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2013, 10-16 minutes MINUTES Spokane Valley Lodging Tax Advisory Committee Wednesday, October 16, 2013, 8:30 a.m. Spokane Valley Council Chambers 11707 E. Sprague Avenue, Spokane Valley, Wa. 99206 _____________________________________________________________________ __ Attendance: Lodging Tax Advisory Committee Members: Staff: Chair: Councilmember Ben Wick Mark Calhoun, Finance Director Member Herman Meier, Spokane Valley Heritage Museum Erik Lamb, Deputy City Attorney Member Keith Backsen, Visit Spokane Sarah Farr, Accounting Tech Assistant Member Jeff Fiman, Sterling Hospitality/Quality Inn Chris Bainbridge, City Clerk Member Lee Cameron, Mirabeau Park Hotel ------------------------------------------------------------------------------------------------------------------------------- At 8:30 a.m., the meeting was called to order by Lodging Tax Advisory Committee Chair and City Councilmember Ben Wick. After welcoming everyone to the meeting, Chair Wick explained that the s presentations, followed by question and answer opportunity from the Committee Members to those presenting, and that there will be no public comments today. Mr. Wick also noted that in checking with the legal department, there are no conflict of interest issues among Committee members. Chair Wick said that this matter will come as an administrative report before the City Council October 29, 2013, and a motion will be made at the December 10 Council meeting to allocate funding, at which time there will be opportunity for public comment. Committee members then introduced themselves. City Finance Director Mark Calhoun gave a brief overview of some of the legislative changes this year; and said two of the primary changes are (1) previously allowed, but no longer allowed and now eliminated is the use of lodging tax revenues to fund capital expenditures of tourism-related facilities owned or operated by non-profit organizations; and (2) tourism marketing was specifically added as an allowable use. Mr. Calhoun noted the Council established goals and priorities for the use of lodging tax revenue, and he briefly went over those goals as included on his October 10, 2013 Memorandum, included in the committee packet. Mr. Calhoun also talked about the included bar chart showing monthly lodging tax receipts from January 2004 through the present, which he explained gives a sense of how these funds have been coming in over the years; and he noted revenues were strong in 2012 and a little stronger in 2013; he also discussed the City fund 105 and the chart showing the revenues, expenditures and changes in that fund balance budget. Mr. Calhoun said $490,300 in revenues is expected in 2014, and he showed on that chart, the $30,000 set-aside amount for tourism promotion to CenterPlace. Mr. Calhoun said in looking at the figures, it appears we will over spend but we will actually be using some of the funds in the cash flow reserves. The charts with the yellow columns presentations are completed, he will ask Committee members to fill in their recommended award and turn ask for a specific motion for specific awards, which will then be forwarded to Council October 29 as an administrative report, and then to Council at their December 10 meeting for final determination of funding allocations. The reason for the delay between now and December 10, Mr. Calhoun explained, is that state law requires a 45 day wait from the date of determination to the award. Mr. Calhoun again mentioned the $30,000 set-aside for CenterPlace, and said it has been determined that if there were a change in use, CenterPlace would also need a recommendation from this committee; and explained that the $30,000 represents an amount taken historically over several years, and said in past LTAC Meeting Minutes of October 16, 2013 Page 1 of 8 years, it had been as much as $90,000; but more recently was $30,000, and based on that explanation, Mr. aving this stay as historically allocated. There were no objections from other Committee members in that regard. Deputy City Attorney Lamb added that recommendation will be coming to Council, and under the new law, Council can only approve or disapprove the recommendation, and said this committee must present as a collective group, specific recommendations for funding. Applicant Presentations 1 Visit Spokane - Cheryl Kilday, President & CEO Ms. Cheryl Kilday highlighted some of the items in her application; said they want to make sure they are generating leads for group travel such as conventions, and to people who are influencing people to travel; and that all those different market segments of audiences are the ones they want behalf; said she wants to continue working with the City Staff to promote key features for developing deliverables, such as figuring wanted to make sure the committee is aware that Visit Spokane will be launching a mobile visitor center and will be moving out of their current space and into River Park Square; she mentioned the possibility of having a kiosk in the Valley Mall Concerning economic impacts and visitor spending, as noted in the packet material, Ms. Kilday