HomeMy WebLinkAbout21 - Proposed Modification of theNBTBID Management District PlanCITY OF
tu s NEWPORTBEACH
�1FORNCity Council Staff Report
June 26, 2018
Agenda Item No. 21
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dave Kiff, City Manager - 949-644-3001,
dkiff@newportbeachca.gov
PREPARED BY: Tara Finnigan, Deputy City Manager,
tfinnigan@newportbeachca.gov
PHONE: 949-644-3035
Public Meeting on the Proposed Modification of the Newport Beach
TITLE: Tourism Business Improvement District's Management District Plan
ABSTRACT:
The Newport Beach Tourism Business Improvement District (NBTBID) Owner's
Association desires to modify the NBTBID's Management District Plan to include the Lido
House as a TBID member.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Hold a public meeting on the proposed modification of the NBTBID's Management
District Plan.
FUNDING REQUIREMENTS:
The current adopted budget includes sufficient funding for this project. The City of
Newport Beach (City) collects the member assessments on behalf of the NBTBID and
retains 0.25% of 1 % of the total assessments collected in order to reimburse the City for
collection and administrative costs associated with the NBTBID.
DISCUSSION:
Background
The NBTBID is a business improvement district formed pursuant to the Property and
Business Improvement District Law of 1994, codified in Streets and Highways Code
Section 36600 et seq. (1994 Law), which helps fund marketing and sales promotion
efforts for the assessed Newport Beach tourism businesses. It was established by Council
Resolution 2009-21 on April 28, 2009. The NBTBID's Management District Plan specifies
21-1
Public Meeting on the Proposed Modification of the Newport Beach Tourism Business
Improvement District's Management District Plan
June 26, 2018
Page 2
the district's boundaries, budget, activities, term, time and manner of collecting
assessments, and more.
Visit Newport Beach, Inc. (VNB), under an agreement with the City, serves as the
NBTBID's owners' association. As such, VNB oversees the NBTBID's administration and
coordinates its marketing and sales activities as prescribed by the NBTBID committee.
The committee is comprised of representatives from the member lodging businesses.
At the request of the owner's association, the City Council has previously modified the
Management District Plan to add new members, change the term of the NBTBID, and
increase the assessment. In April 2012, the City Council amended the NBTBID and its
Management District Plan to include the Newport Dunes Waterfront Resort & Marina with
the adoption of Resolution No. 2012-28. In January 2014, the City Council adopted
Resolution No. 2014-7, renewing the NBTBID for a 10-yearterm, adding The Island Hotel
(now known as the Fashion Island Hotel) and increasing the assessment from 2% to 3%
of gross short-term room rental revenue.
In May of this year, VNB informed the City that the NBTBID committee unanimously
approved including the Lido House in the TBID and asked the City to initiate the
Management District Plan modification process. VNB and its consultant worked with City
staff on amending the Management District Plan to include the Lido House as an NBTBID
member and to reflect other updates and changes.
Modification Process
The process to modify the NBTBID Management District Plan requires three steps. The
first was accomplished during the City Council's June 12 Regular session, when Council
approved Resolution No. 2018 — 36, A Resolution of the City Council of the City of
Newport Beach, California, Declaring its Intention to Modify the Newport Beach Tourism
Business Improvement District's Management District Plan... (See Attachment A for the
June 12 staff report, Resolution 2018-36 and amended Management District Plan.) As
required by the California Streets and Highways Code, a copy of the resolution was
mailed to every member lodging business and published in the Daily Pilot newspaper.
The second step in the modification process is to hold a public meeting to receive public
testimony on the matter. This will be accomplished during the Council's June 26 Regular
meeting. The final step is to hold a public hearing to provide an additional opportunity for
public comment on the proposed modification and for the Council to adopt a resolution to
formally approve the modified Management District Plan. The public hearing is scheduled
for July 10.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
21-2
Public Meeting on the Proposed Modification of the Newport Beach Tourism Business
Improvement District's Management District Plan
June 26, 2018
Page 3
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A - June 12, 2018 Staff Report
21-3
CITY OF ATTACHMENT A
NEWPORT BEACH
City Council Staff Report
June 12, 2018
Agenda Item No. 10
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dave Kiff, City Manager - 949-644-3001,
dkiff@newportbeachca.gov
PREPARED BY: Tara Finnigan, Deputy City Manager,
tfinnigan@newportbeachca.gov
PHONE: 949-644-3035
TITLE: Resolution of Intention to Modify the Newport Beach Tourism
Business Improvement District's Management District Plan
ABSTRACT:
The Newport Beach Tourism Business Improvement District (NBTBID) owners'
association has requested an amendment to the NBTBID's Management District Plan to
expand the TBID to include the Lido House Hotel. The City Council has the authority to
modify the Management District Plan after a public hearing is conducted on the proposed
amendments.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Adopt Resolution 2018-36, A Resolution of the City Council of the City of Newport
Beach, California, Declaring its Intention to Modify the Newport Beach Tourism
Business Improvement District's Management District Plan and Fixing the Time and
Place of a Public Meeting and Public Hearing Thereon and Giving Notice Thereof.
