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2016, 10-20 minutes MINUTES Spokane Valley Lodging Tax Advisory Committee Thursday, October 20, 2016 8:30 a.m. nd Spokane Valley City Hall, 2 Floor Conference Room 11707 E. Sprague Avenue, Spokane Valley, Wa. 99206 _____________________________________________________________________ __ Attendance: Lodging Tax Advisory Committee Members: Staff: Chair: Councilmember Sam Wood Chelsie Taylor, Finance Director Bill Ames, the HUB Sarah Farr, Accounting Technician Lee Cameron, Mirabeau Park Hotel Chris Bainbridge, City Clerk Peggy Doering, Valleyfest Colleen Heinselman, Hampton Inn Suites ------------------------------------------------------------------------------------------------------------------------------- Councilmember Wood opened the meeting at 8:30 a.m., and after self-introductions by committee members, Finance Director Taylor gave an overview of the materials in the binder, said that each presentation is scheduled for approximately ten minutes, followed by a time for questions and answers; she also went over how the laws have changed over the years, and said that Council can only approve the recommended amounts; they can award all, some or none of those dollar amounts; or they can even send the entire thing back to the Committee for re-review. She mentioned Council goals and priorities for use of the revenues, and the $30,000 set aside for the City of Spokane Valley; said after the allocations, this leaves an ending fund balance of $145,000, which is left for cash flow purposes; and she mentioned the tentative October 19, 2017 calendar meeting for next year. The following entities gave a presentation: 1. The HUB. HUB Executive Director Phil Champlin gave background and history of the HUB; mentioned the several tournaments that have generated hotel stays and he estimated there were over 2,000 room nights generated in 2016; said they want to develop their own tournaments; that last year funds were used mostly for advertising. A question was asked about the campaign to raise funds to purchase the building, and Mr. Champlin said there is an ongoing campaign, and that they have been operating in the black for the last six years. Mr. Cameron said the Lodging Community is pleased with the growth and development and room nights and on the good job Mr. Champlin does on meeting committee objectives. 2. Valleyfest. Board Member Ed Clark said that he is presenting on behalf of over 200 volunteers; said Valleyfest showcases the City of Spokane Valley as well as the sponsors, that it is a fun family event that promotes the City and has a positive impact; said tens of thousands have come to the festival and the prediction is that over 100,000 from all over the northwest will attend the three-day event, eat in restaurants, stay in hotels, and shop; he said many businesses report financial increases during the three-day event; with the beauty of CenterPlace and the park and the River, it spurs revitalization and economic development that markets the community; said next year they plan to go big and hope to hit the $2 million economic impact; said they are requesting $150,000 to market to a wider regional market as well as the Pacific Northwest, including the Portland marketing area; also mentioned they use social media and that their website development continues. Mr. Cameron said he did a call around for the last twelve plus years, said his hotel provided discount packages, and historically only once or twice were a few rooms reported at the Motel 8 and they were vendors at Valleyfest. Ms. Heinselman said her hotel has been open for six and a half years, and they ask every year as they try to get an idea of how many are coming for Valleyfest; and said that no one said they for being there. Mr. Cameron said they tracked it and had virtually no one ever say they were coming for Valleyfestovernight and he asked where did the numbers come from for overnight stays. Valleyfest Board Member Stephanie LTAC Meeting Minutes October 20, 2016 Page 1 of 8 hotel stays which is why they are going big and inviting people from other areas, like Seattle, Portland, and Boise; said they want to expand the marketing for 2017. Ms. Heinselman suggested the timing of Valleyfest might be of issue too as it is right after school starts, and she asked if there were any thoughts of moving the date. Ms. Hughes said the Board has looked at that and will do so again. Mr. Ames said he spent about five hours at Valleyfest passing out brochures for HUB events, and he met people from Ritzville and elsewhere, and said the only hotel he is aware of taking overnight guests was Super 8, and said that is a concern. Ms. Hughes again agreed they are not putting the heads in beds and what is why they seek a broader audience. Mr. Cameron said part of the discussion in the past was to market outside the area, said the timing of the festival is also relevant, that it needs to be a top event which takes hundreds of thousands some of the events in downtown Spokane; that this event ; generated in the past; and said to spend $150,000 to get no overnight guests flies in the face of common sense; said others have indicated they want to see Valleyfest self-sufficient through sponsorships and not necessarily tax dollars. Mr. Clark replied that this is why they want to reach out further; said developing a strategic plan at this point would be jumping the gun. Councilmember Wood