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HomeMy WebLinkAbout15 - Public Meeting on NBTBID(9) TO: CyIWKS]9 Agenda Item No. 15 January 14, 2014 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, City Manager 949 - 644 -3002, dkiff @newportbeachca.gov PREPARED BY: Tara Finnigan APPROVED: �l✓V\� TITLE: Public Meeting on the Renewal of the Newport Beach Tourism Business Improvement District ABSTRACT: The Newport Beach Tourism Business Improvement District (NBTBID) Owner's Association is requesting the renewal of the NBTBID for a 10 -year term, at an assessment rate of 3% and with the addition of the Island Hotel Newport Beach. RECOMMENDATIONS: Hold a public meeting on the proposed renewal of the NBTBID. FUNDING REQUIREMENTS: The current adopted budget includes sufficient funding for this item. The City of Newport Beach collects the member assessments on behalf of the NBTBID and retains 0.25% of 1% of the total assessments collected to reimburse the City for administrative costs associated with the NBTBID. DISCUSSION: Background The NBTBID was formed by the City of Newport Beach (City) on April 28, 2009, pursuant to the Property and Business Improvement District Law of 1994 (the 1994 Law), Streets and Highways Code Sections 36600 et seq. The City Council modified the NBTBID's Management District Plan in April 2012 to add another lodging business, the Resolution No. 2013 — 89, A Resolution of Intention to Renew the Newport Beach Tourism Business Improvement District January 14, 2014 Page 2 Newport Dunes Waterfront Resort and Marina. The NBTBID currently has seven members including the Fairmont Newport Beach, the Hyatt Regency Newport Beach, the Newport Dunes Waterfront Resort and Marina, the Newport Beach Marriott Bayview, the Newport Beach Marriott Hotel & Spa, the Radisson Newport Beach, and the Balboa Bay Club and Resort (a.k.a., Balboa Bay Resort). Under an agreement with the City, Visit Newport Beach, Inc. (VNB) serves as the NBTBID's Owner's Association and oversees its administration and coordinates its marketing and sales activities. VNB works with a committee comprised of representatives from the seven member lodging businesses (the NBTBID committee) to develop the NBTBID work plan and budget. The NBTBID is in the final year of a five - year term and is scheduled to expire on April 28, 2014. NBTBID Renewal As presented during the City Council's November 26, 2013 Study Session, VNB notified the City that the NBTBID's member lodging businesses wish to renew the NBTBID for an additional 10 years, add another member (Island Hotel Newport Beach), and increase the assessment from 2% to 3% of gross short-term room rental revenue. Staff received general direction from the Council to move forward with the NBTBID renewal process, incorporating the proposed changes listed above. In addition, VNB submitted signed petitions from the eight lodging businesses (100% of the proposed assessment) and those are on file with the City Clerk's Office. Renewing the NBTBID involves a three -step process spanning three City Council meetings. The first step was accomplished on December 10, 2013 when the Council adopted Resolution No. 2013 -89, A Resolution of Intention to Renew the Newport Beach Tourism Business Improvement District (staff report included as Attachment A). Pursuant to the California Streets and Highways Code, a copy of the resolution was mailed to every current and proposed member lodging business. The next step in the process is this item (before the Council on January 14, 2014) — to hold a public meeting on the matter to provide an opportunity for public comment. The final step will be for the Council to hold a public hearing on the matter on January 28, 2014 and to adopt a resolution approving the Management District Plan (MDP) for the renewed NBTBID. Management District Plan The proposed MDP (included in Attachment A) contains the following: • The addition of the Island Hotel Newport Beach to the NBTBID (see Section I and Appendix 2); 4 Resolution No. 2013 — 89, A Resolution of Intention to Renew the Newport Beach Tourism Business Improvement District January 14, 2014 Page 3 • An assessment rate of 3% of gross, short -term room rental revenues (see Sections I and V(C)); • A 10 -year term for the NBTBID (See Section 1); • The list of possible NBTBID activities as authorized by the 1994 Act (see Sections I and V(A); • The NBTBID service plan budget (See Sections I and V(A)). As noted in the December 10, 2013 staff report, staff appreciates that the Council would prefer to have both a "clean" version and a redlined version of the MDP that identifies the differences between the attached MDP (dated December 10, 2013) and the last approved NBTBID MDP (April 2012). The formatting changes incorporated by VNB's consultant, combined with content, grammar and punctuation changes made by both staff and the consultant, made the redlined document very difficult to read. Staff asked VNB's consultant to recreate a readable, redlined version of this MDP. Both the consultant and staff attempted to do so, but the document was still illegible. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by: Tara Finnigan Public Information Manager Attachments: A. December 10, 2013 Staff Report 3 ATTACHMENT A 044".CITY OF NEWPORT' BEACH City Council Staff Report Agenda Item No. 5 December 10, 2013 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, City Manager 949- 644 -3002, dkiff @newportbeachca.gov PREPARED BY: Tara Finnigan APPROVED: 0. TITLE: Resolution No. 2013 89, A Resolution of Intention to Renew the Newport Beach Tourism Business Improvement District ABSTRACT: The Newport Beach Tourism Business Improvement District ( NBTBID) Owner's Association is requesting the renewal of the NBTBID for a 10 -year term, at an assessment. rate of 3% and with the addition of the Island Hotel Newport Beach. RECOMMENDATIONS: Approve Resolution No. 2013 — 89, A Resolution of Intention to Renew the Newport Beach Tourism Business Improvement District; and 2. Direct the City Clerk to provide notice of the public meeting and public hearing, as required by the California'Streets and Highways Code. FUNDING REQUIREMENTS: The current adopted budget includes sufficient funding for this item. The City of Newport Beach collects the, member assessments on behalf of the NBTBID and retains 0.25% of I% of the total assessments collected to reimburse the City for .administrative costs associated with the NBTBID. Resolution No. 2013 — 89, A Resolution of Intention to Renew the Newport Beach Tourism Business Improvement District December 10, 2013 Page 2 DISCUSSION: Background The NBTBID was formed by the City of Newport Beach (City) on April 28, 2009, pursuant to the Property and Business Improvement District Law of 1994 (the 1994 Law), Streets and Highways Code Sections 36600 et seq. The City Council modified the NBTBID's Management District Plan in April 2012 to add another lodging business, the Newport Dunes Waterfront Resort and Marina. The NBTBID currently has seven members including the Fairmont Newport Beach, the Hyatt Regency Newport Beach, the Newport Dunes Waterfront Resort and Marina, the Newport Beach Marriott Bayview, the Newport Beach Marriott Hotel & Spa, the Radisson Newport Beach, and the Balboa Bay Club and Resort (a.k.a., Balboa Bay Resort). Under an agreement with the City, Visit Newport Beach, Inc. (VNB) serves as the NBTBID's Owner's Association and oversees its administration and coordinates its marketing and sales activities. VNB works with a committee comprised of representatives from the seven member lodging businesses (the NBTBID committee) to develop the NBTBID work plan and budget. The NBTBID is in the final year of a five - year term and is scheduled to expire on April 28, 2014. NBTBID Renewal As presented during the City Council's November 26 Study Session, VNB notified the City that the NBTBID's member lodging businesses wish to renew the NBTBID for an additional 10 years, add another member (the Island Hotel Newport Beach), and increase the assessment from 2% to 3% of gross short-term room rental revenue. Staff received general direction from the Council to move forward with the NBTBID renewal process, incorporating the proposed changes listed above. Initiating the NBTBID renewal requires the submission of petitions from lodging businesses representing more than 50% of the total annual assessment. VNB has submitted signed petitions from eight lodging businesses (100% of the proposed assessment) and those are on file with the City Clerk's Office. The NBTBID renewal is a three -step process, spanning three City Council meetings. It begins with the proposed Resolution of Intention No. 2013 -89 (Attachment A). If the Council approves the Resolution of Intention, there will be a public meeting on this matter on January 14, 2014. That will be followed by a public hearing on January 28, 2014. Staff will ensure all noticing, as required by the California Streets and Highways Code, is accomplished. 5 Resolution No. 2013 — 89, A Resolution of Intention to Renew the Newport Beach Tourism Business Improvement District December 10, 2013 Page 3 Management District Plan Pursuant to the request from the NBTBID owners' association, staff from the City Attorney's Office and City Manager's Office worked with the consultant retained by VNB to prepare a Management District Plan (MDP) for the renewed NBTBID. The proposed MDP (included as Attachment B) contains the following: • The addition of the Island Hotel Newport Beach to the NBTBID (see Section I and Appendix 2); • An assessment rate of 3% of gross, short-term room rental revenues (see Sections I and V(C)); • A 10 -year term for the NBTBID (See Section 1); • The list of possible NBTBID activities as authorized by the 1994 Act (see Sections 1 and V(A); • The NBTBID service plan budget (See Sections I and V(A)). Staff understands that the Council would prefer to have both a "clean" version and a redlined version of the MDP that identifies the differences between the attached MDP (dated December 10, 2013) and the last approved NBTBID MDP (April 2012). However, the formatting changes incorporated by the consultant, combined with content, grammar and punctuation changes made by both staff and the consultant, made the redlined document very challenging to read. We have asked VNB's consultant to attempt to recreate a redlined version of this MDP — one that is readable. The consultant agreed to do so, but that document was not available for inclusion with this staff report. Related Item — NBTBID Modification It should be noted that a related item, pertaining to the NBTBID's expiration date, is also on the Council's December 10 agenda. As noted during the November 26 Study Session and in the staff report for that item, the 1994 Law does not allow for a tourism business improvement district to be renewed until its existing term is expired. Therefore, it is necessary to shorten the NBTBID's current term from five years to four years and nine months in the Management District Plan in order to immediately begin the NBTBID renewal process. During its November 26 Regular Session, the Council approved Resolution No. 2013 — 87, A Resolution of Intention to Modify the Management District Plan of the Newport Beach Tourism Business Improvement District. Thus, the related item on this evening's agenda is to hold a public meeting on the proposed modification. The final step in the modification will be to hold a public hearing on January 28, 2014. Resolution No. 2013 — 89, A Resolution of Intention to Renew the Newport Beach Tourism Business Improvement District December 10, 2013 Page 4 Cultural Arts Programming Funding Also at the November 26 City Council Study Session, VNB and the City Council discussed financial support for cultural arts in the City. VNB offered $150,000 per year in support of programs ranging from theater to art shows to other performances. This item requires additional research, particularly related to the source and mechanism for the funding, and staff will return to the City Council early next year with a mechanism for implementing VNB's financial support for local arts programs. