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HomeMy WebLinkAbout2011-06-28 - AGENDA REPORTS - TOURISM MARKETING DISTRICT (2)PUBLIC HEARING Agenda Item: 15 CITY OF SANTA CLARITA AGENDA REPORT Jason Crawford City Manager Approval: Item to be presented by: DATE: June 28, 2011 SUBJECT: ADOPT A RESOLUTION FOR REAUTHORIZATION OF THE TOURISM MARKETING DISTRICT (TMD) DEPARTMENT: City Manager's Office RECOMMENDED ACTION City Council conduct the public hearing and accept the Tourism Marketing District Annual Report and adopt a resolution titled: "A Resolution of the City of Santa Clarita to continue the Santa Clarita Tourism Marketing District (Business. Improvement Area) and the Hotel Tourism Marketing Benefit Zone in the City." BACKGROUND On April 28, 2009, the City Council unanimously approved the 21 -Point Business Plan for Progress, a broad -reaching economic development stimulus program designed to strengthen the local economy for both the short- and long-term. The 21 -Point Business Plan for Progress included goals to enhance local business partnerships, encourage quality job creation in the area through business retention, expansion and attraction, bolster retail spending, and attract external dollars to the community. The formation of a Tourism Marketing District (TMD) was a component of this Plan. City staff worked closely with the owners and operators of five of the local hotels to draft the program for fiscal year 2010-2011. The Tourism Marketing District is an assessment of two percent to be used for the sole purpose of marketing and enhancing Santa Clarita's image as a tourism destination. The Tourism Marketing District was unanimously approved by the Santa Clarita City Council on May 25, 2010, and has been in effect since July 1, 2010. The Tourism Marketing District operates with an annual budget of approximately $380,000. Funds generated through the Tourism Marketing District are used to develop marketing campaigns, increase awareness about the local hotels and the Santa Clarita area through public relations and advertising efforts, and attract high quality, revenue generating events to the City of Santa Clarita. In the past, events such as the PGA Champions Classic, AMGEN Tour of California, and Western States Police and Fire Games have equaled an economic impact of more than $10 million to the local economy. Funds generated through this program may be used to subsidize the costs associated with quality events such as those mentioned above that require financial support from the host community. The Tourism Marketing District is authorized by the Parking and Business Improvement Area Law `of 1989 (Section 36500 et. seq. of the Streets and Highways Code of the State" of California). This law permits the City to levy assessments on businesses within a business improvement area to use such proceeds for the benefit of the businesses within the area. The five hotels currently operating in the Benefit Zone. for fiscal year 20.10-2011 include: Best Western Valencia Inn, Holiday Inn Express Hotel & Suites, Courtyard by Marriott, Embassy Suites, and Hyatt Regency Valencia. Staff found all of the hotels are supportive of the proposed ongoing efforts and re-establishing the Tourism Marketing District because of the marketing efforts and programs designed to increase tourism business to Santa Clarita. All hotels will again designate one board member each for the Advisory Board, with the other two board seats appointed by the City Manager for a total of seven. Programs and advertising opportunities that were possible during fiscal year 2010/2011 as a result of the establishment of the TMD include inclusion in regional and national publications with destination features on Santa Clarita including Southwest Airlines Spirit Magazine, US Airways Magazine, Sports Destination Management Magazine; Sports Events Magazine, the summer tourism route trolley program and large poster placements at key areas of Burbank Airport promoting Santa Clarita as a key destination to visit. TMD funds are also used to work on data research identifying our core tourists. Events that the City were able to pursue as a direct result of the established district include the return of the AMGEN Tour of California and the United Soccer League Women's League Championship Games. The established Tourism Marketing District program was designed as an ongoing program but by law must be re -approved annually. The proposed schedule for the implementation of the Tourism Marketing District is as follows: • June 28, 2011 - City Council hold Public Hearing and at the conclusion of the hearing the Council may adopt the resolution. The adoption of the resolution will constitute the levy of the assessment for the fiscal year 2011-2012. • July 1, 2011 - Tourism Marketing District is effective. 