stated that Council Goal #5 is that events should have the goal of becoming self-sustaining, but there is a statement in there that says they never will be self- sustaining; so the question is how to address that goal without a plan. Ms. Hughes reminded everyone that Valleyfest is volunteers so in order to be self-sustaining, they would have to get thousands from sponsors; -know if they will be able to put on the festival; s discussion about the idea of asking the City to take on Valleyfest as one of its functions, and Ms. Hughes said other cities do that. Mr. Clark reminded everyone that Valleyfest showcases and promotes Spokane Valley and gives citizens a cultural, fun, learning experience, and is put on by hundreds of volunteers with very little money, which is why they want to make it bigger and have a bigger impact on the community. Councilmember Wood suggested maybe LTAC funds is the wrong place and perhaps the money should come from Council. Ms. Doering said she would agree, but that this is a very long conversation; said there have been hotel stays and they do exit surveys vetted through Eastern Wa Business, said people have lots of options and can answer a survey any time they want; that some people stay in Pos and it includes festivals. Mr. Cameron voiced his concerns and observations about whether lodging is the but said if he were running it, he would want a part time or full time management person who has had fundraising experience; economicallyrooms, that is the problem; he said they promote Valleyfest to all their hotel guests; and he again questioned the time of year and said it is throwing money away. 3. Valleyfest, Cycle Celebration. Board Member Hughes explained that the new event brings more people to the community; said the past funding only allowed marketing in the area and they would like to invite other areas like Yakima; said this is not throwing away the money; that it is a summer event; said they received a request to do a 100-mile run; said people come to the park; that they also had a bike rodeo to bring in more kids this year; said they hope to attract people from Seattle and other areas to come visit and participate in the cycle celebration. Ms. Heinselman asked about the $25,000 for marketing and Ms. Hughes said she learned this is a very targeted group of people, similar to the Seattle Cycle or Portland Cycle club, they plan to identify those key clubs and groups and do more with the bike stores, discover where those stores are in other areas and send them literature for them to share. Mr. Cameron said that many people LTAC Meeting Minutes October 20, 2016 Page 2 of 8 so maybe a suggestion would be to also use social media to connect with clubs; said he would have less difficulty in funding it if he could see growth. 4. Heritage Museum. Museum Director Jayne Singleton and Museum Volunteer Nancy Pulham, with the assistance of their PowerPoint presentation, explained that the Museum has been tracking growth via their guest log, to ask visitors as they enter the museum where they heard about the museum and where they are staying. Ms. Singleton explained that social media is very popular so the museum volunteers get into different methods for getting the word out about the museum; she mentioned they also do an annual survey; said they are well aware of the need to demonstrate how the funds are used. Ms. Pulham said she is usually at the museum once or twice a week and she also understands the importance of tracking visitors, and of the good media marketing efforts to attract people to the museum. Ms. Singleton also explained about some 5. Spokane Sports Commission. Commission President Eric Sawyer explained that the Spokane Sports Commission is a 501(c) economic driver for the community, and noted it is a very competitive market; said they researched and identified the events to make a match into their market, and have been very successful; said the trends are showing strong growth in sports as part of tourism; said over half the millennials are travelling for sports- related events; and by hosting events, it gives the community exposure and that influences economic development; said the competition for this is very high, to be to competitive, they need to provide incentives for how the event will work, who will do it, and how to provide an incentive to get that event to come here; said the goal this year is to hit 20,000 hotel room nights, and estimated that about 40-60% will be Valley stays. Mr. Sawyer said that they were just awarded the U.S. National Cross Country Championships and will be showcasing that to the community in the fall of 2018; he said the Commission has the ability to help showcase this community and will make sure the HUB gets it capital campaign done. He also mentioned the development of the Nordic Center in Mt. Spokane, said he feels Mt. Spokane is part of the valley; and they are close to having a feasibility study for a major sports complex next to the HUB. Mr. Cameron said he applauds the Sports Commission, said the return on investment will be critical this year; and said he is 100% behind him in development plans and would like to even expand on those plans; said the Commission spent less than $13.00 a room night which is an excellent return on investment. Mr. Ames added that the Commission has jumped in to help put together a strategic plan for the volleyball tournament in the old colosseum. Councilmember Wood