FUNDING REQUIREMENTS:
The current adopted budget includes sufficient funding for this project. The City of
Newport Beach (City) collects the member assessments on behalf of the NBTBID and
retains 0.25% of 1 % of the total assessments collected in order to reimburse the City for
collection and administrative costs associated with the NBTBID.
21-4
Resolution of Intention to Modify the Newport Beach
Tourism Business Improvement District's Management District Plan
June 12, 2018
Page 2
DISCUSSION:
Background
The NBTBID is a business improvement district formed pursuant to the Property and
Business Improvement District Law of 1994, codified in Streets and Highways Code
Section 36600et seq. (1994 Law), which helps fund marketing and sales promotion efforts
for the assessed Newport Beach tourism businesses. It was established by Council
Resolution 2009 - 21 on April 28, 2009. As required by state law, the NBTBID has a
Management District Plan that specifies the district's boundaries, budget, activities, term,
time and manner of collecting assessments, and more.
In April 2012, the City Council amended the NBTBID and its Management District Plan to
include the Newport Dunes Waterfront Resort & Marina with the adoption of Resolution
No. 2012-28. In January 2014, the City Council adopted Resolution No. 2014-7, renewing
the NBTBID for a 10 -year term and increasing the assessment from 2% to 3% of gross
short-term room rental revenue.
Under an agreement with the City, Visit Newport Beach, Inc. (VNB) serves as the
NBTBID's owners' association. VNB oversees the NBTBID's administration and
coordinates its marketing and sales activities as prescribed by the NBTBID committee.
The committee is comprised of representatives from the member lodging businesses.
The NBTBID currently includes eight hotels or resorts, each consisting of 100 hotel rooms
or more, located within the City of Newport Beach. They are:
Balboa Bay Resort
Fashion Island Hotel
Hyatt Regency John Wayne Airport
Newport Beach
Hyatt Regency Newport Beach
Newport Beach Marriott Bayview
Newport Beach Marriott Hotel & Spa
Newport Dunes Waterfront Resort &
Marina
Renaissance Newport Beach Hotel
Proposed Amendments
VNB informed the City that the NBTBID committee unanimously approved including the
Lido House in the TBID and asked for the Management District Plan amendment process
to be initiated (Attachment A).
VNB and its consultant, Civitas, submitted a modified Management District Plan for the
City Council's review and approval. The proposed plan is included with this staff report as
Exhibit 1 to Attachment B, the Resolution of Intention. A redline version of the modified
plan is also included (Attachment C). The amendments include:
• The addition of the Lido House Hotel (see Section I, Section IV and Appendix 2);
• The removal of language in Section I, under "Location," that said other hotels could
join the NBTBID with the approval of a majority of current TBID members and
through the execution of an agreement with the City. VNB and City staff agreed to
remove the language to avoid any potential confusion as the 1994 Law already
provides for a specific Management District Plan modification process;
21-5
Resolution of Intention to Modify the Newport Beach
Tourism Business Improvement District's Management District Plan
June 12, 2018
Page 3
• Updates to the names of some of the member lodging businesses as several have
changed in the past few years (see Section I, Section IV and Appendix 2);
• Changes to the annual budget that better reflect the actual revenue received
annually since the TBID assessment increased from 2% to 3% of gross short-term
room rental revenue and with the addition of new members.
Process for Modifying the Management District Plan
The Property and Business Improvement District Law of 1994 sets forth the process and
procedures required for modifying the Management District Plan and implementing the
amendment. If adopted, the Resolution of Intention (Attachment B) would be published in
the newspaper and a copy would be mailed to each business or property owner subject
to the NBTBID assessment affected by the proposed modification. The City Council would
then hold a public meeting on June 26 to consider the amended Management District
Plan and would conduct a public hearing on July 10 to consider adoption of the amended
plan.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Letter from Visit Newport Beach, Inc.
