Item 30 - Public Hearing - Resolution to Renew Santa Ana Tourism Marketing District (SATMD)

Home Browse Search

Resolution Declaring Results of Majority Protest Proceedings to Renew the SATMD July 1, 2025 Page 4 5 1 5 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. 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 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%). Any increase must address specific needs, such as tourism recovery or expanding marketing efforts, and can later be reduced, though not below 2%. This flexible funding structure allows Santa Ana hoteliers to respond strategically to changing market conditions. Decisions on rate changes are guided by the Travel Santa Ana Board, considering factors like occupancy and economic impact. Regular monthly reporting ensures transparency, and the TMD hoteliers support the structured increase approach, which aligns with practices in about 43% of California Tourism Marketing Districts. Transient Occupancy Tax Rate in Comparison (highest to lowest) City TOT Additional Assessments Total Assessment Anaheim 15%2%17% Garden Grove 14.5%2.5%17% Long Beach 12%3%15% Buena Park 12%2%14% Laguna Beach 12%2%14%