121 Should the City Council approve this action, staff will commence the requited administrative proceedings, which. includes providing a copy of the Resolution of Intent to all property/business owners to be included in the Tourism Marketing District. ALTERNATIVE ACTIONS Other -actions as determined by City Council: FISCAL IMPACT The fiscal impact of the item is revenue neutral. Upon completion of the formation proceedings, it is estimated that approximately $380,000 will be generated and expended through the Tourism Marketing District in fiscal year 2011-2012. ATTACHMENTS 201106-28 Resolution TMD-UpdatedAnnualReportFY 2011-12 RESOLUTION NO. 11- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, TO CONTINUE THE SANTA CLARITA TOURISM MARKETING. DISTRICT (BUSINESS IMPROVEMENT AREA) AND THE HOTEL TOURISM MARKETING BENEFIT ZONE IN THE CITY. WHEREAS, pursuant to the Parking and Business Area Law of 1989, Section 36500 et seq. of the Streets and Highways code of the State of California,.the City Council adopted that certain Resolution No. 10-13, dated March 23, 2010, entitled "A Resolution of the City Council of the City of Santa Clarita Declaring its Intention to Establish a Business Improvement Area in the City of Santa Clarita to be Designated as the Tourism Marketing District ("TMD") and Setting a Time and Place of a Hearing to Consider the Establishment of Such Area", and caused said resolution to be duly published and mailed as provided by law. WHEREAS, a public hearing concerning the formation of said Santa Clarita Tourism Marketing District, hereafter referred to as TMD, was held on May 11, 2010 and May 25, 2010 at the hour of 6:00 p.m. in the Santa Clarita City Council Chambers at City Hall, 23920 Valencia Boulevard, Santa Clarita, California. WHEREAS, at said hearings all written and oral protests made or filed for or against the establishment of the TMD and a Hotel Tourism Marketing Benefit Zone (hereafter referred to as 'Benefit Zone"), were duly heard, evidence for and against the proposed action was received and a full, fair and complete hearing was granted and held. WHEREAS, the City Council heard all protests and all protests, both written and oral, were entered into the record and it was determined by the City Council that there was no majority protest within the meaning of said Streets and Highways Code, Section 36500 et seq. WHEREAS, the public and business interest, convenience, and necessity have facilitated the establishment of the proposed TMD and Benefit Zone. WHEREAS, in the opinion of the City Council, the businesses within the Benefit Zone will be benefited by the expenditure of the funds raised by the assessments as contemplated by said Section 36500, et seq. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. That Chapter 3.36 is hereby added to the Santa Clarita Municipal Code to read as follows: "Chapter 3.36 TOURISM MARKETING DISTRICT f Sections: 3.36.010 Establishment of Area and Benefit Zone 3.36.020 Description of Area and Benefit Zone 3.36.030 Method of Assessment 3.36.040 Funds 3.36.050 Use of Revenues 3.36'.060 Amendments 3.36.070 Effective Date 3.36.080 Validity of Resolution 3.36.010 Establishment of Area and Benefit Zone. Pursuant to Section 36500 et seq. of the Streets and Highways Code of the State of California, a business improvement area designated as the Santa Clarita Tourism Marketing District ("TMD") of the City of Santa Clarita is hereby created and established and the "Benefit Zone" is hereby created and established within such TMD. 3.36.020 Description of Area and Benefit Zone The boundaries of the TMD shall include all of the real property within the City of Santa Clarita and the boundaries of said area are coterminous with the City boundaries, a map of which is on file in the office of the clerk. The boundaries of the Benefit Zone shall include designated hotels now operating in the City identified and attached hereto as Exhibit "A" and may include hotels hereafter operating in the TMD pursuant to proceedings for inclusion. Hotel shall mean any structure, or any portion of any structure, which is occupied or intended or designed or occupied by transients, including but not limited to for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof, duplex, triplex, single-family dwelling units except any private dwelling house or other individually owned single- family dwelling rented only infrequently and incidental to normal occupancy or any timeshare as set out in Revenue and Taxation Code 7280; provided, that the burden of establishing that the facility is not a hotel shall be on the owner or operator thereof. 