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2015, 02-25 minutes MINUTES Spokane Valley Lodging Tax Advisory Committee Wednesday, February 25, 2015, 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, Deputy City Manager Member Herman Meier, Spokane Valley Heritage Museum Erik Lamb, Deputy City Attorney Member Peggy Doering, Valleyfest Sarah Farr, Accounting Technician Member Jeff Fiman, Sterling Hospitality/Quality Inn Chris Bainbridge, City Clerk Member Lee Cameron, Mirabeau Park Hotel ------------------------------------------------------------------------------------------------------------------------------- \[At 8:00 a.m., Deputy City Attorney Erik Lamb gave the committee members a training session on the Open Public Meeting Act and \] Chair Wick called the meeting to order at 8:30 a.m. and welcomed everyone to the meeting; and then explained that when this Committee's recommendations were forwarded to Council for allocation consideration, Council remanded everything back to the Committee, stating that the allocations did not meet Council goals; after he read the goals, he further explained that awards can only be made for those who have applied, and although the applicants will be making their presentation again today, the application process was not re-opened. Deputy City Manager Calhoun noted that the order of presentations match the tabs in the original notebook binders; he said score sheets are also available and once all presentations have been made and allocations determined, this will be brought to Council at their March 10 meeting for Council's deliberation and motion consideration. The following presentations were given: 1. Visit Spokane, President and CEO Cheryl Kilday Tourism Marketing: Ms. Kilday briefed the Committee on her proposal for marketing funds; said their goal in marketing is to attract tourists, have them stay longer and spend more money; said their Spokane Valley portion of their website shows the direct benefits of overnight stays in Spokane Valley. Mr. Meier asked if Visit Spokane has marketed Spokane Valley at all since Council hasn't awarded funding. Ms. Kilday replied that they have marketed Spokane Valley, although they had to make some cut backs; and said that once they know the funding amount, there will be other opportunities for geographic marketing. Mr. Meier also asked about the restaurant ads in the Inlander, which did not include Spokane Valley restaurants. Ms. Kilday's assistant explained that those ads were produced by the Inlander, that not every community that participated was listed as the list would have been very long, and she feels it was a matter of time and space for the ad. Mr. Wick asked how much was reduced for the winter campaign that would have normally been spent, and Ms. Kilday said the restaurant week and TV ads were reduced by about 20% with the overall winter campaign by 50%, adding that all the reduction has not been recognized yet as December was last year's funding, and assuming everything moves forward, money will be budgeted for December 2015. 2. Visit Spokane, President and CEO Cheryl Kilday Visitor Information Center: Ms. Kilday explained that this would be a new place; they were offered an opportunity to create a visitor center which would be open seven days a week, as opposed to the kiosk in the Valley Mall which has limited staffing; that the new place would include maps and brochures, etc., that the area would be suitable for RV's to pull into, would gave the ability to have signage off the interstate, and would include restrooms for visitors. She said the location is good but this project can only move forward if the other funding gets awarded. She said the location is a privately owned, for-profit location; the relationship does not include rent but LTAC Meeting Minutes February 25, 2015 Page 1 of 6 includes built-out displays; there are no written agreements but the owner is very interested in giving Visit Spokane the space. She said she cannot publicly say where the location is, but again stated it is very accessible off the freeway, and close to shopping, hotels and restaurants. To clarify, Ms. Kilday stated the request is for the built-out and staffing, and not the materials. Ms. Doering stated that she thought the City didn't want to include funding of salaries and employment; and Mr. Calhoun said as a general rule, the City tries to stay away from funding salaries as it makes the state auditor very uncomfortable; but with the general request, we would be reimbursing marketing expenses and wages could be a part of that program. 3. Parks and Recreation, Director Mike Stone, Recreation Coordinator Jennifer Papich, Evergreen Volleyball Association Representative Lindsey Callahan Browns Park Sand Volleyball Courts Ms. Papich explained some of the benefits of this project; Mr. Stone said the goal is to complete the entire park masterplan at a cost of about $1.5 million, and that this is just one opportunity to seek some funding; said he feels this fits exactly with the LTAC fund's purpose; the courts are what will bring the players and supporters into our area; said there are some service clubs involved and he work will continue over the years to raise funds; said Council is very supportive; that we would like to add a few courts each year, and it will take some time to complete; and that they also want to make sure to take care of the neighborhood portion of the park. Mr. Calhoun said $176,000 was included in the 2015 City budget for volleyball courts. Mr. Cameron said that the last time this was discussed, Eric Sawyer commented publicly that the proposal has merit