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by: laac ' Tara Finnigan Public Information Manager Attachments: A. Resolution No. 2013 - 89 B. Management District Plan for Renewed NBTBID Attachment A *;_ •2• 1, WHEREAS, the Property and Business Improvement Law of 1994, Streets and Highways Code Sections 36600 et seq., authorizes cities and counties to establish property and business improvement districts for the purposes of promoting tourism; and WHEREAS, the City Council created the Newport Beach Tourism Business Improvement District (NBTBID) by Resolution No. 2009 -21 on April 28, 2009; and WHEREAS, Visit Newport Beach (VNB) representatives, lodging business owners, and representatives from the City of Newport Beach (City) have met to consider the renewal of the NBTBID; and WHEREAS, Visit Newport Beach has drafted a Management District Plan (MDP) which sets forth the proposed boundary of the NBTBID, a service plan and budget, and a proposed means of governance; and WHEREAS, a majority of the lodging business owners subject to assessment under the NBTBID have petitioned the City Council to renew the NBTBID. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The recitals set forth herein are true and correct. Section 2: The City Council finds that the lodging businesses that will pay more than fifty percent (60 %) of the assessment proposed in the MDP have signed and submitted petitions in support of the renewal of the NBTBID. The City Council accepts the petitions and adopts this resolution of intention to renew the NBTBID and to levy an assessment on certain lodging businesses within the NBTBID boundaries in accordance with the Property and Business Improvement District Law of 1994. Section 3: The City Council finds that the MDP satisfies all requirements of California Streets and Highways Code Section 36622. Section 4: The City Council declares its intention to renew the NBTBID and to levy and collect assessments on lodging businesses within the NBTBID boundaries pursuant to the Property and Business Improvement District Law of 1994. 1 0 Section 5: The boundaries of the NBTBID shall be the boundaries of the City of Newport Beach. Please see the attached map, incorporated herein as Exhibit A. The renewed NBTBID includes eight (8) lodging businesses located within the boundaries of the City of Newport Beach, and other hotels and resorts that may join the NBTBID in the future. The NBTBID shall include the Fairmont Newport Beach, the Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, the Newport Beach Marriott Hotel & Spa, the Radisson Newport Beach, the Balboa Bay Club and Resort (a.k.a., Balboa Bay Resort), the Newport Dunes Waterfront Resort and Marina, the Island Hotel Newport Beach, and any other hotel and resort business that may join NBTBID in the future. Additional hotels and resorts that wish to pay the assessment and receive NBTBID services in the future may do so upon the approval of a majority of the then existing membership of the NBTBID, and through the execution of an agreement with the City, approved by the City Council, after a noticed public hearing consistent with California Streets and Highways Code Sections 36623 and 36637, as the same may be amended from time -to- time. Section 6: The name of the renewed district shall remain Newport Beach Tourism Business Improvement District. Section 7: The annual assessment rate is three percent (3.0 %) of gross short -term (stays less than thirty (30) calendar days) room rental revenue. Because programs will not be designed to attract certain stays, certain types of stays will not be assessed, as described in the MDP. Section 8: The assessments levied for the NBTBID shall be applied to provide specific benefits directly to assessed businesses by increasing room night sales. Marketing, sales promotions, advertising, and communications will increase overnight tourism and market assessed businesses as tourist, meeting and event destinations, thereby increasing room night sales. Funds remaining at the end of any year may be used in subsequent years in which NBTBID assessments are levied as long as they are used consistent with the requirements of this resolution and the MDP. Section 9: The NBTBID will have a ten (10) year term unless renewed or terminated pursuant to the California Streets and Highways Code. Section 10: Bonds will not be issued. Section 11: The time and place for the public meeting to hear testimony on renewing the NBTBID and levying assessments is set for January 14, 2014, at 7:00 p.m., or as soon thereafter as the matter may be heard, at the Council Chambers located at 100 Civic Center Drive, Newport Beach, CA 92660. Section 12: The time and place for the public hearing to renew the NBTBID and levy the assessment is set for January 28, 2014, at 7:00 p.m., or as soon thereafter as the matter may be heard, at the Council Chambers located at 100 Civic Center Drive, Newport Beach, 9 CA 92660. The City Clerk is directed to provide written notice to the lodging businesses subject to assessment of the date and time of the hearing and to provide that notice as required by California Streets and Highways Code Section 36623. Section 13: At the public hearing the testimony of all interested persons for or against the establishment of the NBTBID may be received. If, at the conclusion of the public hearing, there are of record written protests by the owners of the lodging businesses within the proposed NBTBID that will pay fifty percent (50 %) or more of the estimated total assessment of the entire NBTBID, no further proceedings to renew the NBTBID shall occur for a period of one (1) year. Section 14: The complete MDP is on file with the City Clerk and may be reviewed upon request. Section 15: The City Council finds the adoption of this resolution of intention is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 16: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared invalid or unconstitutional. Section 17: This resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify the vote adopting this resolution. ADOPTED this 10'h day of December, 2013. ATTEST: Leilani I. Brown, City Clerk 3 Keith D. Curry, Mayor 10 BS —x,^ Newport Beach Clty Limits. EXHIBIT A District Boundaries r M Balboa Bay Club and Resort 411� �V PO q Bq N P,q c/pIc oc�g N UPPER NEWPORT BAY 133 Radisson Newport . Beach i • Fairmont Newport Beach 73 Newport Beach Marriott BayvieW ®. i r 4PO O 9 Q4 G p�0 Island Hotel Newport Beach m Hyatt Regency Newport Beach �a ® ®' Newport . Beach Marriott Hotel & Newport . Dunes Waterfront Resort & Marina (. NI 11 Attachment B December io, 2013 MANAGEMENT DISTRICT PLAN 2014-2024 12 NEWP(}MTBEACA '[O[`K|ISNJB|`STNTE,SS 7�[PT<(}�`|�y\[�tvJ7,Tll �`l` -�-��� ��- � ��-_ \IAN \(`[�'`[��{T 7))\^[l�i/`1'l�7, \Y� �^^-.' ,�`-- ` `'~` `^.`'^ +' ^. I. OVERVIEW ..----..,-........-..............-_._--.......-........l I[ IMPETUS ..................................................................................................................................................... J II[ BACKGk{){/KO}, ..................................................................................................................................... 4 I\[ DC)l}KD]/\RY ...---------`~.,--'—.--.`.._-_-.^---,_-._._-.,...-._.5 V. BUDGET AND SE}[vlCEG ..................................................................................................................... 6 A. Annual Service Plan ............................................................................................................ 6 B. Determination nf Specific Benefit -- .............................................................................. 7 C. Assessment ............................ .......................... ................ ....................................... ......... 8 D. Time and Mariner for Collecting Assessments ................................................................... P E. Penalties and Interest ........................................................................................................... F7 \T. GOVERNANCE -----..----,-,,`.-.-.-,---`------------.---.,`'1D A. Owners' Association ................................................................................................... ,.,]0 BL Brown Act and California Public Records Act Compliance ..................................... ,-,18 C. Annual Report ................................................................................................................... lO APPENDIXl- LAW ....................................................................................................................................... 1l Prepared by � 0 � ^ � `�C(�, Civitas Advisors }nc� (800)999-778} 13 C)VERVIEW Administered by Visit Newport Beach, Inc. (VNB), the Newport Beach Tourism Business Improvement District (NBTBID) is a business improvement district • created to provide specific benefits to its member businesses, by funding marketing and sales promotion efforts for the assessed businesses. The NBTBID was formed by the City of Newport Beach (City) in 2009, pursuant to the Property and Business Improvement District Law of 1994, Streets and Ighways Code Sections 36600 et sect'. Upon the request of the NBTBID Owner's Association, the City Council modified the NBTBID in 2012 to add another lodging business. The NBTBID is now approaching the end of its original five -year term and the member businesses wish to renew the NBTBID for an additional ten (10) years. Location: The City of Newport Beach. The NBTBID includes eight (8) lodging businesses located within the boundaries of the City oENewportBeach. The NBTBID shall include the Fairmont Newport Beach, the Hyatt Regency Newport Beach, the Newport Beach -Marriott Bayview, the Newport Beach Marriott hotel :& Spa, the Radisson Newport Beach, the Balboa Bay Club and Resort (a.k.a., Balboa Bay Resort), the Newport Dunes Waterfront Resort and Marina, The Island Hotel Newport Beach, and any other hotel and resort business that may join the NBTBID in the Future. Additional hotels and resorts that wish to pay the assessment and receive NBTBID services in the future may do so upon the approval of a majority of the then existing membership of the NBTBID, and through the execution of an agreement with the City approved by the City Council consistent with the Property and Business Improvement District Law of 1994, Streets. and Highways Code Sections 36600 et seq., as the same may .beamended from time to time. Services: The NBTBID is designed to provide specific benefits directly to assessed businesses by increasing room night sales. The improvements and activities consist of sales marketing and direct sales programs to increase overnight tourism and market the assessed businesses as tourist, meeting and event destinations, thereby increasing room night sales. These same improvements and activities are proposed for each year of the NBTBID's ten (10) year term. Budget: The total NBTBID annual budget for the initial year, and subsequent years, is anticipated to be approximately two and one -half million dollars ($2,500,000). This budget is expected to fluctuate as room sales do but is, not expected to significantly change over the NBTBID's ten (10) year term. Cost: The annual' assessment rate is three percent (3.0 %) of gross shorc-ccrm (i.e., stays of thirty (30) calendar days or less) room rent-at revenue. Because programs will not be designed to attract certain stays, certain types of stays will not be assessed, as described in Section V(C). Overview I Newport Beach Tourism Business Improvement District 14 Duration: The proposed NBTBID will have a ten (10) year term. The NBTBID assessment will be implemented beginning February 1, 2014, and will be in effect for ten (10) years through January 31, 2024. After ten (10) years, the petition and City Council hearing process must be repeated for the NBTBID to be renewed. Also, once per year beginning on the anniversary of the formation of the NBTBID, there is a thirty (30) calendar day period in which assessed businesses paying more than fifty percent (50 %) of the assessments may protest and initiate a City Council hearing to terminate the NBTBID. Management: VNB will serve as the NBTBID's Owners' Association. The Owners' Association is charged with managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the City Council. Renewal: The NBTBID renewal requires submission of petitions from lodging businesses representing more than fifty percent (50 %) of the total annual assessment, followed by a City Council public meeting and public hearing and an opportunity for written protest. The assessed lodging business owners will receive a notice of the public meeting and the public hearing by mail. If there is no majority protest, the City Council may adopt a resolution renewing the NBTBID. Overview I Newport Beach Tourism Business Improvement District 15 11. IMPETUS There are several reasons why the NBTBID should be renewed; the most compelling reasons are as follows: L The Need to Increase Occupanc:v The renewal of the NBTBID is a proactive effort to provide supplemental funding for tourism promotion beyond that provided by the City. The funding will ensure that adequate financing exists for the investment required to increase occupancy in the lodging industry and be competitive in the conference segment of the tourism market. The investment will cover an expanded marketing and promotional budget needed to reach this market segment. 