3.36.030 Method of Assessment A. Only those designated hotels included within the Benefit Zone (identified and attached hereto as Exhibit "A") shall be assessed. An annual assessment is to be levied against such hotels based on the benefits they derive from the program of activities. Businesses located outside the Benefit Zone (i.e., all non -hotel businesses) will not be assessed as they derive only, at most, an indirect benefit from the program of activities. B. This resolution and requirements established herein shall be applicable to all hotels in the designated Benefit Zone as said hotels existed as of the date of this resolution or as modified in subsequent proceedings for inclusion of hotels proposed to operate within the Benefit Zone. Any modification to the Benefit Zone or program of activities for which the assessments are to be levied would be subject to notification of all affected businesses within the TMD and a public hearing before the City Council. At such public hearing, the City Council shall hear all protests and receive evidence, including written protests, for and against such modifications, including the inclusion of additional hotels or business. Assessments on newly established hotels shall commence immediately upon the first day of operation and after the public hearing for inclusion of such property. C. In addition to any assessments, fees, charges or taxes imposed otherwise in the City, the City Council proposes to annually levy assessments against businesses in the Benefit Zone for the purpose of funding the programs, activities and services that will prom6te the City and hotels as a tourist destination. Each business in the Benefit Zone shall pay an assessment of 2 percent of total room rents charged and received from transient hotel guests who do not make the hotel their principal place of residence. D. The assessments hereby levied shall be due and payable and shall be paid at the same time and in the same manner that the transient occupancy tax is due and payable and shall be subject to the same penalties and interest for nonpayment. E. The Method of Assessment established by this resolution shall not be changed without written notice to all businesses in the TMD and a public hearing held by the City Council. At such a public hearing, the City Council shall hear all protests and receive evidence, including written protests, for and against the establishment of any change in the Method of Assessment. 3.36.040 Funds There is created a special fund of the City to be designated as the "Santa Clarita Tourism Marketing District Fund" into which all revenue derived from the assessments under this resolution shall be placed and such funds shall be used only for the purposes specified in this resolution. 3.36.050 Use of Revenues Revenues derived from the Method of Assessment described herein, shall be used for programs and activities that will promote the City and hotels as a tourist destination. The City shall allocate the revenue generated under the provisions of this resolution to the Santa Clarita Tourism Marketing District Fund and the Advisory Board appointed by the City Council shall provide recommendations as to the best use of these funds to support the programs, activities, and services to promote the City and hotels as a tourist destination on an annual basis. The Advisory Board shall make recommendations to the City of Santa Clarita and the City Council as to the use of available revenue for the following purposes: A. Promoting the identity of Santa Clarita through financial support of key regional and national events that support tourism and result in an economic impact; and B. Developing and implementing a destination marketing strategy and promotions designed to increase visitor attraction to Santa Clarita, including overnight visits; and C. Developing and undertaking an advertising and public relations program focusing on the business and leisure travel trade; and D. Annual operation expenses including, but not limited to, annual district administration functions and expenses, consultants, printing, postage and meetings. 3.36.060 Amendments Businesses within the TMD established by this resolution shall be subject to any amendments to the Parking and Business Improvement Area Law of 1989, Section 36500 et seq. of the Streets and Highways Code. 3.36.070 Effective Date The assessments to be collected pursuant to this resolution shall first be collected commencing Fiscal Year 2010-2011 (the Fiscal Year commencing July 1, 2010 and ending June 30, 2011) and the levy of such assessments are proposed to take effect the first day of the first quarter of Fiscal Year 2010-2011 (July 1, 2010) and shall be collected on a quarterly basis thereafter. 