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Town Council approves TBID

July 25, 2013

Wood, Bacon vote ‘no’ in split vote

With a potential infusion of $4.7 million a year into the town’s tourism quiver for the next five years, the Mammoth Lakes Town Council this past week approved the creation of a Tourism Business Improvement District.

The vote, taken at the end of a long council meeting on Wednesday, July 24, was 3-2, with both Mayor Rick Wood and council member Jo Bacon voting against.

Voting in favor of the TBID were council members John Eastman, Matthew Lehman, and Michael Raimondo.

The TBID will take effect on Sept. 1, according to Mammoth Lakes Tourism Director John Urdi.

Wood, in remarks before the meeting, said the TBID proposal was too vague, and much too reminiscent of other Mammoth revenue schemes, such as the Terry Ballas/airport condo development proposal that landed Mammoth in court and on the brink of financial insolvency—a case that was settled last year to the tune of $2 million a year.

Wood cited other past efforts, too, including the failed attempt to declare much of the residential core areas of town as “blight” and open for redevelopment, and the Intrawest development, which he said failed in its efforts to “raise all boats with the tide.”

After hearing from many of his clients along Main Street and Old Mammoth Road—Wood is a longtime local attorney—Wood said he did not perceive universal support of the measure.

Moreover, he said behind-the-scenes negotiations, primarily with Mammoth Mountain Ski Area, failed to produce any meaningful compromises, primarily in the area of the ski area’s commitment—or lack thereof—to keep its own marketing budget intact.

“This doesn’t feel balanced to me,” he said in an interview before the meeting. “My intuitive sense is that the plan isn’t right. The concept is good, and I was supportive of it initially. But the plan is flawed.”

Lehman, first to speak among the council members during deliberations, said he was “very supportive” of the TBID.

“I’ve never been a fan of taxes,” he said. “But in this situation, there is enough detail that has been laid out to support the idea of growing out of a very difficult situation.”

Longtime council member Eastman also voiced his strong support of the measure in council deliberations, as did Raimondo.

“We’ve got to drive more people to town,” Raimondo said.

Already on board in support of the TBID was the Mammoth Chamber of Commerce, whose president, Jack Copeland, already was on the record, saying,

“We support business growth,” he said in a letter to the council in June. “We need to increase our marketing commitment in order to sustain and grow our position in the skiing and mountain resort world.”

The TBID, technically a self-imposed assessment and not a tax, would include all restaurant, retail and lodging businesses within the town limits, plus Mammoth Mountain Ski Area.

Rusty Gregory, the CEO if the ski area, was in the audience during the deliberations, as were a number of other MMSA executives.

Under the plan, which would extend for five years, lodging would contribute one percent of gross room revenue to the TBID, which in turn would fund Mammoth Lakes Tourism’s efforts in marketing and air service subsidy costs.

Most retail stores within the district would contribute 1.5 percent; the ski area would contribute 2 percent of lift ticket and ski school sales, and 1.5 percent of equipment rentals and retail revenues.

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

Businesses with less than $50,000 in annual revenue would pay a flat fee of $50 a year.

By far 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.

Much of the controversy surrounding the TBID proposal had to do with whether the TBID was an assessment or a tax—a wolf in sheep’s clothing, as it were.

Wood, for example, consistently had referred to it as a “tax,” as outlined in remarks he made in an interview in June.

“It’s a tax,” he said. “We call it an assessment; we call it self-imposed. But we’re getting it from the consumer.”

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.

Even so, Urdi himself conceded Mammoth’s model “is an anomaly” because the Mammoth TBID extends beyond the lodging industry and could include just about anything.

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