said he would love to see the Valley become a maga-sports center, and personally feels we need a premier sports community, which he said would take a lot of money, but we need that facility which will market and promote the valley. The group took a quick break at 9:50 a.m. and resumed the meeting at 10:00 a.m. 6. Spokane Valley Parks and Recreation Department, Volleyball Courts: Recreation Coordinator Jennifer Papich went over some of the history of Browns park and the volleyball courts; she explained that these four additional courts would make a total of twelve courts, and therefore move the park that much closer to the goal of having sixteen courts. Ms. Papich explained that these courts are more expensive than previous courts due to the location as they are a little more difficult to access, and they impact irrigation a little more. Ms. Lindsay Walter, Officer Manager for Evergreen Regional Volleyball Association also spoke about the sand volleyball program; that with eight courts they struggle to accommodate all the requests for use, and that they try to balance meeting the Association requests as well as time for community members; said they hold a national event as well, and the courts are also needed for practice. Ms. Papich stated that as a parent of a volleyball player, you bring the entire family; said the numbers in the application are just the participants and not the families shopping, eating, and staying in hotels; and that once the facility is complete with all sixteen courts, it will enable us to host more opportunities to bring in more people and produce more overnight stays. Parks and Recreation Director Mike Stone said staff has worked long and hard with the Spokane Valley Council to develop a masterplan for the park, and a key component and vision LTAC Meeting Minutes October 20, 2016 Page 3 of 8 is the sand volleyball complex; said it is the only thing of its kind within 300 miles, and when Council approved this program, they felt it would be something of value; he said mos bring in others, all which provides tourism dollars in food, gas, and shopping; said we feel strongly this will be tremendous and he would love to get it fully built, and ask the Sports Commission to assist in this promotion. Mr. Cameron said comments from the lodging partners is to endorse the park and the full courts as they do Council approved the masterplan, there is no guarantee on lodging dollars, and he asked about the timeline. Mr. Stone explained that this is a long-term project, and that the demands on City funds are vast and many, and we want to make sure we invested and have a partnership with the Regional Volleyball Association so the maintenance falls on them; said we promise to go out and search funding and try to develop some sponsorships, but that is just one venue; said he also understands the challenges of the LTAC, but feels this project has as much merit as any of the applications, and said that Browns Park and the sand volleyball courts are a highlight of the community; said that this is probably a seven or eight year project unless something comes along; and said he appreciates any consideration. Mr. Ames expressed a concern for the restrooms and that the park should not be a smoking area for high school kids. Mr. Stone acknowledged that is a challenge, but the idea is to provide more positive events in the park so the kids not interested will hopefully move on; said the restrooms were greatly vandalized so this year they had to use portable toilets; said restrooms are important but it is a challenge, adding that the high school physical education department has also discovered the use of the courts too, which is great. 7. The Family Guide. Ms. Charity Doyl said she is the director of the Family Guide and the Family Fun Fair; said this information is being distributed at local schools in the Spokane and North Idaho area; they partner with schools, private companies, and libraries for their family fun fair; said the City of Spokane helped with their event and she went over the proposal; said she would love to propose that Spokane Valley th launch a 4 Friday at the Valley, which would be a combination of a First Friday event and a night market; said First Fridays are art walks hosted by a city and are usually done the first Friday of the month. She explained some of the background of the Chapters and the night market, which she said is popular in the Asian culture; said you lose the personal touch due to the ability to buy so much over the Internet and she feels Spokane Valley residents are ready for a monthly event that highlights the community; said the Spokane Valley Mall offered to be host sponsor for the first year, and they want this to be seen by the community as an entity that gives back; she said the event participating vendors; there will be different themes every month and they will partner with other local organizations; and said it will tie in with the hotels specifically on Indiana Avenue; said they will highlight the positive attributes of our City and urge people to stay in the Valley instead of downtown Spokane; and that they will have a welcome packet placed at the hotels. She also explained that the events will feature the performing arts and said they have access to an amazing theater group and jazz bands, as well as Spokane gymnastics, and she would love to have City Hall at the Mall, and invite local business owners as they market Spokane Valley as a cultural destination. 