Attachment B — Resolution of Intention
Exhibit 1 — Amended Management District Plan
Attachment C — Redline of Amended Management District Plan
21-6
ATTACHMENT A
VISIT WEACHI
ort
NC.
May 25, 2018
Michael Torres
Assistant City Attorney
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92260
Dear Mr. Torres:
The Newport Beach Tourism Business Improvement District Board of Directors unanimously
approved the modification of its business district to include the Lido House Hotel at its meeting
on May 24, 2018. We formally request that the city begin the modification and public hearing
process to permit the addition of this property as soon as possible.
Please contact me should you have any questions.
With regards,
4?: 1 �-
Gary C. Sherwin
President/CEO
cc: Tara Finnegan, City of Newport Beach
John Lambeth, Civitas
1600 Newport Center Drive Suite 12o Newport Beach CA 9266o 800 -94 -COAST visitnewportbeach.eont
21-7
ATTACHMENT B
RESOLUTION NO. 2018- 36
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT
BEACH, CALIFORNIA, DECLARING ITS INTENTION TO MODIFY THE
NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT'S
MANAGEMENT DISTRICT PLAN AND FIXING THE TIME AND PLACE
OF A PUBLIC MEETING AND PUBLIC HEARING THEREON AND
GIVING NOTICE THEREOF
WHEREAS, on April 28, 2009, the City Council of the City of Newport Beach
("City") adopted Resolution No. 2009-21 and established the Newport Beach Tourism
Business Improvement District ("NBTBID") pursuant to the Property and Business
Improvement Law of 1994, Streets and Highways Code Sections 36600 of seq. ("1994
Law"), and a Management District Plan on file with the City Clerk;
WHEREAS, on April 24, 2012, the City Council adopted Resolution No. 2012-28,
which amended the NBTBID and the Management District Plan to include the Newport
Dunes Waterfront Resort & Marina;
WHEREAS, on January 28, 2014, the City Council adopted Resolution No. 2014-
7 renewing the NBTBID for a ten-year term;
WHEREAS, the NBTBID currently includes eight hotels and resorts and is
managed by the NBTBID's owners' association, Visit Newport Beach, Inc. ("VNB");
WHEREAS, on May 25, 2018, VNB submitted a written request approved by a
majority of the existing TBID members to the City requesting an amendment to the
Management District Plan, which among other things includes the Lido House within the
NBTBID; and
WHEREAS, the Management District Plan, which sets forth the NBTBID boundary,
service plan, budget, and means of governance may be amended by the City Council
upon the request of the VNB and following a public hearing.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: The City Council finds that the NBTBID owners' association has
requested an amendment of the Management District Plan.
Section 2: The City Council declares its intention to amend the NBTBID's
Management District Plan and levy and collect assessments on additional lodging
businesses within the NBTBID boundaries pursuant to the 1994 Law as more fully set
forth in the Amended Management District Plan, attached hereto as Exhibit "I" and
incorporated herein by reference.
Section 3: The boundaries of the NBTBID are the boundaries of the City of
Newport Beach, as depicted on the map attached to the Amended Management District
Plan.
21-8
Resolution 2018 -
Page 2 of 3
Section 4: The name of the district shall remain the Newport Beach Tourism
Business Improvement District.
Section 5: The NBTBID shall assess nine (9) hotels and resorts within the city
limits of Newport Beach three percent (3%) of gross short term (stays less than thirty (30)
days) room rental revenue. The NBTBID shall include the Balboa Bay Resort, the Fashion
Island Hotel, the Hyatt Regency John Wayne Airport Newport Beach, the Hyatt Regency
Newport Beach, the Newport Beach Marriott Bayview, the Newport Beach Marriott Hotel
& Spa, the Newport Dunes Waterfront Resort & Marina, the Renaissance Newport Beach
Hotel, and the Lido House. Gross room revenue is defined as total room revenue less
any local, state, or federal sales taxes or transient occupancy taxes. Lodging business
stays of more than thirty (30) consecutive days shall not be assessed. Based on benefits
received, stays by airline personnel and government employees on government business
shall not be assessed. Similarly, time shares shall not be assessed.
