BID court battle starts Thursday
The city and three businessmen are expected to battle out legal differences Thursday over the business improvement district formed in February to promote South Lake Tahoe.
A court hearing is set at 4 p.m. in Department 3 at the El Dorado County Superior Court in which South Shore attorney Dale Sare will argue the city-spawned tourism promotion BID was allegedly conceived illegally and is unconstitutional.
The complaint filed July 18 against the city takes issue with the geographic boundaries of the BID, its classification as a fee versus a tax requiring two-thirds voter approval and businesses alleged as unaffected by tourism paying into the pool. Sare is working on behalf of Fox Station’s John Cefalu, Dr. Patrick Martin and Lou Pierini of Lake Tahoe Coin and Jewelry.
“The purpose of a business improvement district is to revitalize a city’s blighted core,” the complaint reads. “The city has treated business unequally.”
But City Attorney Catherine DiCamillo filed a response Monday that clarifies all businesses are eligible because the “benefit can be direct or indirect” and that BID law does not prohibit having a citywide boundary.
A statewide “tourism assessment fee” enacted in 1995 collects fees from lodging, restaurants, attractions and retail establishments deemed impacted by tourism, according to the California Travel and Tourism Commission
DiCamillo also plans to compensate for lodging’s first-year exemption by paying $65,000 into the BID. She will also bring forward two cases including Jarvis versus the city of San Diego declaring the assessment does not need voter approval.
The civil injunction seeks to stop the city from collecting the assessments attached to business license renewals – which were mailed to company owners citywide a few weeks ago – and redistributing the funds estimated to amount to about $350,000 in the first year.
Thereafter, the figure could amount to at least three times more when the South Lake Tahoe lodging community – consisting of hotels, motels and vacation home rentals – chips in the $1.50 per room, per night it receives from guests.
This has represented a major point of contention for months of the BID’s formation.
“The motels benefit the most in bringing tourists to this city, however, they are completely exempted,” the complaint adds.
Businessman Cefalu, who along with Martin serves on the BID board that steers the assessment district, called this sticking point one that makes the BID illegitimate. The BID board will discuss the lawsuit during its Wednesday morning meeting at 7 a.m.
Chairwoman Julie Threewit said Monday the progress of the BID is “business as usual unless a court tells us otherwise.”
“I think we had to do it because there was so much dissension,” Cefalu said. “The matter now is in the court’s hands.”
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