said they are responsible to help generate those in Spokane Valley; and said their numbers in Spokane County have been significant, and County-wide, according to 2012 Dean Runyan report, visitors spent over $870 million; she spoke of room night occupancy in Spokane Valley and influence resulted in an estimated $42,361 in visitor expenditures. Ms. Kilday referenced her October 15, 2013 letter which she distributed to committee members, which explains about Visit Spokane and the Spokane Sports Commission working together to enter into a long-term funding agreement of three to five years, and which letter encourages the Committee to consider funding support for multiple years; said with the two agencies together, the calculated the average funds received from the City of Spokane Valley equates to about 75% of the lodging tax funds. Brief questions and answers included mention of social medial outreach; regional on-line advertising, Facebook, etc. to help build attendance at events. Chair Wick brought up the compression/ripple effect and how that might change with the new downtown hotel. Ms. Kilday said compression is real, but that is not what their application is based on; she said their application is based on what they are doing they are not applying for funding based on compression. Chair Wick asked if photo opportunities were included in the allocation and Ms. Kilday said they will work with the City on the kind of images to capture, and said they are already working with members from our planning department. Mr. Fiman noted that the request is $100,000 greater than last year and he asked what Ms. Kilday feels that will be used for the greatest impact. Ms. Kilday said things such as retail, leisure travel, group sales are all a part uested, and feels leisure travel remains strong; that 2013 was a slow and weak convention year, and said she feels Spokane Valley needs that leisure push. 2 Evergreen Regional Volleyball Court Expansion Evergreen Region Office Manager Lindsay Walter e Park Sand Volleyball Court; she said the Evergreen Region Volleyball Association is affiliated with USA Volleyball, and is one of the largest geographic regions within USA Volleyball and that they are most known for their junior club activities, although they do a lot of adult activities as well. She explained that to accommodate more teams and to draw teams from Montana, the Tri-Cities, and other areas for regional tournaments; that they are working with Spokane Valley in developing the master plan and to start the LTAC Meeting Minutes of October 16, 2013 Page 2 of 8 planning process for the facility to see how it could be structured and where to put the courts. She mentioned they have also worked with the Sports Commission. Sports Commission representative Paul Christiansen said Park facility and is a former player; and feels people would travel here to use the facility. Question and answers included marketing efforts question with comment from Eric Sawyer of the Sports Commission who indicated he would address that during his presentation. There was a question about anticipated number of teams coming and Ms. Walter explained that the number would depend on the number of events; adding that the junior teams of course bring in family members that contributed to booked hotel nights. Concerning a timeline for the facility to be built, Ms. Walter said she has been working with the City of Spokane Valley and said they hope to get the funds to start the process to develop the master plan, and would anticipate construction beginning spring 2014; and said they could start seeing hotel rooms booked in 2014 if the facility is ready by summer 2014. that construction of courts, and once appropriated, it would be able to be used, working with Mr. Stone and Mr. Jackson, to determine exactly where, when and how. Chair Wick asked about how this group would report the necessary data to the state, such as number of nights generated, and said the numbers were not in the application. Ms. Walker replied that it is difficult to estimate now as there is a limit on how many teams can get in, making it difficult as well to determine how many more teams would be able to participate. Mr. Calhoun noted that one of the significant changes in the law requires applicants to provide this information at the point of application, and to report actual numbers later. Regarding the requirements to have estimates, Chair Wick asked Ms. Walker about their best guess, to which she replied this year they had 16 teams and each tournament has about four teams coming from Montana or the Tri- Cities; she said they did not ask those participants if they had a hotel room and said it would be difficult to determine as some stay with family and friends. Her assistant Paul Christiansen said he estimates 48 teams; plus doubles, and that they tend to share four people to a room. Mr. Fiman asked if 50 room nights is a close estimate, and Ms. Walker said there would not be that many. Mr. Meier asked if the funding request is just for planning and Ms. Walker and Mr. Christiansen concurred that it is. 3 Spokane County Fair & Expo Center Interstate