DEL MAR — With their last batch of questions addressed, City Council members voted 4-1 at the June 21 meeting to move forward with the creation of a Tourism Business Improvement District which will allow Del Mar hotels to charge guests a 1 percent assessment that will be used to attract more visitors to the beachside city.
Last year hoteliers began discussing the formation of a marketing district to help promote themselves and the city. Civitas Advisors Inc. was hired to help develop a program for Del Mar.
Council voted to begin the process this past January, but a lack of staff time and money and a handful of questions and concerns caused them to delay a decision until now.
The issues included whether participation by hotels can be voluntary, which it cannot; if the city could recover all legal and other costs for establishing the district, which it can; and how the district will be governed, a process that resulted in Councilman Don Mosier not supporting the program.
The original plan had the Del Mar Village Association, or DMVA, handling administrative duties, but John Lambeth, Civitas president, said hotel owners and the DMVA agreed it would make more sense to have the management be separate.
Lambeth said nearly all of the 50 tourism districts in California use this type of governing system. DMVA will have an ex-officio, nonvoting seat on the board of directors.
“DMVA is an important local partner and they should be at the table and their voice should be heard,” Lambeth said. “But in terms of a vote on spending the money, it made more sense to have that rest with the lodging community.”
Mosier, who has served on the board of directors for a number of nonprofits, disagreed. “It’s always nice to have somebody who doesn’t have an immediately vested interest and get some outside advice,” he said.
“I don’t see the harm of having one vote that might occasionally dissent in doing business. I actually think having a little more diversity of opinion leads to better decision making.”
Councilman Mark Filanc said he didn’t have a problem with the governance structure. “This is something that they’re requesting,” he said. “They’re going to manage it and they’re probably best-suited because this is their industry.
“That’s their expertise,” Filanc said. “My assumption is they’ll bring that expertise to bear in the governance of this committee.”
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 the two will be unrelated.
Before the district can be formed, at least 50 percent of hotel operators must support the plan, which they do, Lambeth said.
Hotel visitors staying less than 30 days will pay 1 percent of their gross room rental revenue into the district. Government employees on government business, bed-and-breakfast establishments or short-term vacation rentals would be exempt.
The board will be subject to the Brown Act and Public Records Act. City Council will receive an annual report. The district automatically expires after five years. To renew, hoteliers must go through the same process again. If approved, it will be valid for 10 years. Participants will have an opportunity to protest the district annually.
The assessment is currently expected to garner approximately $130,000 annually. About $96,000, or 75 percent, will be spent directly on marketing, such as tourism promotion and special events. Downtown improvements and the DMVA main street program will each receive 10 percent, or $13,000. Only 5 percent, or $6,500, will be used for administrative costs.
In earlier meetings, council members expressed a desire to “brand” Del Mar to differentiate businesses that are actually within city limits from those that are not but include Del Mar in their names.
“It may not be enough to brand the city in terms of what you’d really like to do but it certainly can pay for some marketing efforts that will help drive visitors to the city,” Lambeth said.
“I, for one, think we should move forward and set those dates and hear from the public and get going,” Mayor Richard Earnest said.
With that, council set the resolution of intention and first public hearing for the July 12 meeting.