Del Mar council favors renewing tourism district, but differs over length of contract

With Del Mar’s Tourism Business Improvement District set to expire later this year, the Del Mar City Council on July 6 unanimously declared its intention to renew the district.

“I think it’s a good thing,” said Councilman Don Mosier. “We’ve got all the hotels in town working together. They know each other. There may be some general competition, but everybody’s getting more customers, more heads in beds.”

After its annual report to the council last month, the district proposed a new management plan during the July 6 meeting.

The council authorized the formation of the district in September 2010, allowing hotel operators to charge guests a 1 percent fee that’s used to attract more visitors to the city. Five years later, the tourism district is set to automatically expire at the end of September.

If renewed, city staff estimates the district would generate approximately $205,000 annually. The city would receive a fee of 1 percent of the amount collected to cover its administration costs — approximately $2,050 per year.

A representative from each of Del Mar’s hotels, motels and inns — Del Mar Inn/Clarion, Del Mar Motel on the Beach, Hotel Indigo, L’Auberge Del Mar, Les Artistes Inn and Secret Garden Inn — make up Visit Del Mar, the nonprofit created by the district to manage the assessments. Visit Del Mar was incorporated in 2010 and received tax-exempt status in March 2011.

General managers of five of the hotels, as well as L’Auberge Del Mar’s director of sales and marketing, sit on the board. The board meets monthly at one of the hotels.

To save on time and money, the proposed management plan would renew the district for 10 years from Oct. 1, 2015 through Sept. 30, 2025.

Shaun Beucler, general manager of L’Auberge Del Mar, said it took the district about six months to prepare for the renewal process. Richard Earnest, a former Del Mar mayor who now serves as board president of the Del Mar Village Association, added that it cost the district about $35,000 to prepare for the renewal process, which covers administrative and legal costs.

There are 92 tourism business improvement districts in the state and similar districts in nine states across the county, explained John Lambeth of Civitas Advisors. He pointed out that once a district is established, it is often renewed for 10 years. San Francisco renewed its district for 15 years, Anaheim renewed its district for 30 years and San Diego renewed its district for 40 years, he said.

“We are seeing this trend toward longer terms in the district, and that really is because of the sense that if it’s up, if it’s running, if it’s working, to give it a longer term,” Lambeth said. “You don’t have to go through the renewal effort again.”

All of the council members supported the idea of renewing the district, but differed on the length of the renewal.

Councilman Terry Sinnott said he was in favor of renewing the district, but was leaning toward five years. He suggested the district budget more money toward marketing analysis.

“It all seems like it’s working, but it’s a little fuzzy,” he said.

Councilman Dwight Worden suggested renewing the district for two years instead of 10 years and also setting specific goals.

“It looks good this year, but you’ve got a four-year track record that doesn’t look so good,” Worden said. “And to renew for 10 years feels uncomfortable to me, particularly given that once you renew, the ability of the city to control is pretty limited.”

Agreeing with Worden, Mayor Al Corti preferred a much shorter renewal period and wanted to see better metrics.

If approved, the proposed plan would also establish the DMVA as the district’s owners association. The assessed hotels would be part of a committee within the DMVA. Five people would serve on the committee, including three hoteliers and potentially two DMVA board members.

“The current board feels that partnering with the DMVA definitely allows for more productivity, and honestly, more partnership in all things downtown,” Beucler said. “We feel that this initiative, in moving forward with this governance, will allow us to even drive better results.”

Earnest agreed.

“We can leverage this better through DMVA because we can factor some of the things we’re already doing that really are connected with what the hotels are doing,” he said. “We can make the programs better, we can make the programs more robust with this kind of money, and we can do more programming besides what we’re able to do today. So everybody wins with that kind of leverage.”

The council will hear public testimony regarding the potential renewal of the district on July 20, during the next council meeting. The council is expected to make its decision during the Sept. 8 meeting.