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Carlsbad Considers Plan to Assess City’s Hotels

Facing a fourth year of flat funding from the tax Carlsbad charges visitors to stay in hotels within the city limits, the Carlsbad Convention & Visitors Bureau is on a fast track to establishing an independent source of revenue for tourism marketing.

Earlier this year, the bureau proposed a special business improvement district that would impose a self-assessed fee on the city’s 35 hotels that could more than double the $409,000 annual allotment it gets from the city.

While tourism officials say such a plan generally takes at least a couple of years to put in place, Pat Fearn, the bureau’s chairman, said there’s a good chance the special district could be up and running by fall.

A proposed ordinance to create the district is scheduled to go before the Carlsbad City Council in late June, Fearn said. Aside from being the bureau’s chairman, he is also president of Vista-based Certified Folder Display Service Inc.

In late May, the Carlsbad City Council approved loaning the tourism bureau $35,000 to hire consultants to study forming the district.

The city collects about $9 million annually from a 10 percent hotel room tax and has doled out about $409,000 to the tourism bureau in each of the last three fiscal years. And expectations are that the allotment will remain stagnant in the fiscal year that begins in July, Fearn said.

“If the council OKs the process (the proposed special district), then it moves forward with notices, hearings and time for protests,” he said. “We feel that this has strong support from the community.”

According to a code in California law, the plan, once it’s approved by the City Council, will take effect unless a majority of hotels within the proposed district protest the move, Fearn explained.

If the special district collects a $1 fee on the nightly room rentals at Carlsbad’s 35 hotels, he said the revenue generated could exceed $800,000 annually and possibly be as much as $1 million.

The hotels have a total of about 3,500 rooms. But some of the city’s smaller inns might be assessed a fee of less than $1, said Rob Sapp, the marketing director of the 329-room Four Seasons Resort Aviara.

“I don’t think anything is set in stone at this point,” Sapp said. “It might not make sense to assess a small motel more than 50 cents a night.”

The Four Seasons Resort Aviara is one of several Carlsbad hotels that comprise a steering committee formed to help study the proposed special district. Others include the 474-room La Costa Resort & Spa, the 160-room Hilton Garden Inn, the 78-room Olympic Resort Hotel & Spa, and the 10-room Pelican Cove Inn.

Aside from the hotel room tax allotment, the Carlsbad tourism bureau received an additional $30,000 in fiscal 2005 that came primarily from a marketing partnership with Carlsbad’s hotels. It is not a membership association.

Meanwhile, the San Diego Lodging Industry Association has proposed a tourism business district to assess a 2 percent fee on hotels within the city limits of San Diego. Late last month during a budget hearing, the San Diego City Council voted to shave funding for the San Diego Convention & Visitors Bureau by $1 million to $8.8 million in the upcoming fiscal year. The total annual operating budget for ConVis would then stand at $11.5 million.

The San Diego City Council directed City Manager Lamont Ewell to work with the lodging association to help the group come up with a proposed ordinance that the council could vote on.

West Hollywood was the first California city to create a tourism business improvement district in 1992, according to the Western Association of Visitors Bureaus. Others that followed include Costa Mesa, Huntington Beach, Laguna Beach, Pasadena, Sacramento, Santa Clara and Sonoma County has one as well. Anaheim, Modesto, San Luis Obispo, Paso Robles, San Jose and Long Beach are considering such special districts.

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