Section 6: The assessments levied for the NBTBID shall be applied to provide
specific benefits directly to the assessed businesses by increasing room night sales.
Marketing, public art, sales promotions, advertising, and communications will increase
overnight tourism and market assessed businesses as tourist, meeting and event
destinations, thereby increasing room night sales. Funds remaining at the end of any
year may be used in subsequent years in which NBTBID assessments are levied as long
as they are used consistent with the requirements of this resolution and the Amended
Management District Plan.
Section 7: Bonds will not be issued.
Section 8: The time and place for the public meeting to consider the NBTBID
Amended Management District Plan is June 26, 2018 at 7:00 p.m. or as soon thereafter
as the matter may be heard, at the City Council Chambers located at 100 Civic Center
Drive, Newport Beach, California. Pursuant to Section 36623 of the 1994 Law, the City
Clerk is directed to provide notice of this Resolution of Intention to the lodging businesses
subject to the assessment and to publish this Resolution of Intention in a newspaper of
general circulation at least ten (10) days prior to the public meeting.
Section 9: The time and place for the public hearing to consider the NBTBID
Amended Management District Plan is July 10, 2018 at 7:00 p.m. or as soon thereafter
as the matter may be heard, at the City Council Chambers located at 100 Civic Center
Drive, Newport Beach, California.
Section 10: At the public hearing, the testimony of all interested persons for or
against the Amended Management District Plan may be received. If, at the conclusion of
the public hearing, there are recorded protests by the owners of the lodging businesses
within the proposed NBTBID that will pay fifty percent (50%) or more of the estimated
total assessment of the entire NBTBID, the Management District Plan shall not be
amended.
21-9
Resolution 2018 -
Page 3 of 3
Section 11: The Amended Management District Plan is on file with the City Clerk,
100 Civic Center Drive, Newport Beach, California 92660, and may be reviewed upon
request.
Section 12: To receive additional information about the proposed assessment or
to submit a written protest, interested persons may contact the City Clerk, 100 Civic
Center Drive, Newport Beach, California 92660, (949) 644-3005.
Section 13: The recitals provided in this resolution are true and correct and are
incorporated into the operative part of this resolution.
Section 14: If any section, subsection, sentence, clause or phrase of this
resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this resolution. The City
Council hereby declares that it would have passed this resolution, and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
Section 15: The City Council finds the adoption of this resolution is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential for resulting in physical change to the environment, directly or indirectly.
Section 16: This resolution shall take effect immediately upon its adoption by the
City Council, and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this day of 2018.
Marshall "Duffy" Duffield
Mayor
ATTEST:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CITY ORNEY'S OFFICE
�' (FJl
Aaron -G. Harp
City Attorney
Attachment: Amended Management District Plan
21-10
Exhibit 1
FOR!•
'+ ril
u+Hfi
t�W� ii ■■ Art 13aim
}
NEWPORT BEACH
TOURISM BUSINESS
IMPROVEMENT DISTRICT
NEWPORT BEACH
TOURISM BUSINESS IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
I. OVERVIEW ...............................................................................................................................................1
II. IMPETUS..................................................................................................................................................3
III. BACKGROUND....................................................................................................................................4
IV. BOUNDARY...........................................................................................................................................5
V. BUDGET AND SERVICES..................................................................................................................6
A. Annual Service Plan............................................................................................................
6
B. Determination of Specific Benefit.......................................................................................
7
C. Assessment..........................................................................................................................8
D. Time and Manner for Collecting Assessments...................................................................
8
E. Penalties and Interest...........................................................................................................
9
F. Annual Budget.....................................................................................................................
9
VI. GOVERNANCE..................................................................................................................................10
A. Owners' Association.........................................................................................................
10
B. Brown Act and California Public Records Act Compliance .............................................
10
C. Annual Report ...................................................................................................................
10
APPENDIX1 — LAW....................................................................................................................................11
APPENDIX 2 — ASSESSED BUSINESSES.............................................................................................23
Prepared by
00♦
C IV I TA S
Civitas Advisors Inc.