Fair Marketing they had record breaking attendance at the concerts; said she seeks funding to continue to enhance the Fair attractions; that in the last five years they have built on the Fair, and she estimated exhibitors put about 1,000 room nights in the community; said the band and others had fan club groups adding to the overnight stays; said they are asking for funds to buy more media and to attract people from further away. Ms. Gurtel said she is the only marketer for the fair; and in response to how funds were used last year, she said the majority of funds were for entertainment and marketing in the outlaying areas. She was also asked about growth over the years, and Ms. Gurtel said based on individual and food vendor revenues, they estimate about a 5% increase each year. Mr. Fiman said he has seen an increase in room nights over the years as well. 4 Spokane County Fair & Expo Center Expo Conference Facility Ms. Gurtel said this request is to enhance the amenities in the existing conference room, which is about 3,000 square feet; said that room is very - working with a sponsor to get it carpeted as it is just concrete now; and said they are requesting a ceiling- mounted projector with drop down screens; and said they would be saving money by working with a County component. She added the room is used for seminars by such national companies as Sears and Toyota; and having these amenities would afford more opportunities to hold mid-week events. In response to a question about the current use, Ms. Gurtel said the room is used about 40 times a year, and feels with the enhancements, they could add another 20 activities annually. LTAC Meeting Minutes of October 16, 2013 Page 3 of 8 5 Spokane County Fair & Expo Center Interim Events Marketing for 2014 Ms. Gurtel explained that the purpose of this request is to help market interim events; that they had an opportunity in the past when they helped with the Good Guys events; said these events are a huge economic impact to the community and she is excited to have a venue to help enhance ad efforts. For 2013, she explained they used about $4,000 to help advertising, and said they are the only community doing that; said she sees a lot of growth in the interim events with people coming from outside the region, and they want to get the word out like the Custer Craft Show and while there, make a day of it while in the community. A question from Chair Wick brought clarification from Ms. Gurtel that they seek $8,000 for this effort, and said they are themselves enough credit for generating room nights. 6 Valleyfest Valleyfest Executive Director Peggy Doering thanked the Board for the opportunity to request funding for the 2014 Valleyfest event; said next year Valleyfest will turn 25; she mentioned some of the past funding of the projected grant to promote Valleyfest. Ms. Doering also explained that this year they partnered with the Spokane Valley cyclists and drew over 277 registered cyclists from the region, with about 7.5% from out of the area or over 50 miles away, and said they anticipate that would occur again in 2014. She said they also had their first Triathlon with 60 registered participants; she mentioned other new events including the walk for Downs Syndrome with 520 registrations; and said they now have three recreational events, with the 5 and 10k run having 21% participants from out of town; she said they had over 200 sponsors were local, regional and national, and she read the list of those companies. Valleyfest Board President Rick Wilhite explained that they had an economic survey conducted last year in a collaborative effort with Mr. Larry Davis and Eastern Washington University School of Business; and Ms. Doering said they used several methodologies and tter; said based on volume of 30,000 attendees at Valleyfest and mean spending for out-of-town tourists at $188, that means about 2,820 people travelled more than 50 miles to attend so that 2,820 would on average, spend $188 each on lodging and food during their stay, and applying the economic multiplier of 1.3, which is the effect of the money continued to be spent in the area, that means over $600,000 total economic impact originating from tourists visiting from 50+ miles; all as contained in her packet material. She added that when local and day trip visitors are included, the economic impact jumps to nearly $1.5 million, and said she feels the data supports the amount of the requested funds. Mr. Cameron asked how much the City of Spokane Valley funded them through the economic development grant; and Ms. Doering replied Valleyfest received $24,000 for 2014. Mr. Cameron said he struggled with some of the analysis of the survey; said their hotel carefully tracks guests and they had none associated with Valleyfest, for ten years in a row. Ms. Doering responded that she believes his hotel accounted for approximately ten rooms this year; she said the Shriners informed her they stayed in Mr. parade; but they were also in town as part of their original contract, so if his guests where members of the Shriners, they might not have indicated they were also here as grand marshals for