Draft narrative effective January 1, 2013:
As a result of diminishing public resources available for effective and competitive destination marketing, local lodging industry leadership began discussing alternative funding sources and available options in 2003. A working group comprised of lodging industry representatives held dozens of meetings with proposed assessed businesses, stakeholder groups and interested parties. On May 8, 2007, at the request of a working group comprised of lodging industry representatives, the San Diego City Council (City Council) adopted the San Diego Tourism Marketing District Procedural Ordinance (SDMC Section 61.2501 et seq.) (Procedural Ordinance), which created a process for creating a tourism marketing district. Subsequently, on August 1, 2011, the City Council adopted amendments to the Procedural Ordinance specifying, among other things, a process by which such a district may be renewed. These amendments permit a renewal term up to forty (40) years.
The San Diego Tourism Marketing District (District) was established pursuant to the Procedural Ordinance effective January 1, 2008 for an initial five-year term that ended on December 31, 2012. Developed by San Diego lodging businesses, the District is a benefit assessment district created to fully or partially fund marketing and sales efforts that directly benefit San Diego lodging businesses. On November 26th, 2012 the City Council renewed the District for a period of thirty-nine and one-half (39.5) additional years. The approved District Management Plan sets forth a plan for District activities and assessments during that renewal period.
The boundaries of the District are the same as the boundaries of the City of San Diego.
Funding Source Entirely from Assessed Lodging Businesses:
In response to the 2010 Proposition 26 legislation, the renewed district consists of two (2) benefit categories in the District. Each benefit category is designed so that the activities provided in connection with that category will confer exclusive privileges and a specific benefit directly to assessed businesses (current and future). These assessed businesses are defined in Appendix 1 of the District Management Plan: Lodging businesses benefitting under category A include all lodging businesses in the District with thirty (30) or more rooms. Lodging businesses benefitting under category B include all lodging businesses in the District, regardless of size.
Assessments and Benefit Categories:
All assessment rates are based on the privileges directly conferred and specific benefit directly received by assessed businesses from the activities provided within each category and are levied on “Assessable Rent” which is based on gross room rental revenue less exempt revenues, of those benefitting businesses. Annual assessment rates are as follows:
- Benefit Category A Rate: 1.45% – applied to Assessable Rent of qualifying
- Benefit Category B Rate: 0.55% – applied to Assessable Rent of qualifying lodging businesses.
In summary, lodging businesses with 30 or more rooms will be assessed at a total rate
of 2% (Category A + Category B). All other lodging businesses will be assessed at a total rate of 0.55% (Category B only). Pursuant to this Plan, assessable Rent does not include revenue from stays where:
- the transient has exercised occupancy or was entitled to occupancy for one
month or more; or
- the total space rental charge is twenty-five dollars ($25.00) a day or less, or
the accommodations rented are in a dormitory and the total space
rental charge for each transient is twenty-five dollars ($25.00) a day or
- the transient is by treaty, or federal law or state law exempt from payment of
transient occupancy taxes; or
- rent is directly paid by the United States Government or the State of California
or their respective instrumentalities. Assessments will be authorized by the City Council to be levied for the term of the District.