(800)999-7781
www.civitasadvisors.com
21-12
I. OVERVIEW
Administered by Visit Newport Beach, Inc. (VNB), the Newport Beach Tourism Business
Improvement District (NBTBID) is a business improvement district created to provide specific
benefits to its member businesses, by funding marketing and sales promotion efforts for the assessed
businesses. The NBTBID was formed by the City of Newport Beach (City) in 2009, pursuant to the
Property and Business Improvement District Law of 1994, Streets and Highways Code Sections 36600
et seq. Upon the request of the NBTBID Owner's Association, the City Council modified the
NBTBID in 2012 to add another lodging business. In January 2014, in response to a request by the
Owners' Association, the City Council renewed the NBTBID for a 10 -year term and increased the
assessment from two (2.0%) percent to three (3.0%) percent of gross short-term revenue.
Location: The City of Newport Beach. The NBTBID includes nine (9) lodging businesses
located within the boundaries of the City of Newport Beach.
The NBTBID shall include the Balboa Bay Resort the Fashion Island Hotel, the Hyatt
Regency John Wayne Airport Newport Beach, the Hyatt Regency Newport Beach, the
Newport Beach Marriott Bayview, the Newport Beach Marriott Hotel & Spa, the
Newport Dunes Waterfront Resort & Marina, the Renaissance Newport Beach Hotel,
the Lido House, and any other hotel and resort business that may join the NBTBID
in the future.
Services: The NBTBID is designed to provide specific benefits directly to assessed businesses
by increasing room night sales. The improvements and activities include those
improvements and activities provided in Streets and Highways Code sections 36610
and 36613, and include, but are not limited to, sales marketing and direct sales
programs to increase overnight tourism and market the assessed businesses as tourist
meeting and event destinations, thereby increasing room night sales. These some
improvements and activities are proposed for each year of the NBTBID's ten (10) year
term.
Budget: The total NBTBID annual budget for the initial year, and subsequent years, is
anticipated to be approximately $4,100,000. This budget is expected to fluctuate as
room sales do, but is not expected to significantly change over the NBTBID's ten (10)
year term.
Cost: The annual assessment rate is three percent (3.0%) of gross short-term (i.e., stays of
thirty (30) calendar days or less) room rental revenue. Because programs will not be
designed to attract certain stays, certain types of stays will not be assessed, as described
in Section V(C).
Duration: The proposed NBTBID will have a ten (10) year term. The NBTBID assessment will
be implemented beginning February 1, 2014, and will be in effect for ten (10) years
through January 31, 2024. After ten (10) years, the petition and City Council hearing
process must be repeated for the NBTBID to be renewed. Also, once per year
beginning on the anniversary of the formation of the NBTBID, there is a thirty (30)
calendar day period in which assessed businesses paying more than fifty percent (50%)
Overview I Newport Beach Tourism Business Improvement District
21-13
of the assessments may protest and initiate a City Council hearing to terminate the
NBTBID.
Management: VNB will serve as the NBTBID's Owners' Association. The Owners' Association is
charged with managing funds and implementing programs in accordance with this
plan, and must provide annual reports to the City Council.
Renewal: The NBTBID renewal requires submission of petitions from lodging businesses
representing more than fifty percent (50%) of the total annual assessment followed
by a City Council public meeting and public hearing and an opportunity for written
protest The assessed lodging business owners will receive a notice of the public
meeting and the public hearingby mail. If there is no majority protest, the City Council
may adopt a resolution renewing the NBTBID.
Overview I Newport Beach Tourism Business Improvement District
21-14
II. IMPETUS
There are several reasons why the NBTBID should be renewed, the most compelling reasons are as
follows:
L The Need to Increase Occupancy
The renewal of the NBTBID is a proactive effort to provide supplemental funding for tourism
promotion beyond that provided by the City. The funding will ensure that adequate financing
exists for the investment required to increase occupancy in the lodging industry and be
competitive in the conference segment of the tourism market. The investment will cover an
expanded marketing and promotional budget needed to reach this market segment
2. An Opportunity, for lncreasing City, Tax Revenues
As occupancy rates increase, so too will the City's TOT revenue. With stable public/private
funding for tourism marketing efforts, annual occupancy rates should increase significantly as
new marketing and sales promotion programs are implemented. Greater occupancy will also
produce an increase in sales tax revenues from tourism -related spending. The renewal of the
NBTBID, in partnership with VNB, creates a stable funding source tied directly to tourism
promotion.
3. Stable Funding for TounsmPromotion
The NBTBID will provide a stable source of funding for consistent tourism promotion
efforts. The NBTBID will provide funding for tourism promotion free of the political and
economic circumstances that can reduce or eliminate government funding for tourism
promotion.
