Santa Cruz Good Times

Thursday
Apr 24th
Text size
  • Increase font size
  • Default font size
  • Decrease font size

Balancing Budgets and Beds

beach boardwalkCompromise in the land of tourism

Separating Santa Cruz the city from Santa Cruz the tourist magnate is like separating sand from salt—change one, and you affect the other.

In a continuing effort to balance the city’s rebounding budget, the city council announced an either/or tax measure on July 24 that raises the transient occupancy tax (TOT) increase, either to 11 percent or 12 percent from its current 10 percent.

A TOT increased by 10 percent, to 11 percent, would yield an estimated $440,000 for the city’s general fund annually, whereas a 20 percent increase, to 12 percent, would double that to $880,000.

The amount hinges on whether the Santa Cruz County Board of Supervisors decided to increase the county’s current 9.5 percent TOT to 12 percent, an increase of more than 25 percent, at their Aug. 7 meeting. As of press time, the Board had not voted on the item.

Because the 20 percent increase works out to thousands of dollars for large group stays and conferences, the Santa Cruz Lodging Association strongly disapproves of it. However, President of the Santa Cruz Lodging Association Dilip Patel says the city’s effort towards compromise has been encouraging.

“The city approached us [in June] and said ‘we can work together,’ which is good for us because we were able to give our honest opinion,” Patel says.

While a 10 percent increase seemed more reasonable for the lodging industry, half of the hoped-for city revenue seemed paltry.

Ariel SantaCruzThe Lodging Association then approached the Santa Cruz County Conference and Visitors’ Council (CVC), whose multi-million dollar operating budget goes towards marketing Santa Cruz hotels and venues.

“There hasn’t been a [TOT] increase in 21 years,” Patel says. “The hoteliers were in understanding that the city needed more funding … the lodging industry, CVC and the city were able to strike a deal.”

In this compromise, the city would only increase the TOT to 11 percent, and also be obligation-free from funding the CVC.

The CVC runs on a yearly operating budget of $2 million—approximately $550,000 of which is funded by the city and county.

An additional $1 million of that budget comes from a flat-rate lodging facility assessment fee, charged nightly to lodging facility guests at a flat rate of $1 or $1.50 per bed, depending on the size of the facility.

According to the compromise, lodging facilities would add a few cents to the current $1 city and county assessment fees, and defer the total amount to the CVC, with the hope of making up for lack of city funding.

CEO and President of the CVC Maggie Ivy says that the assessment fee increase may not totally replace the city’s funding.

“We will probably see a little decrease in our budget,” Ivy says, “but that’s something we can absorb.”

For councilmember Lynn Robinson, who sits on the CVC Board of Directors, letting the hotel industry handle its own marketing outreach is common sense.

“Government is not the best entity to do [marketing],” Robinson says. “We’re not marketers. But if you want your community to be out there in publicity resources, somebody has step up and do that—and they’re doing that with their own private money.”

Robinson was the only councilmember to vote against the city’s conditional recommendation, as it still leaves room for a 20 percent increase.

“I was the one that adamantly did not go along with that,” Robinson says. “I wanted it to stay clean at 11 percent. You really have to look at how the increase is going to affect business and, following that, the city’s overall wellbeing.”

Ivy fears that a 20 percent TOT increase would drive potential conferences away—right when conference space prospects are looking up in a city where conference space availability has rarely shined. 

“Hotel Paradox [on Ocean Street] will be opening soon, and they’ll have great conference space,” Ivy says, who also references an additional hotel in the pipeline. “If I’m planning a large conference or group stay, that [TOT] amount is going to be a significant factor. They could well choose a competing destination over us.”

Additionally, hotel occupancy and room rates are just starting to turn around after their dip during the recession. Santa Cruz hotels are currently experiencing a faster growth in lodging than the state’s average, according to CVC Marketing Director Christina Glynn.

The CVC is hoping to set an example for the ballot measure, the official language for which is due from the city on Aug. 10, as a “successful public/private partnership,” says Ivy. “The collaboration between the residents, the city council, and the lodging industry has really paid off.”

Comments (1)Add Comment
...
written by SGM, August 08, 2012
You obviously did your homework here - nice job!

Write comment
smaller | bigger

busy
 

Share this on your social networks

Bookmark and Share

Share this

Bookmark and Share

 

Best of Santa Cruz County 2014

The 2014 Santa Cruz County Readers' Poll Come on in, and have a look around. There’s a lot to see—hundreds of winners selected by thousands of GT readers across Santa Cruz County. So if some of this looks familiar, it’s probably because you helped make it happen. But there are always new things to discover, too—you could go to a different winner or runner-up every day in the Food and Drink category alone, and you’d be booked just about until next year’s Best of Santa Cruz County issue comes out.

 

Something Essential Disappears

Lunar and solar eclipses follow one another. Lunar eclipses occur at full moons, and solar eclipses at new moons. Two weeks ago at the full moon we had the blood red moon—a total lunar eclipse (the next one is Oct. 8). On Monday night, April 28 (new moon), as the Sun, Moon and Earth align, a solar eclipse (Sun obscured) occurs. Eclipses signify something irrevocably is changed in our world. The Sun is our essential life force. Monday’s new moon, 9 degrees Taurus, is also an annular solar eclipse when the Moon moves centrally in front of the Sun, yet does not cover the Sun completely. The Sun's outer edges, still visible, form a “ring of fire” around the Moon.

 

Sugar: The New Tobacco?

Proposed bill would require warning labels on sugary drinks Will soda and other saccharine libations soon come with a health warning? They will if it’s up to our state senator, Bill Monning (D-Carmel). On Feb. 27, Monning proposed first-of-its-kind legislation that would require a consumer warning label be placed on sugar-sweetened beverages sold in California. SB 1000, also known as the Sugar-Sweetened Beverages Safety Warning Act, was proposed to provide vital information to consumers about the harmful effects of consuming sugary drinks, such as sodas, sports drinks, energy drinks, and sweetened teas.

 

Film, Times & Events: Week of April 24

Santa Cruz area movie theaters >
Sign up for Tomorrow's Good Times Today
Upcoming arts & events

RSS Feed Burner

 Subscribe in a reader

Latest Comments

 

Palate-Stretching 101

A wine education with Soif’s experts As a veteran of many weekend wine “seminars” at Soif, I have to confess that I’ve never known less (going in) and learned more (coming out) than I did last week at the Spanish Wine Tasting with ace rep Brian Greenwood. These are classy, casual events and it’s hard to imagine having this much flavor fun anywhere for $20.

 

Martin Ranch Winery

Sauvignon Blanc 2011 One of my favorite wines is Sauvignon Blanc, and this one made by Martin Ranch is particularly lovely. Bright, crisp and refreshing, it’s perfect to pair with fish and shellfish—and good for picnics as it has an easy screw-cap bottle. There’s nothing worse than setting down your blanket, pulling out your sandwiches—and then realizing you don’t have a corkscrew.

 

Foodie File: Red Apple Cafe

Breakfast takes center stage at Gracia Krakauer's Red Apple Cafe Before they moved to Aptos, Gracia and her husband Dan Krakauer would visit friends in Santa Cruz County and eat at the Red Apple Café all the time. Then they moved up here from Santa Monica five years ago, and bought the Aptos location (there’s a separate one in Watsonville) from the family who owned it for two decades.

 

How would you feel about a tech industry boom in Santa Cruz?

I feel like it would ruin the small old-town feeling of Santa Cruz. It wouldn’t be the same Surf City kind of vacation town that it is. Antoinette BennettSanta Cruz | Construction Management