3.36.080 Validity of Resolution If any section, sentence, clause or phrase of this resolution is, for any reason, held by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of the remaining portions of this resolution. The City Council of the City of Santa Clarita hereby declares that it would have passed and does hereby pass this section and each sentence, section, clause and phrase hereof, irrespective of the fact that anyone or more sections, sentences, clauses, or phrases be declared invalid or unconstitutional. SECTION 2. This resolution shall be in full force and effect thirty (30) days from its passage and adoption. SECTION 3. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED this day of 2011. MAYOR ATTEST: CITY CLERK DATE: 7 EXHIBIT A SANTA CLARITA TOURISM MARKETING DISTRICT HOTEL TOURISM MARKETING BENEFIT ZONE The following is a list of hotels now operating in the Hotel Tourism Marketing Benefit Zone within the Santa Clarita Tourism Marketing District as existed on the date of this resolution or as modified in subsequent proceedings for inclusion of hotels proposed to operate within the Hotel Tourism Marketing Benefit Zone: Best Western Valencia Inn 27413 Wayne Mills Place (Assessor #--2861071009) Courtyard by Marriott 28523 Westinghouse Place Embassy Suites 28508 Westinghouse Place Holiday Inn Express 27513 Wayne Mills Place Hyatt Regency Valencia 24500 Town Center Drive (Assessor #--2866034080) (Assessor #--2866034083) (Assessor #--2861071008) (Assessor #--2861062020) STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss, CITY OF SANTA CLARITA ) I, Kevin Tonoian, Acting City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the day of 2011, by the following vote: I - AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) CERTIFICATION OF CITY COUNCIL RESOLUTION I, , City Clerk of the City of Santa Clarita, do hereby certify that this is a true and correct copy of the original Resolution 11 - adopted by the City Council of the City of Santa Clarita, California on , 2011, which is now on file in my office. Witness my hand and seal of the City of Santa Clarita, California, this day of 2011. City Clerk By Deputy City Clerk Vol CITY OF SANTA CLARITA TOURISM MARKETING DISTRICT Advisory Board Annual Report Fiscal Year 2011/2012 CITY OF SANTA CLARITA JUNE 14, 2011 �WILLDAN Financial Services extending your PAIVI reach iWWILLDAN I Financial Services Pursuant to the Parking and Business Improvement Area Law of 1989 (Section 36500 et seq. of the Streets and Highways Code of the State of California), the Advisory Board for the Tourism Marketing District ("TMD") which is appointed by the City Council of the City of Santa Clarita, annually reviews and makes appropriate recommendations to the City Council by an Annual Report regarding the use of funds collected through the TMD assessments. The Advisory Board consists of one (1) representative from each of the participating hotels within the Hotel Tourism Marketing Benefit Zone, as well as two (2) City representatives selected by the City Manager. The following table lists the various businesses/entities currently represented on the Advisory Board. Business Name Hotel Physical Address Business/Hotel Owner Address City of Santa Clarita 23920 Valencia Blvd Suite 100 Santa Clarita, CA 91355 City of Santa Clarita 23920 Valencia Blvd Suite 100 Santa Clarita, CA 91355 Best Western Valencia Inn 27413 Wayne Mills Place Ocean Park Hotels Santa Clarita, CA 710 Fiero Lane, Suite 14 San Luis Obispo, CA 93401 Holiday Inn Express 27513 Wayne Mills Place Ocean Park Hotels Santa Clarita, CA 710 Fiero Lane, Suite 14 San Luis Obispo, CA 93401 Courtyard by Marriott 28523 Westinghouse Place Apple REIT Companies, Inc. Santa Clarita, CA 814 East Main Street Richmond, VA 23219 Embassy Suites 28508 Westinghouse Place Island Hospitality Management Santa Clarita, CA 50 Cocoanut Row, Suite 200 Palm Beach, FL 33480 Hyatt Regency 24500 Town Center Drive Noble Investments Santa Clarita, CA Noble Investment Group 1100 Monarch Tower 3424 Peachtree Road Atlanta, Georgia 30326 Santa Clarita Tourism Marketing Districtl 2011/2012 Annual Report In April 2009 the City of Santa Clarita ("City") established the 21 -Point Business Plan for Progress, as a broad economic stimulus plan created to help strengthen the local economy. The 21 -Point Business Plan's goals focus on enhancing local business partnerships, encouraging quality job creation through business retention, expansion and attraction, and increasing retail sales. The formation of Santa Clarita Tourism Marketing District ("District") in May 2010 aligns with the goals and efforts of the 21 -Point Business Plan for Progress. The District was established and is levied pursuant to the Parking and Business Improvement Area Law of 1989, Part 6 of Division 18 of the California Streets and Highways Code (the "1989 Law") and the provisions of the California Constitution Article XIIID ("Proposition 218"). Pursuant to the 1989 Law, a resolution of intention to establish the District was approved on March 23, 2010, and a public