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City Council agrees to disband the Tourism Business Improvement District, which allows hotel operators to charge guests an additional 1 percent fee for marketing. Photo by Bianca Kaplanek
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TBID dissolved

DEL MAR — Group marketing efforts for Del Mar’s six hotels will continue, as will funding by their guests, but without the Tourism Business Improvement District.

With Terry Sinnott absent, council voted 4-0 at the Sept. 21 meeting to allow the five-year-old organization to automatically expire on Sept. 30 and replace it with a model that provides a comparable amount of funding for downtown marketing.

Presented with three options, council chose a model that will be funded by the transient occupancy tax, or TOT, which is paid by hotel visitors.

The Del Mar Village Association, under an initial 18-month agreement, will help market the hotels and other businesses. If all goes well it will become an annual agreement beginning in fiscal year 2017.

The TBID, as it is known, was authorized in 2010 under a five-year agreement that allows hotel operators to charge guests an additional 1 percent fee that is collected with the transient occupancy tax.

It floundered with marketing and management issues for the first few years. The board of directors, made up of hoteliers, had difficulty reaching a quorum during meetings, partly because meetings were sporadic. The group also struggled to show concrete evidence their efforts were increasing hotel stays in the seaside village.

But the district seemed to have hit its stride within the last 12 months, having developed a website hoteliers say produced good results. They initially were seeking a 10-year renewal because the process is costly.

In early discussions about the expansion council agreed to consider only another five-year term, if that.

All money raised from the 1 percent fee must be used for marketing to attract more visitors to lodging facilities in Del Mar, although some funds can go to downtown improvements and events, such as the annual Christmas tree lighting ceremony.

TBID money was used to develop the historic Del Mar walking tour, pedestrian directory signs and a Del Mar Village brochure.

Council has questioned whether TBID is the best use of funds since it limits how the money can be spent.

With the TBID dissolved, the fee paid by hotel guests will be eliminated and replaced by an identical 1 percent increase in the TOT.

In 2008, 62 percent of Del Mar voters approved a TOT increase from 10.5 percent to a maximum of 13 percent. Because the economy was weak at the time council only raised it to 11.5 percent.

Once the TBID is disbanded council members plan to raise the TOT to 12.5 percent. TOT money goes into the general fund.

But plans are to use the estimated $205,000 the increase will generate for continued promotion of travel and tourism specific to Del Mar, including maintaining the Dream Del Mar website. That money will be allocated, via a contract, to DMVA through the city’s budget approval process.

Jen Grove, DMVA executive director, said the option selected by council is the DMVA preference.

She said the hoteliers support the model with the understanding that funds are used for downtown marketing. She also said hotel representatives will be part of the DMVA committee overseeing promotion efforts.

“We really want to support the hotels and we want their involvement,” Grove said. “I have the utmost respect for their input on any marketing that we would be doing.”

Mayor Al Corti said the new model will be more effective and provide easier management and more flexibility.

Councilman Don Mosier, who has been involved with the TBID since its inception, said he strongly supports the group but he has been frustrated at times because it is a small organization.

Operationally, he said, the DMVA is a “much sounder group of people to work with” and more likely to accomplish the city’s objectives.

He urged his colleagues not to abandon the new model in two years. “Give it a chance to succeed,” he said.

Grove said TBID efforts are only funded through the end of October. Council agreed to expedite the TOT replacement financing and accommodate bridge financing for DMVA if needed.

“This has been a long road but I think we’ve come to a reasonably good decision,” Councilman Dwight Worden said.