Lodging support wanes for business improvement district
August 11, 2005
Support may be slightly waning to the tourism promotion business improvement district the South Lake Tahoe lodging community helped develop – unless things change quickly.
Illustrating a frustrating few weeks filled with a BID legal challenge, turbulent board meeting and diminishing summer season, the Lodging Association decided Thursday in its meeting to issue a letter to the city and 11-member business improvement district requesting more BID board representation for next year’s money – or else.
“Unless there’s a positive representation for lodging, we’ll be going against the BID (for next year),” Pat Ronan of Lakeshore Lodge said before making a motion.
The advocacy group may deny turning over to the BID coffers the $1.2 million it collects from hotel guests or take that money to form its own BID next year.
The controversial BID was formed to fund tourism efforts, when marketing subsidies amounting to $753,000 were cut from the Lake Tahoe Visitors Authority and South Lake Tahoe Chamber of Commerce coffers.
Two people on the BID board, Pradip Patel and Ed McCarthy, serve in the lodging category. In the restaurant category, Eric Eymann runs the Station House Inn while Missy Springer works for Camp Richardson Resort.
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But that’s not enough for the industry with the biggest contribution but little understanding from two other BID board members suing the city over the district formation, lodging contends.
The scenario has apparently stalled the business at hand and led to high emotions at the last BID board meeting. Despite spearheading a lawsuit against the BID with businessman Lou Pierini, plaintiffs John Cefalu and Dr. Patrick Martin have remained on a BID board that has been meeting since April with no event or group funded yet.
Despite lodging’s unanimous vote to explore doing its own thing, Duane Wallace – South Lake Tahoe Chamber of Commerce executive director – cautioned the group to rethink the move before proceeding.
“They could win if you back out,” he said at the meeting.
The $1.2 million lodging collects is broken down to $1.50 per room, per night per Measure Z. The 2002 ballot initiative – which was added to the 10- and 12- percent tax – expires in Oct. 2006. The lodging community has agreed, in spirit, to continue collecting the money to promote the tourism-driven town.
But if the lodging money is pulled, the BID coffers would be substantially reduced by about four-fifths to around $300,000 annually. Even that money has been difficult for the city to collect this year, as finance has received several calls from business owners asking whether they have to pay the fees ranging from $30 to $3,000.
The Lodging Association helped craft the original proposal with the chamber and attorney Dennis Crabb, who addressed the group and received its endorsement for his El Dorado County supervisor run.
After the meeting, Crabb confirmed the association could pull out of the BID because there’s no binding agreement between the city and lodging, but other measures could also be taken to head off BID opposition.
The attorney predicted the El Dorado County Superior Court lawsuit may fail by fall anyway. The plaintiff’s attorney, Dale Sare, is building a case and it could come to a head by October. If a judge asks for it, the city may even decide to fix part of the BID without having it thrown out.
No matter what the perceived outcome – two of five council members reached Thursday urged the group to maintain its support, as their own commitment to the BID hasn’t changed.
Councilman Mike Weber, who pledged his continued dedication to the BID, pointed out how the plaintiffs have lost their temporary restraining order and preliminary injunction in court that would have prohibited the city from collecting the money. Judge Suzanne Kingsbury ruled a week ago the money can be collected but not spent, prompting both sides to see victory.
“I can see lodging getting nervous, but I don’t see where they need more representation on the board. There is no way (the plaintiffs are) going to prevail in this lawsuit,” Weber said.
Councilman Ted Long agreed in some respect, calling the continued legal threat a “minor thorn for a moment.”
“I think people should calm down and let things unfold,” he said.
There’s a difference in opinion in the predicted outcome.
Cefalu recommended Thursday the city start over.
“Plain and simple, this BID process was all wrong. Unless there’s a settlement, I can’t see the court letting go of the money (the city holds) anytime soon,” he said.