TO: Mayor and City Council
THROUGH: Keith Stahley, City Manager
FROM: Josh Eggleston, Chief Financial Officer
SUBJECT:
title
Public Hearing to renew the Tourism Promotion Area in Salem for an additional five years.
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Strong and Diverse Economy.
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SUMMARY:
summary
In 2019, the City Council approved an Economic Improvement District (EID) for a Tourism Promotion Area (TPA) in Salem. The TPA is a 2% fee on overnight stays in Salem of which up to 95% is remitted to the City’s Destination Marketing Organization (DMO) who is currently Travel Salem. As outlined in Oregon Statute, an EID is required to be reviewed and renewed every five years in order to continue.
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ISSUE:
Shall the City Council approve the renewal of the Tourism Promotion Area for an additional five years?
RECOMMENDATION:
recommendation
Approve the renewal of the Tourism Promotion Area for an additional five years.
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FACTS AND FINDINGS:
The TPA was approved in 2019 which created a 2% fee on overnight stays in Salem at hotels, motels and stays booked through booking agents like Expedia. Short term rentals are not subject to this fee. Of fees collected, 95% is remitted back to Travel Salem to benefit those members within the district by promoting the overnight tourism and lodging business environment through advertising, branding efforts, promotions, sponsorship of special events, and other programs that increase overnight transient lodging stays. Up to 5% can be retained by the City to cover administrative expenses of the program including staff time and banking fees.
Notice of the December 9, 2024, public hearing was mailed to 28 affected parties on October 31, 2024. If approved, the renewal will take effect on January 1, 2025. However, as outlined in ORS Chapter 223, if 33% or more of the impacted parties objects to the renewal (ten objections), then the TPA will be dissolved. To date, the City has not received any testimony objecting to the renewal.
BACKGROUND:
In 2019, Travel Salem and the Salem Area Lodging Association approached the City to establish a TPA. Since its establishment in FY 2020 through FY 2024 (unaudited), the TPA has earned over $3.9M in revenue and over $3.7M has been remitted to Travel Salem. Expenses incurred by the City include staff administration time, banking and investment fees, and card processing fees.
Attachments:
1. None