hearing, which was duly noticed, was held on May 11, 2010. Following the public hearing the City Council determined that majority protest regarding the formation of the District and the proposed assessments did not exist (no protests were submitted) and subsequently on May 25, 2010 the City Council adopted Ordinance No. 10-4 establishing the Tourism Marketing District ("TMD" or "District') and the Hotel Tourism Marketing Benefit Zone therein ("Benefit Zone"). This report prepared on behalf of the Advisory Board, provides an overall description of the proposed improvements and activities to be funded by the assessments, the estimated annual budget of expenses, the method of assessment and estimated revenues for Fiscal Year 2012 (commencing July 1, 2011 and ending June 30, 2012). Santa Clarita Tourism Marketing District 12011/2012 Annual Report 12 WILLDAN I The Tourism Marketing District funds various services and activities which confer special benefit to the businesses within the Hotel Tourism Marketing Benefit Zone of the District. These services include, but are not limited to: • Promotion of City of Santa Clarita through financial support of key regional and national events that support tourism; • Development and implementation of destination marketing strategy and promotion designed to increase visitor attraction to City of Santa Clarita; • Development and undertaking of advertisement and public relations program focused on business and leisure travel; • Support and funding of the Tourism Trolley Route program; and • Attendance at key meeting and consumer trade shows. Programs and advertising opportunities that have been possible in Fiscal Year 2010/2011 as a result of the establishment of the TMD include inclusion in regional and national publications with destination features on Santa Clarita including: • Southwest Airlines Spirit Magazine • US Airways magazine • Sports Destination Management Magazine • Sports Events Magazine • Large poster AD placements at key areas of Burbank Airport promoting Santa Clarita as a key destination to visit and as a City that offers numerous business incentives. Additional programs for our visitors include: • The summer Trolley program • Data research identifying our core tourists Assessment fees are dedicated to securing visitors and room nights through a mix of marketing programs, projects and activities, including: marketing promotion, advertising press and/or public relations, new product development, prospective marketing and visitor services, marketing research, partnership marketing and special events promotion. From amateur events to regional and national championships, Santa Clarita has become a premier sporting destination. Sport Tourism is the fastest growing sector in the global travel industry and having recognized that, the City of Santa Clarita now has established funding available to bring more sporting events to town. Events that Santa Clarita is able to pursue as a direct result of the established district include the return of the Amgen Tour of California and the award winning bid to host the United Soccer League Women's League Championship Games. Santa Clarita Tourism Marketing District 12011/2012 Annual Report WILLDAN I Financial Services The boundaries of the Tourist Marketing District includes all real property within the City of Santa Clarita; and within the TMD a Hotel Tourism Marketing Benefit Zone was established by Ordinance No. 10-4 that included the five (5) hotel properties identified below: Property Name Assessor's Parcel Property/Business (Hotel/Business Name) Number Reference Physical Address Hyatt Regency 2861-062-020 24500 Town Center Drive Santa Clarita, CA Holiday Inn Express 2861-071-008 27513 Wayne Mills Place Santa Clarita, CA Best Western Valencia Inn 2861-071-009 27413 Wayne Mills Place Santa Clarita, CA Courtyard by Marriott 2866-034-080 28523 Westinghouse Place Santa Clarita, CA Embassy Suites 2866-034-083 28508 Westinghouse PlaceSanta Clarita, CA For Fiscal Year 2011/2012, no additional property inclusions or modifications to the existing Benefit Zone or District boundaries are proposed. The five (5) hotel properties identified above comprise the entire Benefit Zone for Fiscal Year 2011/2012 and are proposed to be assessed in accordance with the System of Assessment (Methodology) established by ordinance. Santa Clarita Tourism Marketing District) 2011/2012 Annual Report �J WILLDAN I Financial services Santa Clarita Tourism Marketing District ('7111 201112012 Budget The estimated Fiscal Year 2011/2012 assessment revenue is approximately $380,000 based on the average receipts received by the five (5) hotel properties from July 2010 to March 2011. All services and improvements provided by the District will be fully funded from the assessments, no additional