Item 23 - Resolution of Intention to Renew the Santa Ana Tourism Marketing District

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Resolution of Intention to Re-establish SATMD April 15, 2025 Page 4 4 9 2 3 •They allow for a wide range of services, including: destination marketing, tourism promotion, and sales lead generation •They are designed, created, and governed by those who will pay the assessment •They provide a stable funding source for tourism promotion In California, TMDs are primarily formed pursuant to the Property and Business Improvement District Law of 1994 (94 Law). This law allows for the creation of a special benefit assessment districts to raise funds within a specific geographic area. The key difference between TMDs and other special benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the TMD. MANAGEMENT DISTRICT PLAN The Management District Plan (Exhibit 2) includes the proposed boundary of the SATMD, a service plan and budget, and a proposed means of governance. The SATMD will include all lodging businesses with seventy (70) rooms or more, existing and in the future, available for public occupancy within the boundaries of the City of Santa Ana. The renewed SATMD will have a ten (10) year life, beginning January 1, 2026, or as soon as possible thereafter, and ending ten (10) years from its start date. After ten (10) years, the SATMD may be renewed pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq. (94 Law) if assessed business owners support continuing the SATMD programs. The annual assessment rate is two percent (2%) of gross short-term sleeping room rental revenue. Every two (2) years during the operation of the SATMD, the assessment rate may be increased by the TSA Board to a maximum rate of four percent (4%) of gross short-term sleeping room rental revenue. If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of two percent (2%) of gross short-term sleeping room rental revenue. The maximum increase or decrease in any two-year period shall be one-half of one percent (0.5%). Once per year beginning on the anniversary of SATMD establishment, there is a thirty (30) day period in which business owners paying fifty percent (50%) or more of the assessment may protest and begin proceedings to terminate the SATMD. The City of Santa Ana has been and will continue to be responsible for collecting the assessment on a monthly basis (including any delinquencies, overdue charges, and interest) from each assessed lodging business located in the boundaries of the SATMD. The City then disburses the assessment amounts, minus the two percent (2%) administrative fee to Travel Santa Ana. Since inception of the first SATMD, the City has collected $114,114 in administration fees. Each year, Travel Santa Ana presents an annual report to City Council identifying the activities of the Tourism Marketing District. The 2024 Travel Santa Ana Annual Report has been attached as a Receive and File.