DEL MAR — Del Mar hoteliers may soon be allowed to charge guests an additional fee that would be used to attract more visitors to the beachside city.
Council members voted unanimously at the Dec.
14 meeting to move
forward with the creation
of a Tourism Business Improvement District, setting dates for three required public meetings on Jan. 25, Feb. 8 and a final hearing on March 22.
Hotel operators first approached council about forming such a district last year. Three months ago, John Lambeth, president of Sacramento-based Civitas Advisors Inc., made a formal presentation to council members and the public.
At the time, Lambeth said he hoped to begin the process in December so hotels could start collecting the fee in February. However, council members requested more details, specifically those concerning administration of the plan.
The district will include the six motels, hotels and inns currently located in Del Mar. All future lodging businesses will be subject to the assessments. Money will be collected by the city with the transient occupancy tax, although it will be completely unrelated to the TOT.
“The idea is to keep the administrative burden on the city as low as we can,” Lambeth said. The city will receive a fee for its collection efforts.
The proposed assessment would be 1 percent of gross room rental revenue — or approximately $130,000 annually — for stays less than 30 days. It will not apply to government employees on government business, bed-and-breakfast establishments or short-term vacation rentals.
The management structure changed slightly since the plan was presented in September. “There was talk that the Del Mar Village Association would manage the district, but DMVA and the hoteliers agreed it would make more sense to have the management be separate,” Lambeth said.
The current plan is to create a separate, nonprofit corporation with a volunteer board of directors comprising hotel operators. “This is a very common management structure for organizations like this,” Lambeth said.
The board would be subject to the Brown and Public Records acts. “There’s a lot of sunshine here — a lot of transparency,” Lambeth said. City Council would also receive an annual report. Councilman Richard Earnest asked Lambeth to include a provision that prohibits any member of the DMVA from serving on the board and vice versa.
About $97,500, or 75 percent of the money raised, will be spent directly on marketing, such as advertising, special event promotions and branding or name recognition. “The idea here is to drive more business, drive more visitors,” Lambeth said.
Another 10 percent each would go toward streetscape and capital improvements and the DMVA main street program. Only 5 percent, or $6,500, would be used for administrative costs. In the original plan, 75 percent of the fee was targeted for tourism promotion and the remaining 25 percent was to be split evenly between commercial zone improvements and administrative support.
Lambeth said there are currently 41 tourism business districts in California. He said Del Mar should see results within 18 to 24 months. Unless the city opts to continue the district, it will automatically cease to exist after five years.
Council members were supportive of the more detailed proposal. “I, for one, am happy to see a more flushed-out business plan,” Councilman Don Mosier said.
“We certainly do need to invest in promoting our city,” Councilman Mark Filanc said. “We have an awesome place to come. We need to get the word out there.” Filanc said the only downside he found with the plan was “competing dollars.”
“How much will the tourism dollar bear in taxation before they start going elsewhere?” he asked.
The fee, although collected with the TOT, would be a separate charge. However, it still increases the amount of additional money visitors pay beyond quoted room rates. Del Mar’s TOT is currently 11.5 percent. Neighboring Solana Beach is at 13 percent.
“As far as I know, it hasn’t hurt them a bit,” said Councilman Carl Hilliard, who didn’t see the additional 1 percent as a problem.
“From my point of view, I don’t think we’re pushing the barrier at all,” he said. “I think there’s a premium for being on the beach or near the beach.
“We could go higher than we’re authorized to go and I don’t think it would make a wit of difference. But that’s my personal opinion.”