1 An Opporttmiry for Increasing Ch)- Tax Revenues As occupancy rates increase, so too will the City's TOT revenue. With stable public /private funding for tourism marketing efforts, annuall occupancy rates should increase significantly as new marketing and sales promotion programs are implemented. Greater occupancy will also produce an increase in sales tax revenues from tourism - related spending. The renewal of the NBTBID, in partnership with VNIB, creates a stable funding source tied directly to tourism promotion. J. Stable Funding for Tourism Promotion The NBTBID will provide a stable source of funding for consistent tourism promotion efforts. The NBTBID will provide funding for tourism promotion free of the political and economic circumstances that can reduce or eliminate government funding for tourism promotion. Impetus I Newport Beach Tourism Business Improvement District 16 II1. BACKGROUND Tourism Business Improvement Districts (TBIDs) are an evolution of the traditional Business Improvement District. The fast TBID was formed in West Hollywood, California in 1992. Since then, over 80 California destinations have followed suit. In recent years, other states have begun adopting the California model— Washington, Montana, and Tcxas have adopted TBID laws. Several other states are in the process of adopting their own legislation. And, some cities, like Portland, Oregon, have utilized Number of Tine OperAing Per Year their charter powers to create 70 ..,__ — _ _ _ _ _ ___- _ _ ___ __ -__ _ __- ,.__ TBIDs without a state law. N W Y N T J 0 V O ti California's TBIDs collectively raise over one hundred fifty million dollars ($150,000,000) annually for local destination marketing. With competitors raising their budgets, and increasing rivalry for visitor dollars, it is important that the Newport Beach lodging businesses continue their investment in stable, lodging- specific marketing programs. TBIDs utilize the efficiencies of private - sector operation in the market -based promotion of tourism districts. TBIDs allow lodging business owners to organize their efforts to increase room night sales. Lodging business owners within the TBID pay an assessment and those funds are used to provide services that increase room night sales. In California, TBIDs are formed pursuant to the Property and Improvement District Law of 1994. This law allows for the creation of a special benefit assessment district to raise funds within a specific geographic area. The key difference between TBIDs and other spedal benefit assessment di trictr it that funds rained are allocated to the prrivate, non -km & coogradon governing the diRrid There are many benefits to a TBID: • Funds must be spent on services and improvements that provide a specific and special benefit only to those who pay; • Funds cannot be diverted to general government programs; • They are customized to fit the needs of the assessed businesses in each destination; • They allow for a wide range of services; • They are designed, created andgoverned by those who will pay the assessment; and • They provide a stable funding source for tourism promotion. Background I Newport Beach Tourism Business Improvement District 17 e0 N -- — 20 - - --- r0 s • 1 N W Y N T J 0 V O ti California's TBIDs collectively raise over one hundred fifty million dollars ($150,000,000) annually for local destination marketing. With competitors raising their budgets, and increasing rivalry for visitor dollars, it is important that the Newport Beach lodging businesses continue their investment in stable, lodging- specific marketing programs. TBIDs utilize the efficiencies of private - sector operation in the market -based promotion of tourism districts. TBIDs allow lodging business owners to organize their efforts to increase room night sales. Lodging business owners within the TBID pay an assessment and those funds are used to provide services that increase room night sales. In California, TBIDs are formed pursuant to the Property and Improvement District Law of 1994. This law allows for the creation of a special benefit assessment district to raise funds within a specific geographic area. The key difference between TBIDs and other spedal benefit assessment di trictr it that funds rained are allocated to the prrivate, non -km & coogradon governing the diRrid There are many benefits to a TBID: • Funds must be spent on services and improvements that provide a specific and special benefit only to those who pay; • Funds cannot be diverted to general government programs; • They are customized to fit the needs of the assessed businesses in each destination; • They allow for a wide range of services; • They are designed, created andgoverned by those who will pay the assessment; and • They provide a stable funding source for tourism promotion. Background I Newport Beach Tourism Business Improvement District 17 IV. BOUNDARY The NBTBID will include eight (8) lodging businesses, available for public occupancy within the boundaries of the City of Newport Beach, and other hotels and resorts that may join NBTBID in the future. The boundary, as shown in the map below, currently includes eight (8) lodging businesses. A complete listing of lodging businesses within the NBTBID can be found in Appendix 2. 55 i 1 ygw .' =a. 1 Newport Beath City Limits O Balboa Bay Club and Resort • NFwP ORT e4 � Pq C /FCC OCFAN UPPER NEWPORT BAY 133 Radisson Newport Beach • • Fairmont Newport Beach 73 Newport Beach Marriott Bay view S T1 TO P �E G O Q Pie Island Hotel Newport Beach m Hyatt Regency Newport Beach o • to • Newport Beach Marriott Hotel & Newport Dunes Waterfront Resort & Marina '� Boundary I Newport Beach Tourism Business Improvement District N 18 V. BUDGET AND SERVICES A. Annual Service Plan Assessment funds will be spent to provide specific benefits conferred, or privileges granted directly to, the assessed businesses that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the NBTBID funds are sales, marketing, advertising, and promotional programs available only to assessed businesses. In the initial year of the renewed term, there will be funds carried over from the NBTBID's prior term. A service plan budget has been developed to deliver services that benefit businesses throughout the NBTBID. A detailed annual budget will be developed by the Owners' Association and approved by the City Council. The table below illustrates the initial annual budget allocations. Sales Administration 6.25% $156,250.00 Contingency 1.50% $37,500.00 City Collection 0.25% $6,250.00 Total Annual Budget 100% $2,500,000.00 Actual annual revenues will fluctuate due to market conditions, but are not expected to change significantly over the term of the district. The budget above is for the initial year, the same activities are proposed for subsequent years. VNB shall adopt specific budgets after the initial year. A description of the proposed improvements and activities for the initial year of operation is below. Sales Marketing — Direct Sales A sales marketing program will promote assessed businesses as tourist, meeting, and event destinations. The programs will be focused on attracting group sales to assessed businesses. Only assessed businesses will receive benefits featured in, and obtain leads from, the sales and marketing activities. The sales and marketing program will have a central theme of promoting the assessed Newport Beach lodging businesses as desirable places for group events. The program will have the goal of increasing overnight visitation and room night sales at assessed businesses, and may include the following activities: • Internet marketing efforts to increase awareness and optimize intemet presence for assessed businesses; • Print ads in magazines and trade publications featuring assessed businesses and targeted at potential group meeting planners; • Sales missions and sales calls to attract groups to assessed businesses; • Costs related to providing sales marketing and direct sales programs; • Client events designed to book new and returning groups at assessed businesses; • Familiarization tours of assessed businesses; • Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed businesses; EMBudget and Services I Newport Beach Tourism Business Improvement District 19 • Attendance of professional industry conferences and affiliation events on behalf of assessed businesses; and • Lead generation activities designed to attract group events to assessed businesses. The sales solicitatiorr portion of the budget will be utilized to support direct sales efforts; including personnel and sales support teams that conduct outreach to clients, provide site inspections and work wgith assessed hotels to close select group business.. Sales — Administration The sales administration portion of the budget will be utilized for administrative costs related to providing the. sales programs: This may include office costs, and other general administrative costs, such as insurance, legal, and accounting fees. Legal. fees may include defense of the NBTBID. City Administration Fee The City of Newport Beach shall be paid a fee equal to one, quarter of one percent (0.259/6) of the amount of assessment collected to cover its costs of collection and administration. Contingency ,A prudent portion of the budget will be held in -a contingency reserve. These funds may be used to cover unanticipated program or administrative costs. if, at expiration of the NBTBID there are contingency funds remaining and hotels wish to renew the district, the contingency funds could be used for the renewal effort. B. Determination of'Speciric$encUt State law requires that assessment funds be expended on a specific benefit conferred directly, to the assessed businesses that is not provided. to those not charged, and which does not exceed. the reasonable cost to the City conferring the benefit. The services in this Management District Plan are designed to provide targeted benefits directly to assessed businesses. 