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HomeMy WebLinkAboutMinutes 10/17/2002 CALL TO ORDER: ROLL CALL: Approval of Minutes 2002 Marketing Efforts 2003 Allocations LODGING TAX ADVISORY COMMITTEE Port Angeles, Washington October 17, 2002 Councilman Campbell called the meeting of the Lodging Tax Advisory Connnittee to order at 3 :05 p.rn. Members Present: Councilman Campbell, Councilmember Rogers, Zae Bayton, John Brewer, Carol Griffith, Jim Haguewood, Patty Hannah, Jack Harmon, Steve Oliver, and Bill Rinehart. Members Absent: Bob Harbick. Staff Present: Economic Development Director Smith, Finance Director Ziomkowski, Clerk Upton, and Recreation Services Manager Cole. Others Present: Russ Veenema, John Platt, Brian Pettyjohn, Michael Leuhers, Jim Butler, Paul Lamoureux, Jeff Chew, Allan Harrison, Dennis Bragg, and Dick Goodman. Approval of Minutes: Bill Rinehart moved to approve the Lodging Tax Advisory Committee minutes of April 18, 2002, and June 5, 2002. The motion was seconded by John Brewer and carried unanimously. Reportfrom Port Angeles Chamber of Commerce Regarding 2002 Marketing Efforts: Russ Veenema, Chamber of Commerce Executive Director, with the use of Power Point, submitted a status report on the 2002 marketing efforts. Mr. Veenema displayed various ads placed in such periodicals as Sports Etc. and the East Side Journal, as well as the cooperative monthly campaign in the Tacoma News Tribune. He delineated several record-setting events held since February, all of which either tied with or improved upon prior attendance. Mr. Veenema directed attention to several new and expanded events held throughout the year. Mr. Veenema then provided a report on several categories that had been previously agreed upon for tracking purposes: 1. Reader response, year to date, is 25% ahead of2001; 2. The door count is up 12%; 3. Room tax revenues are I % above 200 I, year to date, and Mr. Veenema explained defining factors that have impacted the revenues; 4. Sales tax revenues, which correlate to room taxes, are also up 1%; 5. Visits to the web site have increased 25% over the previous year; 6. The City-wide occupancy is at 57%, which reflects a spread of 15 - 20%. 2003 Allocations - Port Angeles Chamber of Commerce Request: Mr. Veenema submitted the Chamber's proposal for 2003 lodging tax allocations, as follows: -1- LODGING TAX ADVISORY COMMITTEE October 17, 2002 2003 Allocations (Cont'd) Income 2002 2003 (Projected) Room Tax $390,000 $409,500 Reserve/Carry Over Funds 58,880 20,000 Total Income $448,880 $429,500 EXDenses 2002 2003 Vern Burton Center $ 48,680 $ 47,155 Conference Center 100,000 100,000 Special Events 48,000 40,000 Advertising & Promotions 134,900 144,345 Visitor Center 50,900 50,000 Parks & Rec 10,000 20,000 Joint Marketing 18,000 12,000 Administrative Support 15,000 14,800 Charges for Services 1,200 1,200 Total Expenses $426,680 $429,500 Lengthy discussion followed, and the question was raised as to whether it would be prudent to decrease the amount paid into joint marketing. Mr. Veenema spoke to the benefits of coordinated marketing under the auspices of the Visitor & Convention Bureau, the cohesiveness of the group, and the fact that the group has applied to handle the mitigation funds for the Hood Canal Bridge. After due consideration, it was suggested that the joint marketing commitment be returned to the $18,000 figure with the use of$6,000 from advertising and promotions. The committee members discussed the means by which advertising and promotions could make up the difference, such as through interest income and increased reserves. Steve Oliver moved to approve the budget as presented, with the following changes: I.) Increase reserve funds to $22,000,2,) That interest income on the reserve be added to income in the amount of $4,000; and 3,) That joint marketing expenses be increased to $18,000, The motion was seconded hy Bill Rinehart and carried 9 - 0, with John Brewer abstaining. Therefore, the recommendation to be forwarded to the City Council is as follows: Income 2002 2003 (Projected) Room Tax $390,000 $409,500 Reserve/Carry Over Funds 58,880 22,000 Interest Income 4,000 Total Income $448,880 $435,500 Exnenses 2002 2003 Vem Burton Center $ 48,680 $ 47,155 Conference Center 100,000 100,000 Special Events 48,000 40,000 Advertising & Promotions 134,900 144,345 Visitor Center 50,900 50,000 Parks & Rec 10,000 20,000 Joint Marketing 18,000 18,000 Administrative Support 15,000 14,800 Charges for Services 1,200 1,200 Total Expenses $426,680 $435,500 - 2- LODGING TAX ADVISORY COMMITTEE October 17, 2002 2003 Allocations (Cont'd) Conference Center Mr. Veenema indicated it would be helpful to get together with the Lodging Tax committee member again in approximately six weeks in order to discuss the 2003 marketing plan. Discussion then followed on funding for the Bed & Breakfast Association, as well as the ongoing effort to enhance the tracking of occupancies, where tourists are from, where money is being spent, and the like. Conference Center: Tim Smith advised the connnittee that Randal Ehm had revised the Marketing Plan for the Conference Center, a copy of which was forwarded to The Chambers Group who prepared a constructively critical report. That report was shared with Mr. Ehm who then further refined the plan based on the input provided. Before having Mr. Ehm join the discussion via conference call, the connnittee members engaged in lengthy discussion concerning financing connnitments and the situation relative to a parking structure. Mr. Smith explained the changes made in the building footprint that necessitated parking elsewhere. Because consideration is being given to a City parking structure, Mr. Ehrn has expressed interest in utilizing that structure