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TBID process on the fast-track

May 9, 2013

 

Collections could begin Aug. 1

The push to establish a so-called “Tourism Business Investment District” (TBID) hit the road in earnest this week, according to John Urdi, the leader of Mammoth Lakes Tourism.

Beginning with an Open House scheduled for Thursday, May 9, at Rafters on Old Mammoth Road, the TBID’s six-step march forward could result in $4.7 million in annual collections beginning as early as Aug. 1.

To clear the steps, the proposal would have to pass by the business community that is affected by an assessment, then get past a public comment period and, finally, Town Council approval in July.

So far, Urdi said the business community supports the measure, but a crack in the consensus opened last week at the Town Council’s May 1 meeting. There, Grumpy’s owner Greg Simas delivered a series of sharp remarks.

“Right now is not the right time for more taxes,” said Simas, a former chairman of the old Tourism and Recreation Commission.

“If it is the right time for taxes, should we not let the whole community vote on it and not bring it forward as a sales tax increase?”

Technically, however, a TBID is not a tax per se. TBIDs are an evolution of the traditional Business Improvement District.

The first TBID was formed in West Hollywood in 1992. Since then, over 70 California destinations have followed suit. In recent years, other states, such as Washington, Montana, and Texas, have begun adopting the California model.

Mammoth brings some new twists to the plan, however, by including restaurants, retail, and Mammoth Mountain Ski Area, along with lodging.

Under the plan, which would extend for five years beginning Aug. 1, lodging would contribute one percent of gross room revenue to the TBID. Most retail stores within the district would contribute 1.5 percent; the ski area would contribute two percent of lift ticket and ski school sales, and 1.5 percent of equipment rentals and retail revenues.

Restaurants that generate less than $150,000 in annual revenue or which do not receive at least 50 percent of their annual revenue from visitors as determined by credit card receipts, would pay $500 a year.

The proposed TBID would raise an estimated $4.7 million, according to the Mammoth Lakes TBID website that has been specifically set up to answer questions.

The biggest contributor would be Mammoth Mountain Ski Area, with an estimated annual contribution of $1.8 million. Retail businesses would contribute $1.35 million, lodging would chip in $800,000, and restaurants would contribute $750,000.

Of that total, $2.35 million would go toward sales, marketing and public relations; $2,012,000 would go toward air service subsidy marketing;  $141,000 would go toward administration, $94,000 would go to collection costs and another $94,000 would go to a “contingency” fund.

Simas, who after his remarks huddled with Urdi in the hallway outside the Council Chambers, said many of the business owners in town do not know the details about the TBID proposal.

“In the past we’ve done a much better job of that outreach, letting people know what’s going on,” Simas said.

“John’s making steps in the right direction, but even if it takes someone from Mammoth Lakes Tourism to go into every single business, and let them know what they’re in for, I think it’s very important to get the buy-in that’s going to be necessary, when this passes, to make it successful.”

Urdi said in a separate interview after Simas’ presentation that there is a general misunderstanding of the TBID among some business owners, and that it is a result of legacy issues.

“I met with a local business leader the other day,” Urdi said, “and he recognizes there are a lot of people in town who still feel leery about going all-in with the Tourism Department, because in the past, it hasn’t been trusted. 

“Over the past three years, and as of July 1, we’ll have been in business three years, and with the exception of last year’s poor winter, during one of the of the worst recessions we’ve had, we’ve seen TOT (transient occupancy taxes) go up, so obviously we’re providing a service that appears to working.

“I think Greg is cautiously pessimistic,” Urdi said, “but I’m trying to get him to be optimistic about what we’re doing and how this is going to affect the draw that we have to bring people here.”

Urdi insisted Simas was wrong in characterizing the TBID as a tax.

“This is definitely not a tax; it’s an assessment that’s $1.50 for every $100 on a tab,” he said. “At McDonald’s last weekend, I went through the drive-through with my kids and the bill was 20 bucks. Twenty bucks at a 1.5 percent is 30 cents. I don’t think that’s anything that will scare people away from coming back and enjoying our area.” 

Teri Stehlik, who with her husband manages the Seasons 4 Condos on Lake Mary Road, countered Simas’ remarks by saying it was time that other businesses that profit from tourism step up to the plate.

“Lodging has been supporting the lion’s share of this community forever, and any time there’s a raise in the TOT tax, they’re the ones who take the brunt of that.

“Seventy-three percent of our budget comes from TOT taxes,” she said, “and it’s time for this entire community to realize where their dollars are coming from, and step in and help.”

As for businesses claiming ignorance of the proposal, Stehlik said she was puzzled.

“Just to let the public know,” she said, “there has been a lot of information in the newspaper; John has open-door policy if you have any questions, so please give John a call and he’d be happy to meet with you.

“And that’s another reason we’re suggesting an open house, so that a lot of these questions can be answered for people who haven’t followed the newspaper or radio or whatever media is out there for our community.”

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