Local control: North Lake Tahoe Tourism Business Improvement District receives green light
The TBID, or Tourism Business Improvement District, is something that’s been discussed for years.
And now, it’s finally a reality.
The Placer County Board of Supervisors at its Tuesday meeting unanimously approved of the formation of the North Lake Tahoe Tourism Business Improvement District.
Tuesday’s meeting represented the final public hearing in the formation of the tourism business improvement district, a process that started Dec. 15, and will result in the first assessments in July.
“This is something that the community has been talking about for many years,” said Placer County Principal Management Analyst Erin Casey, who led the presentation to the Board of Supervisors.
The North Lake Tahoe Resort Association — formed in 1995 to implement a destination marketing program, recommend infrastructure and to make recommendations on transportation investments in the area — will oversee the district and how funds are allocated.
Under the new district, which proponents say gives more local control of funding, the lodging sector will be assessed 2%, except at Squaw Valley Alpine Meadows and Northstar, which will be assessed at 1% due to already having their own assessment districts. Other sectors like retailers, restaurants, and outdoor activity providers will be assessed at 1% on revenues greater than $150,000. Businesses earning less than $150,000 will be subject to a flat fee.
The formation of the tourism improvement district is anticipated to generate $6.1 million annually — of that roughly $3.15 million will be used primarily for marketing, promotions, and special events.
“That is roughly the amount of money that the resort association uses today to fund its marketing program,” said Casey on the estimated $3.15 million for marketing and promotions. “While this is a large chunk of the total pie, it is not an increase over the marketing that the organization currently does in the community. Additional services, however, will be provided that they don’t provide today and will be funded by the TBID.”
Funds will also be directed toward business advocacy and support, economic development and transportation, and sustainability and mitigation of tourism impacts.
Of the $6.1 million projected in TBID revenue each year, lodging is estimated to generate $2.7 million; food and beverage, and retail will account for $2.3 million; and $1 million will come from recreation and activity providers.
Tourism Business Improvement Districts often assess only on the lodging sector, but with an estimated 42% of visitors to North Lake Tahoe driving in for the day, spreading assessments across a swath of sectors gives the county a greater ability to pull in dollars from day visitors.
Full-time residents in the area, according to the North Lake Tahoe Resort Association, will end up contributing a projected $30 to $40 annually.
TRANSIENT OCCUPANCEY TAX
Placer County currently has a transient occupancy tax rate of 8%. In the North Lake Tahoe area voters passed an additional 2% increase in 1996 and reauthorized the tax in 2002 and 2012.
“Those additional funds are invested specifically in eastern Placer County only and have supported the types of services around trails, expanded TART service, visitor-serving facilities like museums, community spaces, and then recreation including parks and park facilities,” said Casey.
The 2% increase expires in 2022, and Casey said the county will be working with voters to extend the tax. With the additional 1% increase due to the district’s assessment, the sales tax rate in the North Lake Tahoe area would be equivalent to 8.25%, which is equal to Truckee and less than in Reno.
Additionally, the forming of the North Lake Tahoe Tourism Business Improvement District frees up roughly $4.1 million in transient occupancy tax, which will be used in eastern Placer Country to support workforce housing, traffic mitigation, and transportation services.
“The TBID not only creates an avenue for all businesses to participate in local improvement projects, but allows for a broader range of investments back into our community,” said District 5 Supervisor Cindy Gustafson, in a release from Placer County. “From addressing traffic, to workforce housing, to the most pressing issues affecting our community, I am confident we will look back at this decision as the start of a more economically viable, collaborative and improved North Tahoe.”
Also passing at the Board of Supervisors meeting was a proposal to spend $1.1 million of those freed up dollars on projects this summer that include $450,000 for a microtransit service, $150,000 for expanded park and ride options, $150,000 for enhanced litter and trash services, $140,000 for pedestrian crossing guards during peak times of the season, $150,000 for a temporary road signal at Grove Street in Tahoe City, $15,000 for signage, and $50,000 for expanded snow removal services on trails.
While several members of the community that showed up to the meeting or called in were in support of the formation of the Tourism Business Improvement District, not all viewed it as a positive for the area.
Henry Stockman, who operates short-term vacation rentals in North Lake Tahoe, argued that small lodging operators would be hard pressed to absorb an additional 2% cost, and that it would hurt them competitively to pass the impact onto customers. Others, including Stockman, said that spending money on marketing does little to help businesses like his, which he said already rely on websites like Airbnb for exposure.
Furthermore, questions were raised about the 50% plus one weighted vote from local businesses, which propelled the formation of the district forward.
North Lake Tahoe Resort Association Director of Global Communications & Public Relations Liz Bowling said the area’s businesses were separated into categories of lodging, restaurants, retailers, and activity providers as part of establishing a weighted vote, and that larger businesses, like mountain resorts, had more voting power.
“Their weighted vote is bigger because they are adding more dollars,” said Bowling.
In eastern Placer County there are roughly 5,000 businesses, according to the North Lake Tahoe Resort Association, but the vast majority of those are short-term rentals. There are roughly 800 businesses in the area, according to Bowling, that aren’t part of the lodging sector.
Bowling also added that the North Lake Tahoe Resort Association continued to receive petitions in favor of forming the TBID after reaching the 51% plateau in December. The amount of businesses that protested the district’s formation, according to Bowling, was less than 1%.
North Lake Tahoe Resort Association Board Member Samir Tuma stated that he and other board members personally spoke with hundreds of businesses within the district. Tuma added that the Board of Supervisors’ decision to allocate eastern Placer County with $4.1 million in transient occupancy tax “is giving the local community a tremendous level of control — probably unprecedented in California.”
The North Lake Tahoe Tourism Improvement District is set to form in July, and will have oversight from a locally comprised committee, that will include 16 members. Seats have already been assigned to the larger players in the area such as Squaw Valley Alpine Meadows, Northstar California Resort, Homewood Mountain Resort, Placer County Board of Supervisors, Squaw Valley Business Association, Tahoe City Downtown Association, North Tahoe Business Association, and several others. Additionally there is a pair of at-large seats, and others for representatives from the food and beverage and recreation sectors.
The district will also have a pair of advisory committees that will aid the board in its decision making.
The district will last five years under the current proposal, and then can be reestablished for another 10 years. More than 100 tourism business improvement districts are in place in California.
Justin Scacco is a reporter for the Sierra Sun, a sister publication of The Union.
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