'These services are tailored not to serge the general public, but rather to serve the specific assessed businesses within the NBTBID (e.g., the proposed activities are specifically targeted to increase room night sales for assessed businesses within the boundaries of the NBTBID, and are narrowly tailored); NBTBID funds will be used exclusively to provide die specific benefit of increased room night sales directly to the- businesses. Non- assessed businesses will not be £earned in NBTBTD programs and will not receive sales leads from them. The activities paid for from assessment revenues are business services constituting and providing specific benefits to the assessed businesses. To the extent any non- paying business benefits from. TBID programs, that portion of the program will be paid for with non - assessment funds. Further„ the assessment may be utilized to provide specific government services directly to the assessed, businesses that are not provided to those not charged, and which. do not exceed the reasonable costs to the City providing the services. Marketing like that to be provided by the: NBTBID has been and is provided by the City, through its contract with. VNB. The amount of the assessment is no more than necessary to cover the reasonable costs of the proposed activities, and the manner in which the costs are allocated to a business owner bear a fair share and bears a reasonable relationship to the assessed businesses' benefits received from the proposed activities. NBTBID services will be implemented carefully to ensure they do not exceed the reasonable cost of such services. Funds will be managed by the. Owners Association, and reports submitted on an annual basis to the City. Only assessed businesses will be featured in marketing materials, receive Budget and Services I Newport Beach Tourism Business Improvement District 20 sales leads generated from NB-l'BID- Eunded activities, be Featured in advertising campaigns, and benefit from other NB1'BID- funded services. Non - assessed businesses will not receive these, nor any other, NBTBID - funded services and benefits. C. Assessment The annual assessment rate is three (3) percent of gross short -term (stays of thirty (30) calendar days or less) room rental revenue. Based on the benefit received, assessments will not be collected on stays of more than thirty (30) consecutive calendar days. Based on the benefit received and because these types of stays will not be sought after by the NBTBID programs, the following stays are not subject to TOT under die Newport Beach Municipal Code (Section' 3.16.040) and are not subject to assessment: e Stays by any officer or employee of payment of transient occupancy taxes or international treaty, a foreign, government who is exempt from by reason of express provision of Federal law • Stays by a transient occupying a hotel pursuant to a qualifying rental agreement entered into prior to the first day of occupancy; s Stays by an employee of an airline company who is occupying a hotel room in the course of his or her employment, but only when the room is rented by the airline employer pursuant to a qualifying rental: agreement that has been preapproved by the City's Finance Director; u Stays by any person or transient occupying a hotel room provided without rent charged (complimentary) to the person or transient by the operator, including but not limited to:. 1. Rooms provided to charitable organizations; 2. Rooms provided to meeting planners who may book future hotel rooms and provide 'business and conferencing opportunities for the economic benefit of the hotel; 3. Rooms provided to displeased guests; and /or d. Rooms provided to hotel employees. The term "rent" shall mean the consideration charged, whether or not received, for the occupancy IoE space in a lrotcl valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits, and property and services of any kind or nature, without any deduction. Rent shall include the consideration charged by a business for accommodations, including any (t1) un- refunded advance rental deposits or (B) separate charges levied for items or services' which are part of such accommodations including, but not limited to, furniture, fixtures; appliances, linens, towels, non- coin - operated safes; utilities (such as energy surcharges) and mud scnice. Rent shall not include any federal, state or local taxes collected, including but not limited to transient occupancy taxes. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable. taxes, a nd.each transient shall receive it receipt for payment from the business. The assessment shall not be considered revenue for any purposes, including calculation of transient occupancy taxes. Bonds may not be issued. Budget and Services I Newport Beach Tourism Business bnprovement District 21 D. Time and Manner for Collecting Assessments The NBTBID assessment will be implemented beginning February 1, 2014 and will continue for 10 years through January 31, 2024. The City, or its designee, is responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each assessed business located in the boundaries of the NBT 31D. The City, or its designee, shall take all reasonable efforts to collect the assessments from each assessed business. The City shall forward the assessments collected to the Owners' Association. E. Penalties and Interest 1. Any assessed business which fails to remit any assessment within the time required shall pay a penalty of ten (10) percent of the amount of the assessment in addition to the amount of the assessment (initial penalty). 2. Any business that fails to remit the assessment and initial penalty on or before a period of thirty (30) calendar days following the date on which the assessment first became delinquent shall pay a second delinquency penalty of ten (10) percent on both the amount of the assessment and the initial penalty (second penalty). 3. In addition to the penalties imposed, any assessed business that fails to remit any assessment shall pay interest on the amount of assessment that is due and owing at the rate of one and one -half of one percent (1 -'/2 %) per month for each month or portion of a month that the assessment remains unpaid exclusive of penalties. For purposes of collection, every penalty imposed and such interest as accrues shall become a part of the assessment requited to be paid. 4. In addition to the penalties and interest provided in this section, the assessed business shall reimburse the City or Owners' Association for costs in performance of an audit if, as a result of the audit, it is determined there was any intentional misrepresentation by the assessed business with respect to the amount of assessment due or there is a five percent (5 9/o) or greater discrepancy between the amount of annual assessment due and the amount paid by the business. Such reimbursement shall be paid by business within thirty (30) calendar days of the assessed business being notified in writing of the amount of audit costs. F. Annual Budget The total ten (10) year improvement and service plan budget is projected at approximately two and one -half trillion dollars ($2,500,000) annually, or twenty-five trillion dollars ($25,000,000) through the ten (10) year term. This amount may fluctuate as sales and revenue increase at assessed businesses. Budget and Services I Newport Beach Tourism Business Improvement District 22 N'I. GOVERNANCE A. Owners' Association The City Council, through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code section 36651, to identify the body that shall implement the proposed program, which shall be the Owners' Association of the NBTBID as defined in Streets and Highways Code section 36614.5. The City Council has determined that Visit Newport Beach, Inc. will serve as the Owners' Association for the NBTBID. B. Brmvn Act and California Public Records Act Compliance An Owners' Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owner's Association is, however, subject to government regulations relating to transparency, namely the Ralph M, Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners' Association is considered a legislative body under the Ralph M. Brown Act (Government Code sections 54950 et seg.). Thus, meetings of the VNB board and certain committees, to the extent they discuss the TBID, must be held in compliance with the public notice and other requirements of the Brown Act. The Owners' Association is also subject to the record keeping and disclosure requirements of the California Public Records Act. C. Annual Report VNB shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code section 36650 (see Appendix 1). Governance I Newport Beach Tourism Business Improvement District 23 APPENDIX I - LAW Property And Business Improvement District Law of 1994 Cal Sts & Hy Code § 36600 (2013) *as This document is current through the 2013 supplement as. (All 2012 legislation, 2012 Govemor's Reorg. Plan No. 2 and all propositions approved by the electorate at the June and November 2012 elections) § 36600. Citation of part This part shall be known and may be cited as the "Property and Business Improvement District Law of 1994." § 36601. Legislative findings and declarations The Legislature finds and declares all of the following. (a) Businesses located and operating within the business districts of this state's communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. (b) It is in the public interest to promote the economic revitalization and physical maintenance of the business districts of its cities in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow cities to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that benefits from those improvements. (d) Assessments levied for the purpose of providing improvements and promoting activities that benefit real property or businesses are not taxes for the general benefit of a city, but are assessments for the improvements and activities which confer special benefits upon the real property or businesses for which the improvements and activities are provided. S 36602. Purpose of part The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within a business improvement area. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. § 36603. Preemption of authority or charter city to adopt ordinances levying assessments Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)). Appendix 1— Law I Newport Beach Tourism Business Improvement District 24 § 36603.5. Part prevails over conflicting provisions Any provision in this part that conflicts with any other provision of law shall prevail over the other provision of law. § 36604. Severability This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes. § 36605. [Section repealed 2001.1 § 36606. "Assessment" "Assessment" means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and promoting activities which will benefit the properties or businesses located within a property and business improvement district. S36607. "Business" "Business" means all types of businesses and includes financial institutions and professions. § 36608. "City" "City" means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Ditition 7 of Title I of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California. § 36609. "City council" "City council" means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part. § 36610. 'Improvement' "Improvement" means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following: (a) Parking facilities. (b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (e) Trash receptacles and public restmoms. (d) Lighting and heating facilities. (e) Decorations. (f) Parks. (g) Fountains. Appendix 1— Law I Newport Beach Tourism Business Improvement District 25 (h) Planting areas. (i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the area. (k) Ramps, sidewalks, plazas, and pedestrian malls. 