contributions from other sources are anticipated to be received. Santa Clarita Tourism Marketing District 12011/2012 Annual Report FY 11.12 Percent of Account Codes Account Title and Detail Budget Expenses Estimated Expense (Fiscal Year 201112012) District Administration 1. Indirect Costs & Personnel ($61,484) 13.00% 2. Professional Services (Preparation of Report & Documents) (8,500) 1.80% Sub -total District Administration $69,984 14.80% 11305 5101.004 Printing 1. Promotional Materials ($15,000) 3.17% 2. Brochures (10,000) 2.11% 3. Maps (8,000) 1.69% 4. Visitor Guide 12,000 2.54% Sub -total Printing $45,000 9.51% 11305 5161.001 Contractual Services 1. Visitor Attraction Technology ($10,000) 2.11% 2. Six Flags Marketing (30,000) 6.34% 3. Photography 20,000 4.23% Sub -total Contractual Services $60,000 12.69% 11305 5161.002 Professional Services 1.Graphic Design ($15,000) 3.17% 2. Major Event Attraction (100,000) 21.14% 3. Event Incubator (45,000) 9.51% Sub -total Professional Services $160,000 33.83% 11305 5161.004 Advertising 1.MarketingCampaign$( 45,000) 9.51% Sub -total Advertising $45,000 9.51% 11305 5161.005 Promotion & Publicity 1. HSMAI ($12,000) 2.54% 2. Promotional material/brochure inserts (33,000) 6.98% 3. Tourism Trolley Route (48,000) 10.15% Sub -total Promotion & Publicity $93,000 19.66% Total Estimated Expenditures (Fiscal Year 201112012) (472,984) 100.00% Estimated Revenues (Fiscal Year 201112012) Estimated Fund Balance from Fiscal Year 2010/2011 $115,000 Assessment Revenues (Fiscal Year 201112012)` 380,000 Total Estimated Revenues (Fiscal Year 201112012) $495,000 Estimated Ending Fund Balance (Fiscal Year 2 01 112 01 2) $22,016 (Contingency/Operating Reserve) The estimated Fiscal Year 2011/2012 assessment revenue is approximately $380,000 based on the average receipts received by the five (5) hotel properties from July 2010 to March 2011. All services and improvements provided by the District will be fully funded from the assessments, no additional contributions from other sources are anticipated to be received. Santa Clarita Tourism Marketing District 12011/2012 Annual Report WILLDAN In accordance with Ordinance No. 10-4 and Chapter 3.36 of Title 3 of the Santa Clarita Municipal Code, only properties designated as hotels and included within the District's Hotel Tourism Marketing Benefit Zone will be assessed. "Hotel" shall mean any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients, including but not limited to for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof, duplex, triplex, single family dwelling units except any private dwelling house or other individually owned single-family dwelling rented only infrequently and incidental to normal occupancy or any timeshare as set out in Revenue and Taxation Code Section 7280; provided, that the burden of establishing that the facility is not a hotel shall be on the owner or operator thereof. The proposed system of assessment for the District is designed to generate revenue from hotels in the City to provide a method of funding public programs and activities that will promote the City and hotels as a tourist destination. The City's hotels comprise the Hotel Tourism Marketing Benefit Zone and are the only business proposed to be assessed. The 2011/2012 fiscal year annual assessments to be levied against hotels within the Benefit Zone are based on the benefits they derive from the program of activities. Businesses located outside the Benefit Zone (i.e., all non -hotel businesses) will not be assessed as they derive only, at most, an indirect benefit from the program of activities. In accordance with Ordinance No. 10-4, in addition to any assessments, fees, charges or taxes imposed otherwise in the City, the City Council proposes to levy assessments for fiscal year 2011/2012 against businesses in the Benefit Zone for the purpose of funding the programs, activities and services that will promote the City and hotels as a tourist destination. Each business in the Benefit Zone shall pay an assessment of 2% of total room rents charged and received from transient hotel guests who do not make the hotel their principal place of residence. These assessments shall be due and payable and shall be paid at the same time and in the same manner that the transient occupancy tax is due and payable and shall be subject to the same penalties and interest for nonpayment. All properties included in the Benefit Zone for fiscal year 2011/2012 will be assessed two (2%) percent of the total room rents charged and received from transient hotel guests. Any newly established hotels shall commence immediately upon the first day of operation and following the public hearing conducted for inclusion into the District. Santa Clarita Tourism Marketing District) 2011/2012 Annual Report /7 /e | - k� ■■! �4k /e