8. Spokane County Fair and Expo Interstate Fair. Fair Director Mr. Rich Hartzell gave some background of their operation; said they operate as a Spokane County Department enterprise fund, which means they expenses. Mr. Hartzell gave a recap of the last fair which he said had a larger attendance over the previous year, even with the poor weather on the last day; said their proposal is to use the funds to enhance and publicly market and merchandise more of their entertainment; said many exhibitors come from out of town and out of state, and that they generate over 1,000 room nights with just the vendors; and mentioned that they are a regional fair. Marketing and Sales Manager Ms. Erin Gurtel mentioned the rating on their website, and said one property reported over 160 room nights this year; that they have reached out to ten Valley LTAC Meeting Minutes October 20, 2016 Page 4 of 8 properties, and they all report rooms, although not everyone tracks the room nights; said the vendors stay multiple nights, and that they would like to keep building on what they have to enhance their tight budget. 9. Spokane County Fair and Expo Winter Glow Spectacular. Ms. Gurtel explained that she hopes this will be a signature event for the holiday season; she explained that the event was previously held at Riverfront construction; said they plan to have over one million lights, have a light maze, a zoo, animated trees, and music to have a complete holiday festival; said they will have entertainment and the event will open December 9 for seventeen nights, and with the goal to make this an annual event, they are partnering with Winter Glow, which will bring the lights. She mentioned parking will be free which is an attraction, and that the public are familiar with the venue; said the cost will be $7.00 for adults, and $5.00 for youth and seniors, with those under six free. Mr. Cameron asked if Winter Glow has committed to this venue and Mr. Hartzell said they see tremendous potential, and that they will also have food booths, and arts and crafts, and sees this as a possibility for unlimited growth; and said they are working on a three-year contract. Mr. Cameron suggested a longer length contract. 10. Visit Spokane. Visit Spokane President and CEO Cheryl Kilday went over the proposal; said these funding requests are specifically about Spokane Valley; that they use funds from Spokane Valley for Spokane Valley; they work to amplify what is already here and to target specific audiences and leverage resources together; she went through her PowerPoint presentation and mentioned the new map, and showed the Committee members a sample; said this will be an aggressive marketing plan that helps promote Spokane Valley; also they have a new brochure they are recommending to be reproduced. Ms. Kilday then showed the video; said they have produced two videos and would like to do two more and get in more things, such as the museum, tasting rooms, and things to give a fullness to the Valley and not just the outdoor events and venues; said they have five areas of focus: leisure, international, group tours, travel influences, and meetings and conventions; and they use the virtual reality videos to show people this area and entice them to come here; said the goal is to develop three to five virtual videos this year. Mr. Cameron spoke about the lack of room nights due to the Grand Hotel downtown with their over 700 rooms and of their competitive rates; said we must continue to promote and Spokane Valley must do something to build attractions to bring in overnight guests. Ms. Kilday said that the downtown area has grown demand by 13% with the new convention center, new hotel, while Spokane Valley stays flat, which she said is good news as it is not declining; said the last three years their funding however, has declined, while funding from these are tough decisions on marketing and investing in the future for tourism-related projects, and Ms. Kilday remarked that they are trying to find a mechanism that goes beyond the hoteliers, and are also working on legislation concerning the state -wide tourism. There were no further presentations. Mr. Cameron said there are various ongoing studies concerning tourism, including a study that the Lodging Tax Advisory Committee recommended funding in excess of $80,000; said the County Sports Plan is nearly complete, as is the master plan; with all the studies there is no decision or guidance and no strategic plan; said he spoke with different community leaders, and if they are going to do the job with the investment interests in mind for Spokane Valley and those citizens and businesses, there is a need to identify capital projects, venues, and sports facilities to drive in overnight guests, and in keeping with City Council and Lodging Committee stated objectives to provide funds to be used for capital and operating expenditures for tourism and facilities to draw overnight facilities, he moved that $250,000 be deducted from the available Lodging Tax funds for distribution in 2017 and have those funds moved into the 1.3% Lodging Tax Fund account dedicated for a large sports venue or venues for tourism facilities that generate overnight guests, and he recommend that this motion be provided for the CThe motion was seconded by Mr. Bill Ames. said they say this is permissible; that we could allocate $354,000 today and the $250,000 remaining