the parade. Mr. Cameron countered that his motel offers a special rate in order to identify those who stay for Valleyfest, and said he is not able to state that the numbers substantiate the figures indicated by the survey; and added he is pleased to see the event growing with sponsorships, but struggles with the room night calculation. Ms. Doering mentioned there were problems with the Visit Spokane site and said she will meet with them about that, adding that all hotels were listed on the Valleyfest website. Mr. Fiman said neither the Quality Inn nor the Holiday Inn Express had any guests for the entire Valleyfest weekend as the guests were asked their purpose in LTAC Meeting Minutes of October 16, 2013 Page 4 of 8 coming to town, and he said no one said it was to attend Valleyfest, even though he had a special rate for those attending for that purpose; said he supports the community event but questions if this generates the amount of room nights they need and expressed his concern about return on investment. Ms. Doering said it was for these reasons that they asked for economic development study; said the subtitles look at the hotel side as well as the economic development side; that the grant application adheres accompanying shopping and dining; she said the Valley Mall was a sponsor this year and they saw an increase in sales and dining, which are some of the combination factors; said the scope of work includes the goal to expand to other areas and said Lewiston area saw an increase in ads. Mr. Backsen mentioned that they too have been tracking room nights and found 25 room nights through the housing system tied to the Downs Syndrome last year; but this year saw only six rooms. Ms. Doering said her Board has not had an opportunity to re-cap meetings they have held in the past; however, last year they evaluated the goals to determine what could be added to attract people and determined a marathon as a possibility; she said she can see potential growth if they are able to advertise earlier to specific target areas; and in looking at the Council goals and objectives and at what group of people are missing, they have determined there are lots of potential activities for young families, but need to attract more in the age group of 10-15, which of course she explained, would be coming with parents and other family members, and said she and her Board are always open to ideas. 7 Spokane Sports Commission ; said they would like to focus on making sure events specifically occur in the Valley, but said there are not a lot of sports facilities within the City limits, adding that he realizes there is some influence with Plantes Ferry and the HUB. Mr. Sawyer said 24,000 hotel stays occurred this year as a result of sports activities, which he said brings about 13,000 visitors into the Valley, and said those are the numbers they can track and the figures do not include the fan base. Mr. Sawyer said he sees the nationwide growth as a result of the sports traveler; said their job is to get their piece of that, and to work to grow sports in the Valley, but said it comes down to facilities. He said they had several historic and successful events like the Eric Anderson memorial cross- country event with over 2,000 runners compared with the first year of that event with over 200 runners; said their long-term strategy is to create more events and said there is a need to invest in sports facilities, and that our area needs to catch up with cities like Yakima and the Tri-Cities, and the challenge is how to pay for the events; said he is working with the County to introduce legislation next year to identify some funding resources to put back into our community to improve facilities, including the sand volleyball facilities. Mr. Meier asked about the City of Spokane only giving $40,000 where as we gave $150,000; and Mr. Sawyer said they collect about $200,000 of lodging tax from the Public Facilities District. Concerning multi-year funding, Mr. Sawyer said they are making multi-year commitments with funds for those future commitments. At 10:20 a.m., Mr. Wick called for a ten-minute break. The meeting reconvened at 10:30 .a.m. 8 Spokane Valley Heritage Museum Museum Director Jayne Singleton explained that the museum has served the community and tourism for over nine years; that they are well established, have annual events, and in 2012 generated 61 room nights. She said everything they do is a captured event since they have a gated entry point and conduct surveys on visitors to indicate where their visitors are from and where they are staying; she said they have exhibits like the civil war and the Titanic to attract a broad range of people. Ms. Singleton said they plan to have a Smithsonian exhibit in the future; said the Travel Riders Association contacted her last week and are planning a visit this year to market to TV, radio and newsprint outside this area. Mr. Bill Zimmer, Board Member and museum volunteer, said the visitor sign-in log LTAC Meeting Minutes of October 16, 2013 Page 5 of 8 from 2012 showed visitors from 23 different states and several different countries; and many times when people visit the museum, they ask about other tourist attractions in the area. Ms. Singleton added that the museum was just informed they have been selected to be recognized for their contribution to the community and will receive that recognition at the next Council meeting. In response to a question from Mr. Meier, Ms. Singleton said the numbers in the application are actual numbers for 2012 and 2013 and not estimates, but of course the 2014 numbers are projections based on previous data. Ms. Singleton also mentioned they are going to add another building to go behind the current museum. 