but there is a concern with limited resources, and some feel it should be a Parks and Recreation City expense; and he expressed concern with a lack of plans to fund the complete project. Mr. Stone said they went through the fully vetted public process and are committed to this site; if this Committee doesn't support the proposal, it will get built eventually. Ms. Callahan spoke about the growing interest and participation in the junior events, growing from 90 participants in 2013, to 827 last year. Mr. Stone stated just one court costs about $40,000, and they are hoping to lower that cost by an economy of scale; said they have submitted requests for bids on the courts, and hope to make a contract award at the March 10 Council meeting; said the courts should be completed by May, which is when the season starts; said sand is a challenge, and they revised the specifications to minimize the amount of excavation; said the goal is to have enough funding to build eights courts this spring. Ms. Callahan said last year about 800 people attended, and they expect that to increase. Mr. Cameron said he realizes there is a large emphasis on athletic venues in the valley and he is not opposed to the facility, but is concerned how to build it with limited funds and not lose any ground by marketing something that is already occurring. He asked if overnight stays are tracked. Ms. Callahan said they had about 26 overnight stays last year; but with the plan to increase events to two-nights, many who travel more than 50 miles will end up spending the night rather than return home after a one-day event. Mr. Cameron said in his meetings with the Sports Commission and others, the question arose that maybe this facility could qualify for County funds as they work on their parks levy lift, and expressed concern of comparing 26 overnight stays against hundreds of overnight stays with other entities. 4. Parks and Recreation, Director Mike Stone, Customer Relations Coordinator Carol Carter CenterPlace Marketing Ms. Carter explained that their desire is to partner with Visit Spokane to bring regional conferences to CenterPlace; they have scheduled at least five events in 2015; she explained the purpose of the funding and said this is an opportunity to partner with Visit Spokane; said they want to work with the hotels as well to get some ideas on how to track those overnight stays. She noted there is a conference at CenterPlace next week, and the participants are staying at the downtown Davenport. Ms. Carter also mentioned that it is the national conferences that draw the largest number of participants. LTAC Meeting Minutes February 25, 2015 Page 2 of 6 5. Spokane County Fair & Expo Center, Director Richard Hartzell, and Marketing/Sales Manager Erin Gurtel Mr. Hartzell said this request is for marketing of the Fair; they have expanded the frequency and distance in advertising; and said the Fair generates over 1,000 room nights just from the vendors. 6. Spokane County Fair & Expo Center, Director Richard Hartzell, and Marketing/Sales Manager Erin Gurtel Mr. Hartzell said that this request is to cover interim marketing; and Ms. Gurtel explained that they hosted over 100 annual events and are always looking for ways to expand; said this will help in advertising of what they have available as well as what is going on; she mentioned the larger shows and their public attraction; said they host events every weekend throughout the year; adding that they hope to add more attractions and educational opportunities. 7. Spokane County Fair & Expo Center, Director Richard Hartzell, and Marketing/Sales Manager Erin Gurtel Ms. Gurtel explained that the Fair would like to offer an exotic animal display during the fair; it would be a free educational/hands-on activity for fair attendees, and they hope to add such attractions as reptiles, and kangaroos. 8. Valleyfest, President Rick Wilhite, and Board Member Stephanie Hughes A PowerPoint presentation was shown highlighting some of the many aspects of Valleyfest. 9. Spokane Regional Sports Commission, President Eric Sawyer Mr. Sawyer said by the end of the year, they expect to have generated about 12,000 specific valley room nights; said large events at the arena will also support the valley in room nights; said now that they are in their first quarter, the issue facing them is they don't know where they sit as they heard that the Council is not interested in funding them now; said the Sports Commission is committed but doesn't know how to proceed and they need to know if the Spokane Valley partnership will continue so he can be prepared to move forward in hosting events. Mr. Wick asked about missed events and Mr. Sawyer said they have missed three events, two of which were national; said the Valley Triathlon and middle school basketball championships have doubled this year in size, adding that high schools are mostly used for that event; said they continue with Plantes Ferry tournaments; the Coeur d'Alene Iron Man is upcoming and that also supports room nights in the valley; said the business of sports historically occurs in the fall but the process starts way before that; said they are preparing bids and working throughout the year in anticipation of where they want to be in the fall; said the first quarter of the year is busy but the second quarter is more so; that out of 21 bids in the first quarter, they missed two or three and are now up against another deadline with one of the largest events the Fairgrounds would ever host. Mr. Wick asked if there are other means to make up for the loss and Mr. Sawyer said no; that it is very competitive "out