Agenda - Economic Development Authority - 08/08/2024

Home

Economic Development Authority (EDA) Meeting Date: 08/08/2024 Primary Strategic Plan Initiative: Promote economic growth and development. 4. 2. Title: Consider Recommendation to Implement Lodging Tax and Membership with Twin Cities Gateway Visitors Bureau Purpose/Background: The purpose of this case is to consider implementing a lodging tax and becoming a member of the Twin Cities Gateway Visitors Bureau. Staff was approached by the Twin Cities Gateway Visitor Bureau in November of 2023. Al Stauffacher, the Director of the Visitor Bureau, outlined the benefits of the bureau to the community and hotels. Benefits include bringing lodging to participating hotels for area events / Venues (National Sports Center, athletic tournaments, conventions), marketing attractions within the community and financial support for marketing of community events (Happy Days, Draw Concert Series). After the meeting with Mr. Stauffacher, Staff engaged Comfort Suites and Hilton Home 2 Suites and asked them if they would have any interest in this program. Both hotels and their management teams met with Twin Cities Gateway and after internal discussions, notified the City in July that they were both supportive of implementing a 3% lodging tax and to be a part of the Twin Cities Gateway Visitors Bureau. Once there was "buy in" from our local hotels, staff decided to bring this forward for discussion to the EDA and ultimately the City Council. Currently, Anoka, Arden Hills, Coon Rapids, Fridley, Ham Lake, Lino Lakes, Mounds View, New Brighton and Shoreview are part of the Twin Cities Gateway Visitors Bureau. Staff reached out to the City Administrator of Lino Lakes and she was very complementary of the program and Al Stauffacher. There is no cost to this program aside from the administration of the collection of 3% lodging fees from the hotels and forwarding them to the Twin Cities Gateway. The City keeps 5% (estimated to be $6,900) and sends 95% of the fees collected back to the bureau to fund their operations. The 5% can be used for administration costs or wherever the City chooses. For example, Fridley dedicates the administrative fee to tourism -related activities. Implementation of this program involves the City adopting a resolution to approve a 3% lodging tax and simply forwarding this to the State of Minnesota to be processed. Typically, a January 1 start date is used. The Twin Cities Gateway Visitor Bureau will help the City through this process of getting everything set up. The City will ultimately enter into a contract with the Twin City Gateway Visitor Bureau and this contract will include a 1 year's notice to opt out if the City no longer wishes to participate. Once the City becomes a member they will receive an additional $5,000 grant from the Visitor Bureau to be spent on marketing and administration for local events like Happy Days, or potentially, the Draw Concert Series. In year two, this amount is estimated to rise to approximately $18,000 annually. Notification: None required Time Frame/Observations/Alternatives: Staff wants to make it clear that this was not originally a Staff -initiated idea. This opportunity was presented to the City in November of 2023 and the City simply asked its hotels if they would have interest. Both hotels are very interested and believe that it will help them with increased occupancy rates and are supportive of the 3% lodging tax being implemented for each room booked. Upon reviewing all the information, meeting with Al Stauffacher, discussing this with the City Administrator of Lino Lakes, and seeing support for this program by our two hotels, if the City joins TC Gateway it will receive a seat on the board. Staff sees the potential benefits of this program. Al Stauffacher, Director of the Twin Cities Gateway Visitors Bureau, will be in attendance to