Proponents: BID a small price to pay
A departure from a near-rancorous South Lake Tahoe City Council meeting on the matter a few weeks ago, a panel outlined to an attentive audience Tuesday the need and benefits of forming what would be called the Business Improvement District for tourism marketing to survive in an arena that’s become highly competitive in the last few years.
More than 35 people showed up at Inn By the Lake for the educational workshop sponsored by the South Lake Tahoe Chamber of Commerce to hear more about the plan, which calls for the assessment of city businesses to pay an annual fee ranging from $30 to $3,000. According to a consultant’s formula, 72 percent of the businesses were estimated to fall in the low end of the scale. But this is yet to be decided by a BID board of directors to be appointed by the city.
Those in favor contend it’s a small price to pay in trying to restore plummeting marketing funds to the Lake Tahoe Visitors Authority and chamber that have dropped from about $1 million in 2002 to $225,000 today on the California side.
The city was forced to reduce marketing subsidies for this year’s fiscal budget at a time of massive cuts as one of four entities supporting the LTVA. The Tahoe Douglas Visitors Authority provides about 40 percent of this pool.
“The bottom line was, it was marketing dollars versus (city) police, fire and snow removal,” said South Shore attorney Dennis Crabb, who drafted the BID proposal.
Crabb was one of the panelists along with Executive Director Duane Wallace; Pradip Patel of Super 8 Motel; Eric Eymann of the Station House Inn, Carol Chaplin of Aramark/Zephyr Cove Resort; Missy Springer of Camp Richardson Resort; and Ken Daly of Area Transit Management.
The panelists fielded a slew of questions ranging from – “What would happen if the fee isn’t paid?” to “Are the LTVA and chamber guaranteed all the money?” The former would be handled the same way the city enforces businesses failing to pay their license fees. The latter is a resounding no. The BID board would make that determination. The split of marketing funds have traditionally been 15 percent to the chamber and 85 percent to the LTVA.
A few people asked why lodging establishments were exempt and allowed to use pass-through money they collect from their guests.
To this, those who run motels and hotels countered the $1.50 they’ve agreed to collect after the law expires is still considered a business expense.
Eymann reported he pays $30,000 in TOT.
“I’d rather pay (the cap of) $3,000. But we’re willing to hurt ourselves by doing this,” he said.
The hotel managers also noted individual marketing dollars spent by the properties ranging from $80,000 to $156,00 a year, Springer reported at the urging of Pat Ronan of Lakeshore Lodge.
“It’s important we get people in town. Not everybody in the world knows about Lake Tahoe,” she said.
The business group pointed out a few safeguards in the plan of which a growing opposition have taken issue with calls and letters to the Tahoe Daily Tribune.
Crabb aimed to ease the minds of those who are unsure the marketing money would get spent by the city elsewhere. The action would incur “substantial penalties and litigation.”
Crabb mentioned the most critical component as the annual review. Every year, the 4,800 businesses will vote on the effectiveness of the BID plan and the 15-member board.
He insisted the debate over the issue has been a healthy one that was anticipated.
The attorney who specializes in local government cited Truckee, which endured four years of hearings and numerous studies before coming to an agreement on its BID.
“Every BID I’ve worked on has had protest,” he said.
Those in opposition have called the formula unfair because the votes are based on gross annual revenues. They have also objected to how quickly the plan was put together.
But proponents contend the proposal has been discussed in various marketing and business meetings that are open to the public. These meetings seldom attract a crowd.