for guest parking. Mr. Smith noted that Mr. Ehm will need to be a financial partner in this endeavor. Consideration was given to the process by which the Lodging Tax Advisory Connnittee would approve the Marketing Plan and whether The Chambers Group would again be asked for input based on Mr. Ehm's most recent refinements. In addition, some committee members were concerned about the short time frame made available to review the changes in order to be prepared to discuss these changes with Mr. Ehmat this meeting. Bill Rinehart spoke in support of having The Chambers Group review the changes prior to the time the Lodging Tax members have an in-depth discussion with Mr. Ehm. The group discussed the possibility of financing not being connnitted on the project until the time the Lodging Tax Advisory Connnittee has approved the Marketing Plan and recommended the connnitment of the lodging tax funds to the project. Discussion and debate continued on the process to be followed. Steve Oliver indicated it would be difficult for Mr. Ehm to obtain a financial connnitment until the true costs of the parking structure have been identified, as these costs would have to be incorporated into the overall project costs. Joining the meeting via conference call, Mr. Ehm was informed by Mr. Smith that the group was uncomfortable conducting an in-depth review of the Marketing Plan changes because they had just received their copies the day before this meeting. However, Mr. Ehm was asked to discuss the changes made to the Marketing Plan by virtue ofthe input from The Chambers Group. Mr. Ehm proceeded to review the changes, such as those related to projected financial impacts on the local economy, the impact of projected visitors, as well as the spending patterns of the visitors. In responding to a question, Mr. Ehm felt this Marketing Plan to be complete. He indicated that the Allied Hospitality Group is under contract to him for pre-development services, and the next step is to provide a very detailed marketing plan for the entire facility. When asked how important it is for the Lodging Tax Advisory Connnittee to approve the plan, Mr. Ehm felt it to be extremely important in that it would provide closure to this phase of the project and would move the entire project closer to completion. Mr. Ehm was further questioned on various details in the Marketing Plan, and he was then asked how much time would be needed to get the financing in place. Mr. Ehm indicated it should take 30 - 60 days, as the financiers would now need to enter into due diligence. Mr. Smith advised the group he is still awaiting the results of the parking feasibility study from Ravenhurst, which will be forwarded to Mr. Ehm immediately upon receipt. This study is critical to Mr. Ehm's ability to complete the financing package. Mr. Ehm further explained his plans for meeting the parking requirements for the facility. - 3- LODGING TAX ADVISORY COMMITTEE October 17, 2002 Corrference Center (Cont' d) Discussion followed concerning Marriott's involvement, and Mr. Ehm indicated Marriott has provided preliminary approval of the plans thus far. He then read an excerpt of a letter from Marriott, wherein Marriott expressed interest in participating in a franchise relationship for a full-service hotel. Mr. Ehm felt this was due to Allied's relationship with Marriott. Discussion followed, and Councilman Campbell felt it may be appropriate to have more time to review the Marketing Plan from the standpoint it will be the performance review document. He felt it important to understand the marketing goals in terms of how they can be met. Further, he indicated he would like to retain the opportunity to provide input to Mr. Ehm without holding the project up, and he was certain other committee members would like the same opportunity. Bill Rinehart suggested the committee take an additional two weeks to review the Marketing Plan in terms of whether Mr. Ehm has met the due diligence requirements. Mr. Smith reminded the committee that a draft contract has been written related to the commitment of lodging tax funds, and it references the Marketing Plan as an attachment. The next step, therefore, is to forward a recommendation to the City Council relative to approval ofthe Marketing Plan and to approve the commitment of the lodging tax funds subject to proof of financing. He added that it may be appropriate to add a specified time frame to the agreement as well. After further discussion, Bill Rinehart moved to send the amended Marketing Plan to The Chambers Group and ask if the issues that had been identified earlier were addressed in this revised plan. The motion was seconded by Carol Griffith. Discussion followed, and it was suggested there may be an alternative way of obtaining further input from The Chambers Group without having to pay for another complete review. The language of the motion was, therefore, expanded to include the recommendation that the Lodging Tax Advisory Committee fully review the revised Marketing Plan, that The Chambers Group be asked to review the plan as well, and that the next meeting involve a conference call with the committee and The Chambers Group to further discuss the plan. A vote was taken on the motion, which carried by a majority vote, with Steve Oliver voting in opposition. Next Meeting Next Meeting: The next meeting was set for Thursday, October 31, 2002, at 3:00 p.m. in the City Council Chambers, to further discuss the Ehm Marketing Plan. As a follow- up to Russ Veenema's request for another meeting in about six weeks, Tim Smith will advise the committee members later as to Mr. Veenema's availability. Adjourmnent Adjournment: The meeting adjourned at 5: 17 p.m. ((1 ~ ,/ ~) 'L Ao .L) ^-_ or~Pbell' Chair ~ Becky ~Clerk ~ - 4-