0) Rehabilitation or removal of existing structures. § 36611. "Property and business improvement district "; "District" "Property and business improvement district," or "district," means a property and business improvement district established pursuant to this part. 536612. "Property" "Property" means real property situated within a district. § 36613. "Activities" "Activities" means, but is not limited to, all of the following: (a) Promotion of public events which benefit businesses or real property in the district. (b) Furnishing of music in any public place within the district. (c) Promotion of tourism within the district. (d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Activities which benefit businesses and real property located in the district. § 36614. "Management district plan "; "Plan" "Management district plan" or "plan" means a proposal as defined in Section 36622. §36614.5. "Owners' association" "Owners' association" means a private nonprofit entity that is under contract with a city to administer or implement activities and improvements specified in the management district plan. An owners' association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners' association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this section, an owners' association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title S of the Government Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Dioidon 7 of Title 1 of the Government Code), for all documents relating to activities of the district. § 36615. "Property owner "; "Business owner "; "Owner" "Property owner" means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. "Business owner' means any person recognized by the city as the owner of the business. "Owner" means either a SolAppendix I — Law I Newport Beach Tourism Business Improvement District 26 business owner ora property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination ofowncrship shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires, the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient- §36616. "Tenant" "Tenant" means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an Owner. S 36617. Alternate method of financing certain improvements and activities; Effect on other provisions This part provides an alternative method of financing certain improvements and activities. "fhe ptovisions of this part shall not affect or limit any other provisions of law authorizing or prow ding for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Taw of 1989 (part 6 (commencing with Section 36500) of this division) is valid and.effective and is unaffected by dtis pate. 536620. Establishment of property and business improvement district A property and business improvement district may be established as provided in this chapter. 5 36620.5. Requirement of consent of city council A. county may not form a district within the territorial jurisdiction of a city without-the consent of the city council of that city. A city may not form a district within the unincorporated territory of a, county without the consent of the board of supervisors of that county. A city may not forma district within the territorial jurisdiction of another city witbout the consent of the city council of the other city. § 36621. Initiation of proceedings; Petition of property or business owners in proposed district (a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a d "stuct. The amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied. (b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following: (1),A map showing the boundaries of the district. (2) Information specifying where the complete management district plan can be obtained. Appendix 1 — Law I Newport Beach Tourism Business Improvement District 27 (3) Information specifying that the complete management district plan shall be furnished upon request. (c) The resolution of intention described in subdivision (a) shall contain all of the following: (1) A brief description, of the proposed activities and improvements, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within, the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the- narure.and extent of the improvements and activities and the location. and extent of the proposed district. (2) A time and place fora public hearing on the establishment of the property and business improvement district and the levy of assessments, which. shall be consistent with the requirements of Section 36623. 5 36622. Contents of management district plan The management district plan shall contain all of the: following: (a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the distuct.'If the assessment will be.levied on businesses, a map that identifies the district boundaries in.sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the, district boundaries. (b) The name of the proposed district. (c) t1 description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected lands and businesses included. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. Tliis part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including„ but not limited to, the Parking and Business ImprovcmentArea Law of 1989 (Part 6 (commencing, with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to thiss part. This part does not prohibit the Boundaries of a business assessment district created pursuant to. this part to overlap with a property assessment district created pursuant to this part. (d) The improvements and actinides proposed for each year of operation of the district and the maximum . cost thereof. If the improvements and activities proposed for each year of operation . are the same, a description of the first year's proposed improvements and activities and.a statement that the same improvements and activities are proposed for subsequent years shall satisfy the requirements of this subdivision. (e) The total annual amount proposed to be expended for improvements, maintenance and operations, and debt service in each year ,of operation of the district. I1 the assessment is levied on businesses, this - amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this subdivision. Appendix 1 —Law I Newport Beach Tottcism'Business hnprovement District 28 (f) The proposed source or sources of financing, including the proposed method and basi's of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against his or her property or business. Theplan: also shall state whether bonds will be issued to finance improvements. (g) The time and manner of collecting the assessments. (h) The specific number of years in which assessments will be levied. In anew district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance. capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k) A list of the properties or businesses to be assessed, including the assessor's parcel ntanbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business; to defray the cost thereof, including operation and maintenance. The plan may provide that all or any class or category* of real property which is exempt by law from real property taxation may nevertheless be included within the boundaries of the district but shall not be subject to assessment on real property. (1) Any other item, or matter required to be incorporated therein by the city council. 3662. Procedure to levy assessment (a) :If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Seelion 53753 of llte-Government Code. (b) If a'. city council proposes to levy a new or increased business assessment, the notice and protest and heating procedure shall comply with Section 54954.6 of the Govenimefit. Cade; except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writirfg by any interested person..Every written protest shall be filed with the clerk at or before the time Fixed for the public hearing.. The city council may waive any irregularity in.the form or content of any written protest, A wtitten.protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest shall contain ,a description of the business in which the person subscribing the protest is interested sufficient to idendfv the business and, if a person subscribing is not shown on the official records of the city as the owncrof the businessi the protest-sball contain or be accompanicd,by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protestthat does not comply with this section shall not be counted in determining a majority protest. If written protests are.received from the owners orauthotized representatives of businesses in the proposed district that will pay 50 percent or more of the assessments proposed to be levied and protests are. not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy die proposed assessment against such businesses, as contained in the resolution of intention, shall. be taken for a period of one year from the date of the finding of a: majority protest by the city council. (c) If a city council proposes to conduct a single proceeding to levy both a new orincreased property assessment and a new or increased business assessment, the notice and.protest and hearing procedure for theproperry assessment shall comply with subdivision (a), and the notice and protest Appendix l — Law I Newport Beach Tourism Business Improvement District R+l and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property, and business, owners. § 36624. Changes to proposed assessments At the conclusion of the public hearing to establish the district, the city council may adopt, revise; change, reduce, or modify the proposed assessment or the type or types of improvements and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any ot'all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement. district that will exclude territory that will not benefit from the proposed improvements or activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627. § 36625. Resolution of formation (a) If the city council, following the public hearing, decides to establish the proposed property and business improvement district, the city council shall adopt a resolution of formation that shall contain all of the following: (1) A brief'desctiption.of the proposed activities and improvements, the amount of the proposed assessment; a statement as to whether the assessment will be levied on property, businesses, or both witlun the district„ a statement About whether bonds will be issued, and a description of the exterior boundaries of the proposed district. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements and activities and the location and extent of the proposed district. (2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing.was held conccrding, the establishment of the district. (4) A determination regarding any protests received. The city= shall not establish the district or levy assessments if a majority-protest was received. (5) A statement that the properties, businesses, or properties and. businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements and activities to be provided in the, district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing ,concerning establishment of the district. (7) A finding that the property or businesses within the area.of the property and business .improvement district will be benefited by the.improvetnents and activities funded by the assessments proposed to be levied. (b) The adoption of the resolution of Formation and, if required, recordation of the notice and map pursuant to Section 36627 shall constitute,the levy ofan assessment in each of the fiscal years referred to in the management district plan. Appendix 1 — Law I Newport Beach Tourism Business Improvement District CM §36626. Resolutionestablishingdistricc If the city council, following the public hearing, desires to establish the proposed property and business, improvement district, and the city council has not made changes pursuant to Section 36024, or has made changes that do-not substantially change the proposed assessment, the city council shall adopt a resolution establishing the district. The resolution shall contain all of the information specified in paragraphs (1) to (8), inclusive, of subdivision (b) of Section 36625, but need not contain infonnation-about the preliminary resolution if none has been adopted. 