9 Friends of the Centennial Trail Executive Director Loreen McFaul explained that she just started her position in January, replacing Kay Turner; said that when she started in January she was surprised with the tourism piece of the trail which was really catching up in the winter; and which kept her busy over the summer; she said they have included the sale of maps on their website and around the region; that the river map is the only official map that exists for the trail and they charge $5.00 for this map; she said the Board was futuristic in their thoughts in charging for the map as the goal is to be very green, and they charge for the maps because they guide, and she distributed a map to each committee member. Ms. McFaul said this map version is already out dated as the Kendall Yards is now a solid red line; she said she would like to see these maps mailed around the country, and that they have determined people are coming early and staying a day late; and said people seek out the trial when visiting our region. Ms. McFaul said this trail is above par and is an amazing trail with contours following the river; said it is a huge recreational player with a potential $30 million regional economic pact; said about 5 to 8% of users are commuting to and from work by bike or foot; and said they are already encouraging people to come early; that there is an opportunity to highlight partner hotels, restaurants, retailers etc. on the map in order to enhance marketing of leisure travel and further seize an opportunity already existing; said they need some seed money to get this started, and she added she is the only employee of Centennial Trail. Mr. Cameron asked her how Visit Spokane works in her plans for a partnership; and Ms. McFaul said the partnership includes trying to enhance what already exists; she said no hotels have been contacted; that Visit Spokane makes a charitable contribution to their program; that she sees her present request as a one-year request as she hopes to launch partnerships; that once she gets the graphic design and marketing pieces together, said she feels the project will be self- generating; and said she plans to tie this to the bike swap and to harness her efforts with the local cycling community; adding that the website was just launched this summer. 10 Liberty Lake Rotary Club Ms. Mandy De RIM Ride, is a fundraising bike ride project which includes a family fun ride and competitive bike ride, with five route options; said the Rotary Club came up with maps based on other groups; that in 2011 they had 97 participants; that the planning started in July and the event held in September; and that the second year they had 197 participants, and this year had 347; said the goal is to raise money and improve areas; ride included 45 riders who traveled more than 30 miles to come to the event; that the event starts early Sunday morning so most people would come the night before. Mr. Cameron asked if they are projecting 25 rooms and how do they track the room use; and Ms. Desgrosellier responded that they mention in their brochure, two Valley Hotels and two Liberty Lake hotels; that they had surveys after the rides and the numbers in the application are projections based on a percentage of growth. In response to a committee question, she said she has applied for funding to Liberty Lake as well. 11 HUB Sports Center HUB Executive Director Phil Champlin said that sports have a positive impact on the youth and on the stay events in 2010 were 15; and this year were 32; said these requested funds would be used to attract LTAC Meeting Minutes of October 16, 2013 Page 6 of 8 events to the facility, and for the marketing and operations of those events; said the events range from national sports tournaments to local youth events drawing participants from the greater Spokane and like AAU Basketball tournaments; said they were able to host a gymnastic bid; that in 2013 they had eight new events; and since 2012 have started building their own events; and said they have a great reputation for putting on these events; that eleven rooms were generated in 2012, and 37 in 2013; and said they have a wide range of ages attend their events, from 93 to 13; with people from Canada, Alaska, and the Tri-Cities. Mr. Champlin said the funds will help market the local events to regional events. Chair Wick asked about the large amount of their budget used for operations, and Mr. Champlin said some of their operations are used to help subsidize other groups in bringing their tournaments to the HUB. Lodging Tax Advisory