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HomeMy WebLinkAboutMinutes 08/02/2004 CALL TO ORDER: ROLL CALL: Committee Vacancies Update on Oak Street Conference Center and Hotel Approval of Minutes Oak Street Conference Center and Hotel LODGING TAX ADVISORY COMMITTEE Port Angeles, Washington August 2, 2004 Councilmember Rogers called the meeting of the Lodging Tax Advisory Committee to order at 3:05 p.rn. Members Present: Councilmember Rogers, Jim Haguewood, Bob Harbick, Jack Harmon, Councilmember Munro, and Dave Neupert. Members Absent: Steve Oliver and Bill Rinehart. There are three vacancies at the present time. Staff Present: Manager Quinn, Economic Development Director Smith, and Clerk Upton. Others Present: William Giraldez, Renee Rux, Brian Gawley, Jeff Lane, Bret Hendren, Russ Veenema, and Dick Goodman. Economic Development Director Smith informed the committee members there were corrections to the meeting agenda in that he would be submitting a status report on filling committee vacancies, plus Randal Ehm was unable to attend this meeting. Another meeting will be planned for the purpose of receiving a status report on the Oak Street Conference Center and Hotel. Committee Vacancies: Mr. Smith indicated there are three (3) vacancies at the present time on the Lodging Tax Advisory Committee, two vacancies representing those who collect the lodging tax and one vacancy for an at-large position. He felt it important to fill the positions as soon as possible. A special mailing to all of the lodging facilities was completed this past week, informing them ofthe vacancies and seeking applicants. Update on Oak Street Conference Center and Hotel: Mr. Smith indicated that, because Randal Ehrn was unable to attend today's meeting, another meeting of the Lodging Tax Advisory Committee will be scheduled for Monday, August 16,2004, at 3:00 p.m., for the purpose of receiving a status report from Mr. Ehrn. Approval of Minutes: Dave Neupert moved to approve the Lodging Tax Advisory Committee minutes of June 7, 2004. The motion was seconded by Jack Harmon and carried unanimously. Oak Street Conference Center and Hotel: Copies of Randal Ehrn's Progress Activity Report #9, dated July 16, 2004, were distributed to the committee, and Tim Smith reviewed the previous establishment of two important requirements of Mr. Ehm. Mr. Ehrn was to have submitted proof of financing and was to have broken ground on the facility by September, 2004. In addition, by March, 2004, Mr. Ehrn was to have submitted the application for the Building Permit. Mr. Ehrn did submit the Building Permit application in time; however, he was notified in April that the application was incomplete. He was asked for information that has not been forthcoming. Mr. Smith indicated that, due to increased project costs, Mr. Ehrn has been involved in value engineering that changed the exterior finish of the building as well as internal structural issues. Steel costs have escalated, thus resulting in configuration changes in -1- LODGING TAX ADVISORY COMMITTEE August 2, 2004 Oak Street Conference Center and Hotel (Cont'd) 2005 Budget Allocations for Marketing the interior, to include a diminished number of suites as well as changes to the conference space. Mr. Smith concluded that there is an incomplete Building Permit application, and there is no proof of financing. Mr. Ehm has now asked for an extension of one year of the Shoreline Permit and, without substantial progress, Mr. Smith indicated he has taken the position that he will not support such an extension. Acknowledging that he is not the final authority on the issue, he indicated the Lodging Tax Advisory Committee will be in a position of forwarding a recommendation to the City Council in this regard. Mr. Smith continued that, if something substantial does come about with the City receiving payment for the application fee, and there is substantial proof of financing, he would be willing to alter his position on the project. Community Development Director Collins had been asked for clarification with regard to the date ofthe Shoreline Permit, and he has responded that the actual date would be November 16. Lengthy discussion ensued, with the suggestion being made that consideration may need to be given to the cancellation of the City's funding commitment so that lodging funds could be made available in the event another party could accommodate the community's need for a conference center. Discussion also centered around whether there is a contingency clause in the lease with DNR, whether the City can free up the lodging funds for someone else, and whether any interest has been expressed by any other parties. Mr. Smith clarified that the decision to extend the Shoreline Permit rests with the Director of Conununity Development. In response to a question from Dave Neupert, Manager Quinn provided clarification on the matter of negotiated parking, noting that the City has determined the number of parking spaces required and has talked to Mr. Ehrn about being a participant in the parking facility. Mr. Ehrn would be responsible for his share of the spaces. It was agreed that further deliberation will take place at the August 16'h meeting, when Mr. Ehrn is present to submit a report. 