5,36626:5. [Section repealed 1999.1 536626.6. [Section repealed 1999] § 36626.7. [Section repealed 1999] 5 36627. Notice and assessment diagram Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625 or Section 36626, the clerk of the city shall record a notice and an assessment diagram pursuant to Section 3114. No other provision. of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part., 6 36628. Establishment of separate benefit zones . within district; Categories of businesses The city council may establish one or more separate benefit zones within the district based upon . the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose different assessment within each benefit zone. If the assessmentis to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a di'fferentassessment or rate of assessment on each category of business, or on each category of business within each zone. 5 36628.5. Assessments on businesses or property owners The city council may levy assessments on businesses or on property owners, or ,a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it deremiines corresponds with the distribution of benefits From, the proposed improvements and activities. § 36629. Provisions and procedures applicable to benefit zones and business categories All provisions of this part applicable to the establishment modification, or disestablishment•ofa. property and business improvement district apply to the establishment, modification,' or disestablishment of benefit zones or categories of business-The city council shall, to establish, modify, or disestablish a benefit-zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement- distnct. 6 36630. Expiration of district, Creation of new district Appendix I ­Law I Newport Beach Tourism Business Improvement District 31 If 'a property and business improvement district expires due- to the time limit set pursuant to subdivision (h) of Section 36622,a new management district plan may be created and a new district established pursuant to this part. § 36631: Time and manner,of.cohection of ass essments;•Delinquent payments The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part shall be charged interest and penalties. 5 36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property (a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part. (b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part. (c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded thtough these assessments, and shall not be subject to any assessment pursuant to this part. § 36633, Time for contesting validity of assessment The-validity of an assessment levied under this parr shall not be contested in any action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessmentis adopted pursuant to Section 36626. Any appeal from a. final judgmentin an action or proceeding shall be perfected within 30 days after the entry of judgment.. g 36634. Service contracts authorized to establish levels of city services The city council may execute baseline service contracts that would establish levels of city services that would continue.after a property and business improvement district has been formed. 36635. Request to modify management district plan The owners' association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this, chapter. § 36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention; Modification of improvements and activities by adoption of resolution after public hearing Appendix 1 —Law I Newport Beach Tourism Business Improvement District 32 (a) Upon the written request of the owners' association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements andactivities to be funded with the revenue derived from the levy of the assessments by adoptinga resolution determining to make the modifications after holding .a public hearing on the proposed modifications. 'If the modification includes the levy of a new or inereased assessment, the city council shall comply with Secdon.'36623. Notice of all other public meetings and public hearings, pursuant to this section shall comply with both of the following: (1) The resolution. of intention shall' be published.in a newspaper of general circulation in the city once at least seven days before die public meeting. (2) A complete copy of the resolution of intention shall be mailed by first class mail, ataleast 10 days before the public meeting, to each business owner or property owner affected by the proposed modification. (b) The city council shall adopt a resolution of intention which states the proposed modification prior to she public hearing required by this section. Thep Liblic hearing shall be held not more than 90 days after die adoption of the resolution of intention. § 36637. Reflection of modification in notices recorded and maps Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the. provisions of Section 36627. S 36640, Bonds authorized; Procedure; Restriction on reduction or termination of ,assessments (a) The city council may, by resolutio e n, detemiin and declare that bonds shall be issued to Enance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under die Improvement Bond Act of 1915 (Division 90 (commencing with Section 8500)) of in conjunction with Marks -Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584 ofCbapter5 ofDioision 7 of Title Y of the Govury mMt Code). Either, acr, as dic case may be, shall, govern the proceedings relating to the..issuance of bonds; although proceedings under the Bond Act of 1915 may be modified by the city council as necessary toaccommodate.assessments levied upon business pursuant to this part. (b) The resolution adopted pursuant to subdivision. (a) shall generally describe. the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements., specify the number of annual installments and the fiscal . years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed die amount of revenue estimated to be raised from assessments over 30 years_ (c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall nor be reduced or. terminated if doing so would interfere with the timely retirement of the debt.. 36641. [Section repealed 2001.] 36642. [Section repealed 2001.] §36643. [Section repealed 2001.] l .Appendix 1 — Law Newport Beach Tourism Business Improvement District 33 36650. Report by owners' association; Approval or modification by city council (a) The owners' association shall cause to be prepared a report for each fiscal year, except the first year; for which assessments are to be levied and collected to pay the costs of the improvements and activities described in die report. The owners' association's first report shall be due'after the first year of operation of the district. The report may propose changes,'induding, but not liniTted to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used. (b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information: (1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements and the activities for that fiscal year. (4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year. (5) The amount of any surplus or deficit revenues to be carried over from a previous fiscal year. (6) The amount ofany contributions to be made from sources other than assessments levied pursuant to this part. (c) The city council may approve the report as filed by the owners' associa don or may,modih any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636. The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to. be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district. 536651. Designation of owners` association to provide improvements and activities The management district plan may; bur is not required to, state that an owners' association will provide the improvements or activities described in the management district plan. If the management district plan designates an owners' association, the city shall contract with the designated nonprofit corporation toprovide services. 36660. Renewal of district; Transfer or refund of remaining revenues; District term limit (a) Any district previously established whose term has expired, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining rcvenues.derived from the levy of assessments, orany revenues derived from the sale of assets acquired with the revenues, shall be transferred to the. renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district If the renewed district-does not include parcels or businesses included in the prior Appendix 'I — Law I Newport Beach Tourism Business Improvement District 34 district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses. (c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments; improvements, or activities of renewed district be the same as the original or prior district. 36670. Circumstances permitting disestablishment. of district; Procedure (a) Any district established or extended pursuant to the provisions of this part, where therc'is no indebtedness; outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:. (1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, fhere shall be a 30 -day period each year in which assessees may request disestabli shment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The nest such 30 -day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30 -day period. Upon the written petition of the owners or authorized representatives of real property or the: owners or authorized representatives of businesses in the area who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district: The city council shall notice hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and. business improvement district The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not morerhan 60 days after the adoption of the resolution of intention. § 36671. Refund of remaining revenues upon disestablisb.ment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district (a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the- salcrof assets acquired with the revenues, or from bond reserve or construction funds, shall be, refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the.assessments levied' in the .:fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan. Appendix 1 —Law I Newport Beach Tourism Business Improvement District 35 (b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund. Appendix 1— Law I Newport Beach Tourism Business Improvement District 36 APPENDIX 2 - ASSESSED BUSINESSES Fairmont Newport Beach 4500 MacArthur Boulevard Newport Beach CA 92660 Hyatt Regency Newport Beach 1107 Jamboree Road Newport Beach CA 92660 Newport Beach Marriott 500 Bayview Circle Newport Beach CA 92660 Bayview Newport Beach Marriott Hotel 900 Newport Center Drive Newport Beach CA 92660 & Spa Radissou Newport Beach 4545 MacArthur Boulevard Newport Beach CA 92660 Balboa Bay Club and Resort 1221 West Coast highway Newport Beach CA 92663 The Island Newport Beach 690 Newport Center Drive Newport Beach CA 92660 Newport Dunes Waterfront 1131 Back Bay Drive Newport Beach CA 92660 Resort & Marina Appendix 2 — Assessed Businesses I Newport Beach Tourism Business Improvement District 37 Recieved After Agenda Printed Agenda Item #5 December 10, 2013 PETITION TO THE CITY OF NEWPORT BEACH TO RENEW THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT We petition you to initiate special assessment proceedings to renew the Newport Beach Tourism Business Improvement District in accordance with the Property and Business Improvement District Law of 1994, Streets and Highways Code Section 36600 et seq., for the purpose of implementing programs described in the Management District Plan summary attached hereto as Exhibit A. Lodging Establishment Business Owner Signature !11 Date A complete copy of the Management District Plan will be furnished upon request. Requests for a complete copy of the Management District Plan should be made to: Gary Sherwin Newport Beach & Company 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 (949)719 -6100 M PETITION TO THE CITY OF NEWPORT BEACH TO RENEW THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT We petition you to initiate special assessment proceedings to renew the Newport Beach Tourism Business Improvement District in accordance with the Property and Business Improvement District Law of 1994, Streets and Highways Code Section 36600 et seq., for the purpose of implementing programs described in the Management District Plan summary attached hereto as Exhibit A. Lodging Establishment Business Owner "�'j-TKf-.z Aoroi,1 r-iff Owner Repres ntative /Owner Name (printed) Title //1jY1i3 Owner /Representative Signature A complete copy of the Management District Plan will be furnished upon request. Requests for a complete copy of the Management District Plan should be made to: Gary Sherwin Newport Beach & Company 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 (949)719 -6100 IIN PETITION TO THE CITY OF NEWPORT BEACH TO RENEW THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT We petition you to initiate special assessment proceedings to renew the Newport Beach Tourism Business Improvement District in accordance with the Property and Business Improvement District Law of 1994, Streets and Highways Code Section 36600 et seq., for the purpose of implementing programs described in the Management District Plan summary attached hereto as Exhibit A. Lodging Establishment Business Owner Owner Representative/ wner Name (printed) Title Owner /Representative Signature D to A complete copy of the Management District Plan will be furnished upon request. Requests for a complete copy of the Management District Plan should be made to: Gary Sherwin Newport Beach & Company 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 (949)719 -6100 40 PETITION TO THE CITY OF NEWPORT BEACH TO RENEW THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT We petition you to initiate special assessment proceedings to renew the Newport Beach Tourism Business Improvement District in accordance with the Property and Business Improvement District Law of 1994, Streets and Highways Code Section 36600 et seq., for the purpose of implementing programs described in the Management District Plan summary attached hereto as Exhibit A. Lodging Establishment Business Owner UQ4�SSn�c��(�c�CJn lVc��v t1�tA,�N�S (1-(-4 � c' Owner Representative /Owner Name (printed) Owner /Representative Signature Title Date 01 A complete copy of the Management District Plan will be furnished upon request. Requests for a complete copy of the Management District Plan should be made to: Gary Sherwin Newport Beach & Company 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 (949)719 -6100 am 41 PETITION TO THE CITY OF NEWPORT BEACH TO RENEW THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT We petition you to initiate special assessment proceedings to renew the Newport Beach Tourism Business Improvement District in accordance with the Property and Business Improvement District Law of 1994, Streets and Highways Code Section 36600 et seq., for the purpose of implementing programs described in the Management District Plan summary attached hereto as Exhibit A. Lodging Establishment Owner Representative /Owner Name (printed) presentative Signature Business Owner gut 4A� Title (AI' )-D13 A complete copy of the Management District Plan will be furnished upon request. Requests for a complete copy of the Management District Plan should be made to: Gary Sherwin Newport Beach & Company 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 (949)719 -6100 42 PETITION TO THE CITY OF NEWPORT BEACH TO RENEW THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT We petition you to initiate special assessment proceedings to renew the Newport Beach Tourism Business Improvement District in accordance with the Property and Business Improvement District Law of 1994, Streets and Highways Code Section 36600 et seq., for the purpose of implementing programs described in the Management District Plan summary attached hereto as Exhibit A. Lodging Establishment Business Owner 1/�..AI I�C�Lf 1v� l�F�T� � LIso6 a16y Cunr� (/c(Iiu✓J3r C Owner Representative /Owner Name (printed) A complete copy of the Management District Plan will be furnished upon request. Requests for a complete copy of the Management District Plan should be made to: Gary Sherwin Newport Beach & Company 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 (949)719 -6100 43 PETITION TO THE CITY OF NEWPORT BEACH TO RENEW THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT We petition you to initiate special assessment proceedings to renew the Newport Beach Tourism Business Improvement District in accordance with the Property and Business Improvement District Law of 1994, Streets and Highways Code Section 36600 et seq., for the purpose of implementing programs described in the Management District Plan summary attached hereto as Exhibit A. Lodging Establishment Business Owner \ 1 � V6 1 Y�.�s'S) \1.J`.Sel f' 1 Owner Owne er Name (printed) Title fl, iier-lS Date A complete copy of the Management District Plan will be furnished upon request. Requests for a complete copy of the Management District Plan should be made to: Gary Sherwin Newport Beach & Company 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 (949)719 -6100 44 PETITION TO THE CITY OF NEWPORT BEACH TO RENEW THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT We petition you to initiate special assessment proceedings to renew the Newport Beach Tourism Business Improvement District in accordance with the Property and Business Improvement District Law of 1994, Streets and Highways Code Section 36600 et seq., for the purpose of implementing programs described in the Management District Plan summary attached hereto as Exhibit A. Lodging Establishment Business Owner Owner Representative /Owner Name (printed) Title Owner /Representative Signature "0j MQer /(- I'� -r`�- Date A complete copy of the Management District Plan will be furnished upon request. Requests for a complete copy of the Management District Plan should be made to: Gary Sherwin Newport Beach & Company 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 (949)719 -6100 45 PETITION TO THE CITY OF NEWPORT BEACH TO RENEW THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT We petition you to initiate special assessment proceedings to renew the Newport Beach Tourism Business Improvement District in accordance with the Property and Business Improvement District Law of 1994, Streets and Highways Code Section 36600 et seq., for the purpose of implementing programs described in the Management District Plan summary attached hereto as Exhibit A. Lodging Establishment Business Owner Owner Representative /Owner Name (printed) Title Owner /Representative Signature Date A complete copy of the Management District Plan will be furnished upon request. Requests for a complete copy of the Management District Plan should be made to: Gary Sherwin Newport Beach & Company 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 (949)719 -6100 46 EXHIBIT A MANAGEMENT DISTRICT PLAN SUMMARY Location: The City of Newport Beach. The NBTBID includes eight (8) lodging businesses located within the boundaries of the City of Newport Beach. The NBTBID shall include the Fairmont Newport Beach, the Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, the Newport Beach Marriott Hotel & Spa, the Radisson Newport Beach, the Balboa Bay Club and Resort (a.k.a., Balboa Bay Resort), the Newport Dunes Waterfront Resort and Marina, the Island Hotel Newport Beach, and any other hotel and resort business that may join the NBTBID in the future. Additional hotels and resorts that wish to pay the assessment and receive NBTBID services in the future may do so upon the approval of a majority of the then existing membership of the NBTBID, and through the execution of an agreement with the City approved by the City Council consistent with Property and Business Improvement District Law of 1994, Streets and Highways Code Sections 36600 et seq., as the same may be amended from time to time. Services: The NBTBID is designed to provide specific benefits directly to assessed businesses by increasing room night sales. The improvements and activities consist of sales marketing and direct sales programs to increase overnight tourism and market assessed businesses as tourist, meeting and event destinations, thereby increasing room night sales. These same improvements and activities are proposed for each year of the NBTBID's five or ten (5 or 10) year term. Budget: The total NBTBID annual budget for the initial year, and subsequent years, is anticipated to be approximately one point three three or two million dollars ($1,333,333 or $2,000,000). This budget is expected to fluctuate as room sales do, but is not expected to significantly change over the NBTBID's term. Cost: The annual assessment rate is two or three percent (2.0 or 3.0 %) of gross short -term (i.e., stays of thirty (30) calendar days or less) room rental revenue. Because programs will not be designed to attract certain stays, certain types of stays will not be assessed, as described in Section V(C) of the Management District Plan. Duration: The proposed NBTBID will have a five or ten (5 or 10) year term. The NBTBID assessment will be implemented beginning February 1, 2014, and will be in effect for five or ten (5 or 10) years through January 31, 2019 or January 31, 2024. After five or ten years, the petition and City Council hearing process must be repeated for the NBTBID to be renewed. Also, once per year beginning on the anniversary of the formation of the NBTBID, there is a 30 -day period in which assessed businesses paying more than fifty percent (50 %) of the assessments may protest and initiate a City Council hearing to terminate the NBTBID. 47 EXHIBIT A MANAGEMENT DISTRICT PLAN SUMMARY Management: The TBID committee of Visit Newport Beach, Inc. will serve as the NBTBID's Owners' Association. The Owners' Association is charged with managing funds and implementing programs in accordance with this plan, and must provide annual reports to the City Council. Boundaries 1 I i at Newport Beach City Limits 133 Fadisson Newport Beach Fairmont Newport Beach 73 Newport Beach_Marriott Bayview 48 CITY OF NEWPORT BEACH OFFICE OF THE CITY CLERK Leilani I. Brown, MMC December 13, 2013 Dear Newport Beach Tourism Business Improvement District Member On Tuesday, December 10, 2013 the Newport Beach City Council adopted Resolution No. 2013 -89, A Resolution Declaring its Intention to Renew the Newport Beach Tourism Improvement District (NBTBID). A copy of the Notice of Public Meeting and Public Hearing and Resolution No. 2013 -89 are enclosed. There are two more steps in the NBTBID renewal process. A public meeting on the renewal is set for January 14, 2014 at 7 p.m. at the Newport Beach Council Chambers, 100 Civic Center Drive, Newport Beach, CA 92660. That will be followed by a public hearing on January 28, 2014 at 7 p.m. at the aforementioned location. You are welcome to attend the meeting and /or the hearing to provide your comments on the NBTBID's renewal. Written comments may also be submitted in advance of the meeting and /or hearing to the City Clerk's Office, 100 Civic Center Drive, Bay E, Newport Beach, CA, 92660 or citvclerka..newoortbeachca.00v. A copy of the Management District Plan for the renewed NBTBID is on file and may be reviewed at the City Clerk's Office as well. If ultimately approved by the Newport Beach City Council on January 28, the NBTBID will be renewed and its term will expire on January 31, 2024. In addition, the new assessment will be three percent (3 %) of gross short -term room rental revenue (it is currently 2 %) and the Island Hotel Newport Beach will be added as a NBTBID member. Please note that the NBTBID renewal is a separate, but related process, to the NBTBID modification. Current NBTBID members will receive a separate letter and information from me, also dated December 13, that pertains specifically to the modification. Sincerely, k--Fx- Leilani I. Brown, MMC City Clerk Enclosures: Resolution No. 2013 -89 Notice of Public Meeting and Public Hearing 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92658 -8915 Telephone: (949) 644 -3005 • Fax: (949) 644 -3039 • www.newportbeachca.gov RESOLUTION NO. 2013 -89 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DECLARING ITS INTENTION TO RENEW THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT AND FIXING THE TIME AND PLACE OF A PUBLIC MEETING AND A PUBLIC HEARING THEREON AND GIVING NOTICE THEREOF WHEREAS, the Property and Business Improvement Law of 1994, . Streets and Highways Code Sections 36600 et seq., authorizes cities and counties to establish property and business improvement districts for the purposes of promoting tourism; and WHEREAS, the City Council created the Newport Beach Tourism Business Improvement District (NBTBID) by Resolution No. 2009 -21 on April 28, 2009; and WHEREAS, Visit Newport Beach (VNB) representatives, lodging business owners, and representatives from the City of Newport Beach (City) have met to consider the renewal of the NBTBID; and WHEREAS, Visit Newport Beach has drafted a Management District Plan (MQP) which sets forth the proposed boundary of the NBTBID, a service plan and budget, and a proposed means of governance; and WHEREAS, a majority of the lodging business owners subject to assessment under the NBTBID have petitioned the City Council to renew the NBTBID. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The recitals set forth herein are true and correct. Section 2: The City Council finds that the lodging businesses that will pay more than fifty percent (50 %) of the assessment proposed in the MDP have signed and submitted petitions in support of the renewal of the NBTBID. The City Council accepts the petitions and adopts this resolution of intention to renew the NBTBID and to levy an assessment on certain lodging businesses within the NBTBID boundaries in accordance with the Property and Business Improvement District Law of 1994. Section 3: The City Council finds that the MDP satisfies all requirements of California Streets and Highways Code Section 36622. Section 4: The City Council declares its intention to renew the NBTBID and to levy and collect assessments on lodging businesses within the NBTBID boundaries pursuant to the Property and Business Improvement District Law of 1994. Section 5: The boundaries of the NBTBID shall be the boundaries of the City of Newport Beach. Please see the attached map, incorporated herein as Exhibit A. The renewed NBTBID includes eight (8) lodging businesses located within the boundaries of the City of Newport Beach, and other hotels and resorts that may join the NBTBID in the future. The NBTBID shall include the Fairmont Newport Beach, the Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, the Newport Beach Marriott Hotel & Spa, the Radisson Newport Beach, the Balboa Bay Club and Resort (a.k.a., Balboa Bay Resort), the Newport Dunes Waterfront Resort and Marina, the Island Hotel Newport Beach, and any other hotel and resort business that may join NBTBID in the future. Additional hotels and resorts that wish to pay the assessment and receive NBTBID services in the future may do so upon the approval of a majority of the then existing membership of the NBTBID, and through the execution of an agreement with the City, approved by the City Council, after a noticed public hearing consistent with California Streets and Highways Code Sections 36623 and 36637, as the same may be amended from time -to- time. Section 6: The name of the renewed district shall remain Newport Beach Tourism Business Improvement District. Section 7: The annual assessment rate is three percent (3.0 %) of gross short-term (stays less than thirty (30) calendar days) room rental revenue. Because programs will not be designed to attract certain stays, certain types of stays will not be assessed, as described in the MDP. Section 8: The assessments levied for the NBTBID shall be applied to provide specific benefits directly to assessed businesses by increasing room night sales. Marketing, sales promotions, advertising, and communications will increase overnight tourism and market assessed businesses as tourist, meeting and event destinations, thereby increasing room night sales. Funds remaining at the end of any year may be used in subsequent years in which NBTBID assessments are levied as long as they are used consistent with the requirements of this resolution and the MDP. Section 9: The NBTBID will have a ten (10) year term unless renewed or terminated pursuant to the California Streets and Highways Code. Section 10: Bonds will not be issued. Section 11: The time and place for the public meeting to hear testimony on renewing the NBTBID and levying assessments is set for January 14, 2014, at 7:00 p.m., or as soon thereafter as the matter may be heard, at the Council Chambers located at 100 Civic Center Drive, Newport Beach, CA 92660. Section 12: The time and place for the public hearing to renew the NBTBID and levy the assessment is set for January 28, 2014, at 7:00 p.m., or as soon thereafter as the matter may be heard, at the Council Chambers located at 100 Civic Center Drive, Newport Beach, CA 92660. The City Clerk is directed to provide written notice to the lodging businesses subject to assessment of the date and time of the hearing and to provide that notice as required by California Streets and Highways Code Section 36623. Section 13: At the public hearing the testimony of all interested persons for or against the establishment of the NBTBID may be received. If, at the conclusion of the public hearing, there are of record written protests by the owners of the lodging businesses within the proposed NBTBID that will pay fifty percent (50 %) or more of the estimated total assessment of the entire NBTBID, no further proceedings to renew the NBTBID shall occur for a period of one (1) year. Section 14: The complete MDP is on file with the City Clerk and may be reviewed upon request. Section 15: The City Council finds the adoption of this resolution of intention is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 16: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared invalid or unconstitutional. Section 17: This resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify the vote adopting this resolution. ADOPTED this 10th day of December, 2013 ATTEST: �Lw e I N=%--/ Leilani I. Brown, City Clerk G� Keith D. Cuffy, Mayor IEXHIBiI' A District Boundaries i r r R 1 � ,5� t iy �q PEE9,n2 t44V�P�iPn �m Newport Bee ach id City Limlta � na a :i 55 Ca Balboa Bay Club and Resort 4�wpOAr 9q Y PqC/% �CEgN -IV TAS UPPER NEWPORT BAY 133 Radisson Newport Beach 0 Fairmont Newport Beach 73 Newport Beach Marriott Bayview 3 Y C1 P� 9 R GO , Island Hotel Newport Beach. �L Hyatt Regency Newport Beach o ®0 Newport Beach Marriott Hotel & Newport Dunes Waterfront Resort & Marina 0 �I 3 Y C1 P� 9 R GO , Island Hotel Newport Beach. �L Hyatt Regency Newport Beach o ®0 Newport Beach Marriott Hotel & Newport Dunes Waterfront Resort & Marina 0 STATE OF CALIFORNIA } COUNTY OF ORANGE CITY OF NEWPORT BEACH } 1, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing resolution, being Resolution No. 2013 -89 was duly and regularly Introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 10'h day of December, 2013, and that the same was so passed and adopted by the following vote, to wit: Ayes: Gardner, Petros, Hill, Selich, Henn, Mayor Curry Nays: Daigle IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 11t" day of December, 2013. ,&-I City Clerk Newport Beach, California (Seal) NOTICE OF PUBLIC MEETING AND PUBLIC HEARING CONCERNING RENEWAL OF THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT AND LEVY OF AN ASSESSMENT ON CERTAIN LODGING BUSINESSES WITHIN THE DISTRICT NOTICE IS HEREBY GIVEN that on December 10, 2013, the City Council of the City of Newport Beach ( "City ") adopted a Resolution of Intention to renew the Newport Beach Tourism Business Improvement District ( "NBTBID ") and to levy an assessment on certain lodging businesses within the NBTBID as set forth in the enclosed Resolution of Intention. NOTICE IS HEREBY FURTHER GIVEN that at 7:00 p.m., or as soon thereafter as this matter may be heard, on January 14, 2014, at the City of Newport Beach Council Chambers, 100 Civic Center Drive, Newport Beach, CA 92660, a public meeting shall be held pursuant to Government Code Section 54954.6 to allow public testimony regarding the renewal of the NBTBID and the levy of assessments therein as set forth in the enclosed Resolution of Intention. NOTICE IS HEREBY FURTHER GIVEN that at 7:00 p.m., or as soon thereafter as this matter may be heard, on January 28, 2014, at the City of Newport Beach Council Chambers, 100 Civic Center Drive, Newport Beach, CA 92660, a public hearing shall be held pursuant to Government Code Section 54954.6 at which time the City Council proposes to renew the NBTBID and to levy the proposed assessment as set forth in the Resolution of Intention and Management District Plan. Boundaries: The proposed NBTBID includes eight (8) lodging businesses located within the boundaries of the City of Newport Beach. The NBTBID shall include the Fairmont Newport Beach, the Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, the Newport Beach Marriott Hotel & Spa, the Radisson Newport Beach, the Balboa Bay Club and Resort (a.k.a., Balboa Bay Resort), the Newport Dunes Waterfront Resort and Marina, the Island Hotel Newport Beach, and any other hotel and resort business that may join the NBTBID in the future. Additional hotels and resorts that wish to pay the assessment and receive NBTBID services in the future may do so upon the approval of a majority of the then existing membership of the NBTBID, and through the execution of an agreement with the City approved by the City Council consistent with the Property and Business Improvement District Law of 1994, Streets and Highways Code Sections 36600 et seq., as the same may be amended from time to time. Assessment:The annual assessment rate is three percent (3.0 %) of gross short-term (stays less than thirty (30) calendar days) room rental revenue. Because programs will not be designed to attract certain stays, those certain types of stays will not be assessed, as described in the Management District Plan. Budget: The total NBTBID annual budget for the initial year of its ten (10) year operation is anticipated to be approximately two and one -half million dollars ($2,500,000). This budget is expected to fluctuate as room sales do, but is not expected to significantly change over the NBTBID's ten (10) year term. Page i of 2 Purpose: The NBTBID is designed to provide specific benefits directly to assessed lodging businesses by increasing room night sales. Marketing, sales promotions, advertising, and communications will increase overnight tourism and market the assessed lodging businesses as tourist, meeting and event destinations, thereby increasing room night sales. Collection: The NBTBID assessment will be implemented beginning February 1, 2014 and will continue for ten (10) years through January 31, 2024. The City, or its designee, will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the NBTBID. Protest: Any owner of a lodging business within the proposed NBTBID that will be subject to the assessment may protest the renewal of the NBTBID. If written protests are received from the owners of lodging businesses in the proposed NBTBID who represent fifty percent (50 %) or more of the estimated annual assessments to be levied, the NBTBID shall not be renewed and the assessment shall not be imposed. You may mail a written protest to: Office of the City Clerk City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660 You may also appear at the public hearing and submit a written protest at that time. Information: Should you desire additional information about this proposed NBTBID or assessment, please contact: Mr. Gary Sherwin Visit Newport Beach 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 (949)719 -6100 Dated: 1 ?-113 //0 �-� - FX Leilani I. Brown City Clerk Page 2 of 2 Debra L. Snavely General Manager Newport Beach Marriott Hotel & Spa 900 Newport Center Drive Newport Beach, CA 92660 Robert Leck General Manager Radisson Newport Beach 4545 MacArthur Boulevard Newport Beach, CA 92660 Karl Kruger General Manager Fairmont Newport Beach 4500 MacArthur Boulevard Newport Beach, CA 92660 Andy Theodorou General Manager Newport Dunes Waterfront Resort & Marina 1131 Back Bay Drive Newport Beach, CA 92660 Kandee Anderson General Manager Newport Beach Marriott Bayview 500 Bayview Circle Newport Beach, CA 92660 Donald Stamets General Manager Island Hotel Newport Beach 690 Newport Center Drive Newport Beach, CA 92660 Daniel Kuperschmid General Manager Hyatt Regency Newport Beach 1107 Jamboree Road Newport Beach, CA 92660 Dieter Hissen General Manager Balboa Bay Resort 1221 West Coast Highway Newport Beach, CA 92663