there" and if they don't have the resources, they can't move forward. Mr. Sawyer said the HUB and Plantes Ferry park, two major sports facilities, while not actually in the Spokane Valley city limits, each have a large impact on the valley; said he has been working with others to have soccer events in Plantes Ferry; lauded the success of the HUB; mentioned that Browns Park is created for beach volleyball but needs to be built for the tremendous growth in the league; that he is aware it is a park project, but has concerns about whether it would generate room nights; said he needs to have the partnership with the City, and is concerned if the City doesn't want to partner. Mr. Wick said concerning a partnership, that a study showed where a sportsplex should be but he hasn't seen any data on that. Mr. Sawyer said he shared a copy of the study with City Manager Jackson. Mr. Cameron said he recently had a long meeting with Mr. Jackson who said after several requests for Mr. Sawyer to make a presentation, that Mr. Jackson has not heard from Mr. Sawyer. Mr. Cameron said he feels there is a lot of misinformation out there, and he is concerned that after more than two years of studying venue LTAC Meeting Minutes February 25, 2015 Page 3 of 6 opportunities, he heard the Sports Commission mention numerous opportunities could be available for the valley, but said he doesn't see anything about any project proposed to be located in Spokane Valley, and said the hoteliers are very concerned. 10. Spokane River Forum, Executive Director Andy Dunau Mr. Dunau said this request is to promote Spokane Valley as a destination for those coming to use the River; said infrastructure and marketing go hand-in-hand; said he received approval to move with the development of the trail access below Plantes Ferry into Spokane Valley, and said they will hold a fundraiser on March 25 by holding an international fly fishing festival. He mentioned the Barker Road and Mirabeau area and of the Valley's commitment to develop the access at Sullivan Bridge; said they cannot absolutely track room nights, but can tell their events have an impact based on increased participation. The meeting recessed at 10:25 a.m. and was called back to order at 10:35 a.m. 11. Heritage Museum, Director Jayne Singleton, and Board Member Bill Crawford Museum Director Jayne Singleton and Board Member Bill Crawford stated that the museum has served tourists for eleven years; said when she heard about Council remanding the recommendations back to the Committee, her thought was how to handle the budget; said she met with those associated with marketing the museum, and they agreed to defer their invoices; said she is hopeful that funding will continue now that a commitment has been made; and she went through her PowerPoint presentation highlighting the museum. Ms. Singleton mentioned that they track every visitor as they are asked when they come in, how they heard about the museum, where are they staying, and if they are doing anything else in the valley. 12. The HUB Sports Center, Executive Director Phil Champion Mr. Champion reported that the HUB has continued to grow over the last four to five years; they have some new events, such as a four-team volleyball tournament, and they are working with the Evergreen Region to help promote that event; they will be hosting the Northwest Regional Champs, US Basketball Association event in May; and they continue to look for other opportunities for events and tournaments. When asked by Ms. Doering if the delay in funding affected them, Mr. Champion said their busy time of year is now and they are in a very strong position, said the delay hasn't necessarily affected plans for the remainder of the year. Mr. Cameron asked if Mr. Champion felt a downtown location of a new sportsplex would affect them negatively, and Mr. Champion said it would depend on the programs; that there will likely be some impact but overall won't be tremendous; said they continue to make strides toward financial sustainability and the LTAC funds help with their outreach. III. LTAC Members develop funding recommendations: Committee members then worked to complete the recommendation work forms for Mr. Calhoun who then explained that as has been done in the past, once all figures are in, he will submit the information, along with the average for each applicant, to Council at their March 10 meeting. Mr. Wick asked about adding an "unallocated" row and Mr. Calhoun did so on the spreadsheet. IV. LTAC Member discussion and award recommendation: Before getting into individual allocations, there was brief discussion about a potential County levy lift, followed by discussion about $100,000 in reserves. Mr. Calhoun explained that the idea is to keep about $100,000 for cash flow purposes; that taxes are collected in January, remitted the end of February, and the City gets them the end of March. Committee members started their discussion about specific awards, with Mr. Cameron explaining a little about the lodging industry and the tax; said a healthy lodging community is a great indicator of where LTAC Meeting Minutes February 25, 2015 Page 4 of 6 money goes; said growth in the industry is not what it should be although there is some improvement over the last few years; the emphasis, he said, is on where we can get the highest return for the money; said it concerns him greatly that Visit Spokane might have to drop some marketing if funding were to drop below $200,000; said the committee's primary responsibility is to reinvest for travelers and business/pleasure to stay away from their place of residence or business to come here and