2005 Budget Allocations for Marketing: Russ Veenema distributed information providing a breakdown of2003 and year-to-date 2004 statistics related to lodging taxes collected, sales taxes, occupancies, web hits, and Visitor Center door counts. After meeting with Finance Director Ziomkowski and Director Smith, it was concluded that lodging tax revenues for 2005 should reflect a 4.5% increase to $425,000. Mr. Veenema reviewed the proposed use of 2005 lodging taxes for marketing purposes, as follows: Caoital Proiects Vem Burton Center Conference Center Murals/Art Work Other Capital Projects Total Capital Projects $ 44,030 o o 130.000 $ 174,030 Event/Tournament Funding Parks and Recreation 25,000 Guest Service Visitor Center 55,000 Marketing Costs Administrative Support Special Project Grants Joint Marketing Media and Promotional Expenses Marketing Total 20,000 80,000 22,000 160.000 $ 362,000 - 2- LODGING TAX ADVISORY COMMITTEE August 2, 2004 2005 Budget Allocations for Marketing (Cont'd) Proposal for 2004 Special Event Marketing Next Meeting Adjournment Mr. Veenema's projected expenses for marketing totaled $362,000. He then reviewed a listing of possible funding options for capital projects, and discussion followed on the matter of value received for funds invested in marketing as opposed to special events. Although it is difficult to track progress made by virtue of marketing efforts, Mr. Veenema noted the numbers have been very good in the second half of the year. Discussion ensued as to funding for Parks & Recreation, and it was suggested that the department be asked to increase the number oftournaments. Mr. Smith felt it would be appropriate for Parks & Recreation to provide the conunittee with a report as to its plans. Discussion also involved suggestions made as to funding possibilities, such as for lights at Volunteer Field, covered tennis courts, and training for business owners. Concern was raised by Mr. Harbick as to lodging tax funds supporting Parks & Recreation tournaments, as he felt the General Fund should be responsible for those endeavors. Mr. Smith reminded the committee that it can make recommendations pertinent to lodging tax funds, but not General Fund activities. The commitment to capital projects was revisited, and Jim Haguewood recalled that a previous commitment had split the funds at 30-30-30. However, Dave Neupert recalled that the agreed upon split had been 50-50. Discussion followed, and William Giraldez felt that restrooms on the Pier were in need of attention. Jim Haguewood expressed opposition to over expansion of marketing, as he was concerned about infrastructure and the fact that the City must be able to provide what it sells, Lengthy consideration was given to capital expenditures versus marketing, as well as the difficulty in quantifying marketing efforts. Mr. Smith felt that it would be appropriate for the Chamber of Commerce to return to the August 16'h meeting with suggestions as to capital investments. Proposalfor 2004 Special Event Marketing: Jeff Lane and Bret Hendren were present to submit a proposal for additional 2004 marketing efforts on behalf of the Washington Association of Historical Living Arts, sponsor of the October 15 - 17 "Pirates of Port Angeles" event. The Association raises funds to provide medical benefits to struggling artists, and it is pla1ll1ing the event which is scheduled to involve tall ship tours, a treasure hunt, and possible entertainment by Jimmy Buffet. Messrs. Lane and Hendren provided further information to the committee, noting that attendance is expected to exceed 5,000 people. They plan to heavily market the event in Seattle and Victoria, and they hope to attract national treasure hunting associations as well. They are requesting $5,000 from lodging tax funds for marketing purposes. In the ensuing discussion, it was pointed out that there is a funding process in place via the Chamber of Commerce. Mr. Giraldez, Red Lion Hotel, spoke in support of the event, and Mr. Smith reiterated the City's past support for events that increase tourism in the fall and the off-season. Because funds for 2004 special events have already been committed, Russ Veenema indicated that the committee would have to approve an expenditure of funds from reserve. Councilmember Rogers noted that, in the past, the committee has attempted to advocate the process for requesting funds. She felt it may be important to announce that funds may be available so other organizations have the same opportunity for funding. Jim Haguewood agreed, feeling it worthwhile to learn if there are other new events being planned for the fall season. It was agreed this matter would be given further consideration at the meeting to be held August 16,h Next Meeting: The next meeting will be held on Thursday, August 16, 2004, at 3:00 p.m., to receive a progress report from Randal Ehrn on the Oak Street Hotel/Conference Center, to consider the 2005 budget allocations for marketing, and to consider a request for release of 2004 reserves. re being no further business, the meeting adjourned at 4:48 p.rn. Aotl~ JJr.to~ Becky J. Upt City lerk - 3-