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HomeMy WebLinkAboutMinutes 03/24/2000 CALL TO ORDER- REGULAR MEETING: ROLL CALL: Approval of Minutes Tourism Marketing Plan Long Range Goals LODGING TAX ADVISORY COMMITTEE Port Angeles, Washington March 24, 2000 Councilman Wiggins called the meeting of the Lodging Tax Advisory Committee to order at 2:00 p.m. Members Present: Councilman Wiggins, Councilman Campbell, Zoe Bay ton, Carol Griffith, Jim Haguewood, Patty Hannah, Bob Harbick, and John McCullough. Members Absent: David Morris and Steve Oliver (Clay Oakes has resigned). Staff Present: Manager Quinn, Clerk Upton, and Finance Director Ziomkowski. Others Present: None. Approval of Minutes: Patty Hannah moved to approve the minutes of the Lodging Tax Advisory Committee meetings of January 21 and March 2, 2000. The motion was seconded by John McCullough and carried unanimously. Tourism Marketing Plan: Councilman Wiggins reported that he had been surprised by the announcernent that Wendt Advertising had closed its office in Spokane and had moved to Montana. In that regard, he spoke with Rick Hert of the North Olympic Peninsula Visitor & Convention Bureau and learned that a committee was being formed to select a replacement. Councilman Wiggins inquired as to whether there were any volunteers who would like to serve on this committee. Bob Harbick and Carol Griffith offered to serve as representatives of the Lodging Tax Advisory Committee. Long Range Goals: Councilman Wiggins directed attention to the agenda that had been distributed to the members delineating the current Lodging Tax allocations. The Committee discussed the corresponding dollar value for each category as well. Organizations New Events Marketing Capital Irnprovements 45.5% 1.S% 39.5% 13.2% $173,000 7,000 150,000 50,000 Also, the Committee members were given spreadsheets reflecting hotel/motel tax collections for the years, 1995 - 1999 (first 2%) and 1995 - 1999 (second 2%). Corrections were made to the above listed allocations, so the numbers and percentages were changed to read as follows: Organizations New Events Marketing Capital Improvements 37.6% 1.S% 39.5% 21.1% $143,000 7,000 150,000 SO,OOO -1- LODGING TAX ADVISORY COMMITIEE March 24, 2000 Long Range Goals (Cont'd) Discussion was generated on the goal of the tax, which is to increase "heads in beds". Further, the Committee members questioned whether the goal is being reached by virtue of the current funding allocations. It was agreed that the success of advertising is extremely difficult to measure. In considering possible changes to the allocations, Patty Hannah suggested the Committee create a category for funding future capital. This, however, generated debate on whether capital should be set aside when there is no specific project for which the funding is intended. Jim Haguewood offered a scenario to increase lodging tax revenues, that being to develop high-cost rnotel rooms by issuing an RFP on the Oak Street property for hotel rooms. He calculated that 20,000 room nights would equate to $100,000 in lodging tax revenues. Further, he suggested that $100,000 oflodging tax revenues be set aside every year to be used toward a convention center, which would be operated by the City and tied to the RFP on the Oak Street property for a 120-room hotel. Jim clarified that the City would build the convention center, a private entity would build a hotel, and the private investor would have an additional investment in the convention center. Jim further explained that this proposed scenario would result in two first-class hotels marketing the convention center. He has discussed this possibility with the management of the Red Lion, and they have indicated they must be certain there will be a market share for their hotel. The Red Lion has expressed interest in providing financial assistance to the endeavor. Jim felt that having the combined marketing efforts of two hotels could equate to a marketing investment of approximately $400,000 per year. The percentages would be in the City's favor if there are two facilities marketing the convention center. In addition to establishing the goal of putting "heads in beds", there is the added goal of attracting more people to town to spend money. Discussion ensued about the approach used in Ocean Shores, and Jim further explained his concept in that he was suggesting a separate convention center on either the Tidelands East or Tidelands West. He felt this proposal would result in increased lodging tax revenues and would put the City in a better position to ensure the success of the investment. The concept generated a great deal of discussion, and Jim indicated he would be more comfortable investing lodging tax funds, knowing that the City would be increasing the revenues because of this project. It was agreed there would be sufficient funds by the end of 2000 to set aside the first $100,000. Manager Quinn emphasized the importance of return on investment, and he felt there must be some kind of criteria that can be established in that regard. The hotel would have to do its own marketing; it wouldn't be able to rely solely on the Chamber of Commerce and the Visitor & Convention Bureau. One advantage to locating a convention center at the Red Lion relates to ongoing overhead and maintenance. Port Angeles is presently at a 60% occupancy rate, which is a factor to be considered by anyone hoping to build a new facility. Jim explained that if an RFP is issued, it will be necessary to identify what the City is willing to contribute in the form oflodging tax revenues. The City must be willing to put sornething on the table. Therefore, the Committee members considered how much could be set aside for a convention center. Councilman Campbell agreed that $100,000 per year, plus whatever potential increase is generated in hotel/motel taxes, should be dedicated toward a bond issue for a convention facility. Using that figure as a guideline, the Committee delineated possible allocations, as follows: - 2 - LODGING TAX ADVISORY COMM1TIEE . March 24, 2000 Long Range Goals (Cont'd) $365,000 (-) 100,000 (-) 50.000 $215,000 (-) 50.000 $165,000 (-) 45.000 $120,000 (-) 44.500 $75,500 Revenue Convention Center Vern Burton Debt Subtotal Visitor Information Center Subtotal Visitor & Convention Bureau Subtotal Organizations & New Events Balance to Marketing Included in the above figure of $44,500 for Organizations and New Events, the Committee established the following allocations: Parks & Recreation - $2S,000; Juan de Fuca Festival - $4,000; Hurricane Ridge - $3,500; Storytellers - $2,000; and new events - $7,000. Based on the recommendation to set aside $100,000 per year for a convention center, Manager Quinn offered to wean the $28,000 for Parks & Recreation out oflodging tax funds and to keep that effort alive through the City's General Fund. After further discussion, it was moved by John McCullough and seconded by Orville Campbell that the Lodging Tax Advisory Committee recommend that $100,000 per year, plus any increase generated by the new facility, be dedicated toward the cost of a convention center. A vote was taken on the motion, which carried by a majority vote, with Bob Harbick voting in opposition. Jim Haguewood indicated that the idea of a hotel is key to this scenario, and it is yet unknown as to the position the Port might take. It was moved by Jim Haguewood and seconded by John McCullough that this Committee endorse the concept of an RFP for the Oak Street properly to be used for a ISO-room hotel and, further, that a convention center be conditioned on the hotel. A vote was taken on the motion, which carried unanimously. Discussion then centered around an upcoming meeting of the Downtown Forward Executive Committee, at which time the Port Executive Director will submit a status report on the Oak Street property. Consideration was given to possible scenarios by which the propetty might be developed in line with Jim's suggestion. Manager Quinn indicated there rnay be a need to establish a time limit in pursuing the project, and he assured the Committee that City staff will open discussion with the Port on this endeavor. Next Meeting Next Meeting: It was agreed the next meeting will be held on Friday, May 5, 2000, at 2:00 p.rn., to hear a report on the marketing program. ADJOURNMENT: The meeting adjourned at 3:30 p.m. ~0~~ AtJ(I~ J1pTLlA Glenn Wiggins, Chair Becky J. Upt, Clerk .- - 3-