on the table with a LTAC Meeting Minutes October 20, 2016 Page 5 of 8 recommendation d if the funds sit in limbo, and said that the Attorney General also said this is permissible. Ms. Doering argued against the motion and said that these agencies expected to be funded and plan their budgets according for the next year, and that this should have been discussed and have legal look at it. Mr. Cameron said the City Attorney said this is permissible. Finance Director Taylor added that she would like to get clarification about this process. Mr. Cameron said we could also ask for another round of applications if we so desired, and Ms. Doering said that a second round takes up a lot of staff time; and that this is a disservice to the people who came here to apply for funding and then have the application process circumvented this way. The motion passed with all in favor except Peggy Doering. Ms. Doering said she feels the committee should have further discussion; and Mr. Cameron said that everyone could have voted against the motion. Committee members took a few minutes to write down their recommendations, after which the group took a brief break at 11:28 a.m., and resumed at 11:36 a.m. Finance Director Taylor went over the recommended amounts on the spreadsheet and showed the ultimate averages. Mr. Cameron justified his recommendation by stating that Spokane Valley is not seeing the recovery rate of others and he tried to take those areas that actually produce, and fund them; said it is lodging who put that in the legislation with the intent to bring that money forward and regenerate it for more heads in beds; mentioned that this is the wrong year to put money in new events and new events have a certain history of failure rates; said there are only so many events that a community will support, adding that he is interested in hearing the results of some of the numerous studies; said everyone else is building: Coeur d Airway Heights, downtown Spokane, but we are not and we are very limited when we talk sports, said there are no facilities internationally or national tournaments ready except for the HUB. Mr. Ames said he spoke with Mr. Champlin of the HUB and won said that was the needed amount; said he has dealt with the Sports Commission for twenty-five years, and attend the fair annually; said there is a need to protect Valleyfest and he has faith that the Council will do that; and said he feels Spokane Valley needs to tax themselves to support that event; said there is no question Ms. Ms. Heinselman explained that she voted on what know if Winter Glow would even bring four to her hotel in the future, and that she chose those entities proven to bring heads in beds; said she loves Valleyfest but even if marketed, and regardless of timing, it is a community event and she feels the City should be supporting them and not the Lodging Tax; said she has not been to the Museum and rhetorically asked if people come to the museum for the museum or for other reasons; said she looks at the numbers and what brings the biggest difference and said more dollars to a sports event facility would do that. Ms. Doering stated that goal #4 states that Council recognizes that lodging nights are an important measure of a successful event tor marketing programs and will place higher consideration on events or programs with a demonstrable history of increasing overnight stays; but will take into consideration not just the operates on a very lean budget and when it has been requested over periods of time for Valleyfest to be included in the budget, the answer has always been no; said this has been the venue for requesting funds; said the HUB technically is on our border, the Museum is a Valley entity and Paprojects; and said the fair is within the City; said she came prepared to allocate the entire $604,000 which would not have left any zeros in her columns showing on the spreadsheet. There was discussion about using funds for capital projects, that hotel guests generate tourism dollars, with a comment from Mr. Cameron of why spend so much on studies if there is no intent to do anything about it; further discussion on use of the funds; that part of the process for capital projects includes land acquisition, and that citizens want to benefit from economic development; after which Councilmember Wood suggested that discussion be continued at another time. LTAC Meeting Minutes October 20, 2016 Page 6 of 8 Each committee member explained their rationale for their funding recommendation as shown in the attached spreadsheet, which included many of the points made earlier, and which ended with the following recommendation: (1) HUB Sports Center $40,000; (2) Valleyfest $31,600; (3) Valleyfest Cycle Celebration $5,000; (4) Spokane Valley Heritage Museum $9,500; (5) Spokane Sports Commission $115,600; (6) Spokane Valley Parks & Recreation: zero; (7) The Family Guide: zero; (8) Spokane County Fair and Expo Fair $47,000; (9) Spokane County Fair and Expo Winter Glow $2,170; and Visit Spokane $103,130. It was then moved by Mr. Cameron and seconded to accept the recommendation as noted. The motion passed with all in favor except Peggy Doering. It was moved by Ms. Heinselman, seconded and unanimously agreed to adjourn. The meeting adjourned at 12:20 p.m. Respectfully submitted, Chris Bainbridge, Spokane Valley City Clerk LTAC Meeting Minutes October 20, 2016 Page 7 of 8 LTAC Meeting Minutes October 20, 2016 Page 8 of 8