnight stays in Dana Point hotels. In 2015, the TBID plans to continue implementation of its Marketing Plan through a contract with a marketing firm, seek targeted meetings/conference business and leisure business to retain and grow market share, and to continue the IlluminOcean light display event to bring overnight visitors in the non-peak season. These activities are specifically listed with anticipated costs for each: Event Production & Support $800,000 Meetings Marketing Sales and Communications $475,000 Leisure Marketing & Promotion $180,000 Agency 51 Creative Management Fees: Website Maintenance and Development $ 32,000 Video Creation $ 30,000 Digital Paid Search (SEM) $ 60,000 Public Relations $150,000 Agency Services and Support $210,000 TOTAL MARKETING EXPENSES $1,937,000 The 2015 Activities Plan may be modified within these categories according to opportunities and strategic direction from the Advisory Board. Fiscal Year January 1, 2015 to December 31, 2015 This Annual Report of the Dana Point Tourism Business Improvement District (TBID) for the 2015 Calendar Year and is filed with the City Clerk, according to California Streets and Highways Code Sections The City Council approved an ordinance to establish the Dana Point Tourism Business Improvement District on March 9, 2009 to implement a program to promote Dana Point as an overnight destination as of January 1, The 2015 Calendar Year will be the TBID s sixth year of operation and fourth year operating with a comprehensive annual marketing firm contract.

11 10/21/14 Page 11 Item #11 The TBID Advisory Board has caused this Annual Report to be prepared for the 2015 Calendar year, for which assessments are to be levied and collected to pay the costs of activities described in this report. Assessment and Boundaries No changes in assessment or boundaries are proposed. The assessment is to be levied on all existing hotel businesses with greater than 190 rooms within the City of Dana Point at a rate of $3.00 per occupied room night subject to City of Dana Point transient occupancy tax. No contributions are made from sources other than TBID assessments levied. Advisory Board General Manager Richard Uribe or Designee Doubletree Suites by Hilton Doheny Beach Pacific Coast Highway Dana Point, CA General Manager Bruce Brainerd or Designee Ritz-Carlton Laguna Niguel One Ritz-Carlton Drive Dana Point, CA General Manager Jim Samuels or Designee Laguna Cliffs Marriott Resort & Spa Park Lantern Dana Point, CA General Manager Ian Pullan or Designee St. Regis Resort Monarch Beach One Monarch Beach resort Dana Point, CA Ex-Officio Board Member City Manager or Designee City of Dana Point

12 10/21/14 Page 12 Item #11 SUPPORTING DOCUMENT B Agency 51 Advertising Office: (877) West 4 th Street, 4 th Floor, Santa Ana, CA Quarter 1 Activity Report & Update Client Dana Point TBID Project City Council Q1 Update 4/8/2014 MEETINGS & GROUPS SALES PROMOTION: Through marketing efforts and partnerships with leading site selection and planning organizations, The Resorts of Dana Point are seeing tremendous growth in new business leads. As a direct result of this program, 7,391 rooms have been booked to consume through end-of-year 2015* totaling over $1.58 million in room revenue and another (estimated) $1.3 million in incremental Food & Beverage revenues. These figures do not reflect off-property dining and other activity with local businesses certain to positively affect the local economy in the coming year. TRADE SHOW ATTENDANCE: *As of 4/08/2013, 1,974 overnight rooms and $399,358 has been actualized. The Resorts of Dana Point had representation at GMITE: Los Angeles in February. The show is an appointment based reverse marketplace where more than 50 luxury meeting planners and corporate clients are introduced individually to various hotels and destinations. BUYER CHANNEL ADVERTISING As an integral part of the integrated marketing program in the Meetings market, a digital ad campaign was purchased to saturate the main online site sourcing and selection channel for meeting planners. The first of many placements for this year launched in April, with all tactics seeking to raise awareness of Dana Point and to steal share-of-voice from regional competitors. See Addendum A. EVENTS HOLIDAY LIGHTING PROJECT: In collaboration with Agency 51 and the DPTBID Advisory Board, Utopia Entertainment Inc. continues to refine the development of this exciting program. Set to debut around Thanksgiving 2014 running through New Years Week this initiative will drive exponential awareness and traffic to Dana Point. The final stages of more than a dozen lighting attraction/designs are set to begin production as early as May, each representing a key brand message or experience whales, dolphins, surfing, and other unique pieces. SPONSORSHIP:

13 10/21/14 Page 13 Item #11 The DPTBID has approved sponsorship funding for Doheny Surf Festival, Battle of the Paddle and DP Turkey Trot. Two other events Tall Ships and Concours d Elegance are awaiting final proposals from the producers for Advisory Board review. DIGITAL DEVELOPMENT SOCIAL MEDIA: The mydanapoint social channels continue to perform at high levels via increased traffic and engagement across the board. See Addendum B. 21,115 Facebook fans actively share and promote Dana Point; the latest post receiving more than 400 shares alone! The post organically reached over 54,000 people on the social networking site. Over 4,400 followers on Instagram

14 10/21/14 Page 14 Item #11 Addendum A: C-Vent Display Campaign

15 10/21/14 Page 15 Item #11 Addendum B: Facebook Posts, March / April 2014

16 10/21/14 Page 16 Item #11

17 10/21/14 Page 17 Item #11

18 10/21/14 Page 18 Item #11

19 10/21/14 Page 19 Item #11

20 10/21/14 Page 20 Item #11

21 10/21/14 Page 21 Item #11

22 10/21/14 Page 22 Item #11