have overnight paid accommodations; said he met with individual members of Council and members of the public and there is a large interest in pursuing that responsibility; said he was pleased to hear that Parks and Recreation is being funded by the City and that the courts are proceeding, and said he is confident that project could move faster with funding incorporated from County funds. Mr. Meier said the state statutes and City goals are very clear about overnight stays and other things that generate revenue, like shopping, and gasoline; said he feels there isn't enough information yet about the visitor center, and said often times a visitor center is just a restroom stop; said he is a firm believer in volleyball and that lodging tax fits with that; feels CenterPlace doesn't need all these funds; said the Fair is a "no brainer" as it is one of the biggest entities in our region; said Valleyfest is our big festival and they deserve funding, but they don't generate 220,000 room nights like Visit Spokane or the Sports Commission. Concerning the idea of a Sports Commission and a sportsplex downtown, Mr. Meier said he feels like that is "putting the cake downtown and the crumbs in the valley" and said he could not agree with funding $200,000; said he is not in favor of having unallocated funds, at least not this year as these applicants didn't expect that. Ms. Doering said this meeting is being held today because the allocation recommendations were remanded from Council as they wanted to see more support in the valley; concerning a sportsplex, said she can only review what has been presented to this committee now as no one appears to have correct information about such a facility; said she also does not know what the County parks will do, but that we have a masterplan for our parks and recreation; and she favors funding entities in Spokane Valley. Mr. Fiman said his rationale for his allocation suggestions is based on return on investment, and said many valley hoteliers feel the same; that funding some of these requests will not bring the wanted revenue; said Visit Spokane has done a lot for us; that he looks at it one way, which he said is the only way to look at it as what would benefit Spokane the most; said there needs to be a future goal of what we want to do with this valley; and for some proposals, said he Mr. Wick said he tried to determine what will put us in a better place in the future; that he hears we don't have enough assets or are missing venues or facilities; the question is, how can we use this fund to better set us up in the future; he mentioned the Parks Masterplan, and that the City is contributing some City funds to the project; but questioned if there is something else we would do with LTAC funds as well to make us a tourism destination. Mr. Wick said that when he was in Olympia last week he spoke with many legislators who knew about us and our festival; said everyone has a general understanding that Valleyfest is the City's festival; said he feels we should have more partnerships. Mr. Wick reminded everyone that this funding mechanism is a reimbursement program. Mr. Wick also mentioned he feels the County's levy is pushing forward and that time is of the essence; said we need a public process to figure all that out; said it is this Committee that makes recommendations to Council; that he would like some funds "unallocated" to perhaps do a study of what tourism venues are needed, and get input from citizens about what would be a big return on tourism investment. There was some discussion about reserve funds, but most committee members felt it was not a good idea for this year since it is something the applicants were not expecting. Mr. Cameron mentioned Valleyfest's lack of overnight rooms; but Ms. Doering noted on page 5 of her grant application, the figures for overnight stays in relation to Valleyfest, and that these numbers are based on numbers generated by Eastern Washington University's School of Business. After initial LTAC Meeting Minutes February 25, 2015 Page 5 of 6 discussions, moving some funds from one entity to another, it was moved by Mr. Cameron, seconded and unanimously agreed on the following recommended allocations: 1. Visit Spokane, operations: $230,000 7. Fair & Expo, exotic animal display $6,000 2. Visit Spokane, visitor center: $0 8. Valleyfest: $31,600 3. Parks & Rec Volleyball Courts: $68,000 9. Sports Commission: $120,000 4. Parks & Rec, CenterPlace Marketing: $17,000 10. Spokane River Forum: $1,000 5. Fair & Expo, marketing: $30,000 11. Heritage Museum: $18,400 6. Fair & Expo, Interim marketing: $8,000 12. HUB Sports Center: $40,000 Discussion moved to the idea of another layer of lodging tax; of the 12% cap, and of possible STA th (Spokane Transit Authority) ballot measure moving forward in April for their 3/10 of 1% tax. Mr. Cameron suggested getting something before Council for an additional amount in lodging tax. It was moved by Mr. Cameron, seconded and unanimously agreed to request Council to pass an additional 1.3% lodging tax to be put into a fund dedicated for a large sporting venue or venues for tourism facilities that generate overnight guests. Mr. Calhoun said this Committee's funding allocations will come before Council for deliberation and a th motion at their March 10 meeting; and that this second request can be included on that March 10 agenda as an administrative report. It was moved by Mr. Meier, seconded and unanimously agreed to adjourn. The meeting adjourned at 12:42 p.m. Respectfully submitted, Chris Bainbridge, Spokane Valley City Clerk LTAC Meeting Minutes February 25, 2015 Page 6 of 6