Committee members develop funding recommendations Chair Wick asked committee members to write their individual recommendations on the supplied sheet, and to hand the completed sheet to Mr. Calhoun, who would then show the figures on the spreadsheet on the screens. There was some discussion about the process and averages, and Chair Wick said the committee must come up with a collective recommendation per applicant, which will ultimately be given to Council; and that Council can either accept or reject the recommendations. There was some discussion about the rationale of accepting the average recommendation for each applicant, and the Committee members decided to first agree with those recommendations which were very close or similar in amounts, and then move forward from there, such as recommendations for the HUB, Volleyball Court, and Fair & Expo marketing and interim marketing; and the Committee also agreed with the $183,800 for the Sports Commission. It was also determined that this Committee will meet again later to discuss the multi-year funding idea. Chair Wick said he feels the Fair & Expo conference facility is a place which can help develop our assets; that the Friends of the Centennial Trail will have a difficult time tracking data; and that he prefers Liberty Lake assist the Rotary club and that be promoted through Liberty Lake. Committee members agreed. The bulk of the remainder of the discussion concerned Valleyfest. but includes special events and festivals; that the other agencies have been funded since 2004 and the fund has grown every year so the amount is not affected by smaller room nights; said the smaller agencies provide some hotel stays but also shopping and dining and not room nights; and said this Committee should consider what Council wants so as not to end up in an impasse. get what he wanted, the current legislature is what was agreed to; said part of the regulations are reporting requirements to report the place or business residence staying overnight or coming 50 miles or more; said it is all measuring criteria tied in some way to overnight stays; said they lost the tourism office but feels there is a very strong visitor organization like Visit Spokane which is vital to getting room business; and said if more room nights can be generated, the tax could go away; and said he feels the strongest consideration should be given to how to re-generate the funds; said the lodging community is very supportive of Valleyfest, but feels ollars for less than 24 room nights and expect to keep generating funds as how important Valleyfest is, this committee could recommend Council carve out a stable budget item for Valleyfest, and phase it down over five years or so. Chair Wick replied that the City budget does not have the flexibility for such funding and Council has taken the policy of not having a line item for external purposes; said the 2014 budget is within $500 of leeway LTAC Meeting Minutes of October 16, 2013 Page 7 of 8 open the door for other agencies to issue similar requests. Chair Wick said that we get sales tax from shopping and dining, and the legislature only gives us the rebate of 2% from hotel rooms; but realizes we spend as much as overnight guests and has seen cities making poor funding decisions by not funding lodging, and that the City would benefit more if all it did was put heads in beds. Mr. Fiman said he agreed generated from those hotels, we will see a decrease in revenues and less of a return on investment; and the bottom line is, there is a need to generate more revenue and that is done with more heads in beds. Chair Wick said he realizes there is a need for some compromise. Mr. Backsen agreed with the need to find balance and said he feels each item/applicant should be kept open. Mr. Cameron said as a compromise, he would agree to fund $15,000 to Valleyfest. Mr. Fiman questioned the dates of Valleyfest as being the best dates since people have travelled all summer, and by mid-September, are getting their children settled in school, and said he feels August is the biggest month for tourism. There was other discussion of moving some of the amounts from one organization to another with the final results as noted in the motion below. Lodging Tax Advisory Committee member discussion and award recommendations It was moved by Mr. Cameron, seconded and unanimously agreed to recommend the following as the award allocations to be forwarded to City Council: Visit Spokane $247,000 Regional Volleyball Court Expansion $ 7,300 Spokane Fair & Expo marketing $ 28,000 Spokane Fair & Expo Conference Facility $ 4,000 Spokane Fair & Expo Interim marketing $ 7,800 Valleyfest $ 20,000 Spokane Sports Commission $183,800 Valley Heritage Museum $ 13,100 Friends of Centennial Trail $ 0 Liberty Lake Rotary Club $ 0 HUB Sports Center $ 36,000_ Total Allocations: $547,000 Committee members agreed that an additional committee meeting can be scheduled later to discuss multi- year funding. It was moved by Mr. Meier, seconded and unanimously agreed to adjourn. The meeting adjourned at 12:36 p.m. Chris Bainbridge, City Clerk LTAC Meeting Minutes of October 16, 2013 Page 8 of 8