Impetus I Newport Beach Tourism Business Improvement District
21-15
III. BACKGROUND
Tourism Business Improvement Districts (TBIDs) are an evolution of the traditional Business
Improvement District. The first TBID was formed in West Hollywood, California in 1992. Since
then, over 80 California destinations have followed suit In recent years, other states have begun
adopting the California model Washington, Montana, and Texas have adopted TBID laws. Several
other states are in the process of adopting their own legislation. And, some cities, like Portland,
Oregon, have utilized their charter
Number ofilos operating Per Year powers to create TBIDs without a
70 state law.
60
50
40
30
20
10
0
California's TBIDs collectively raise
over one hundred fifty million
dollars ($150,000,000) annually for
local destination marketing. With
competitors raising their budgets,
and increasing rivalry for visitor
dollars, it is important that the
Newport Beach lodging businesses
continue their investment in stable,
lodgingspecificmarketing
programs.
Y Y N N N N N N N N N N N N N
0
N N O Y N W A N S J . W O Y N
TBIDs utilize the efficiencies of
private -sector operation in the market-based promotion of tourism districts. TBIDs allow lodging
business owners to organize their efforts to increase room night sales. Lodging business owners
within the TBID pay an assessment and those funds are used to provide services that increase room
night sales.
In California, TBIDs are formed pursuant to the Property and Improvement District Law of 1994.
This law allows for the creation of a special benefit assessment district to raise funds within a specific
geographic area. The key difference between TBIDs and other special benefit assessment districts is that unds raised
are allocated to the Private, non -Profit corporation governing the district.
There are many benefits to a TBID:
• Funds must be spent on services and improvements that provide a specific and special benefit
only to those who pay,
• Funds cannot be diverted to general government programs;
• They are customized to fit the needs of the assessed businesses in each destination;
• They allow for a wide range of services;
• They are designed, created andgovemed by those who willpay the assessment; and
• They provide a stable funding source for tourism promotion.
Background I Newport Beach Tourism Business Improvement District
21-16
i
California's TBIDs collectively raise
over one hundred fifty million
dollars ($150,000,000) annually for
local destination marketing. With
competitors raising their budgets,
and increasing rivalry for visitor
dollars, it is important that the
Newport Beach lodging businesses
continue their investment in stable,
lodgingspecificmarketing
programs.
Y Y N N N N N N N N N N N N N
0
N N O Y N W A N S J . W O Y N
TBIDs utilize the efficiencies of
private -sector operation in the market-based promotion of tourism districts. TBIDs allow lodging
business owners to organize their efforts to increase room night sales. Lodging business owners
within the TBID pay an assessment and those funds are used to provide services that increase room
night sales.
In California, TBIDs are formed pursuant to the Property and Improvement District Law of 1994.
This law allows for the creation of a special benefit assessment district to raise funds within a specific
geographic area. The key difference between TBIDs and other special benefit assessment districts is that unds raised
are allocated to the Private, non -Profit corporation governing the district.
There are many benefits to a TBID:
• Funds must be spent on services and improvements that provide a specific and special benefit
only to those who pay,
• Funds cannot be diverted to general government programs;
• They are customized to fit the needs of the assessed businesses in each destination;
• They allow for a wide range of services;
• They are designed, created andgovemed by those who willpay the assessment; and
• They provide a stable funding source for tourism promotion.
Background I Newport Beach Tourism Business Improvement District
21-16
IV. BOUNDARY
The NBTBID will include nine (9) lodging businesses, available for public occupancy within the
boundaries of the City of Newport Beach, and other hotels and resorts that may join NBTBID in the
future.
The boundary, as shown in the map below, currently includes nine (9) lodging businesses. A complete
listing of lodging businesses within the NBTBID can be found in Appendix 2.
` '3
Hyatt Reaenry Jahn WaV%a
Newport /lirport Newrt Beach
Newport Beach *1
•
Renaissance Newport
City Limits 71 Beady HoM
Newport Beach Marriott Ba
Newport Beach TBID
3D
2e m
0
55 �
lm m
D
c
,c
Fashion Island Hotel a
• ReBencT
Bexh Q //)(
Ba6oa Bay Resat
.Newport Beach Mamott HaEe18 Spa
Newport9rant
K, Resart a M"
0ryB
B
f'aci/ic ocean
CIVITAS
Boundary I Newport Beach Tourism Business Improvement District
21-17
V. BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred, or privileges granted directly
to, the assessed businesses that are not provided to those not charged, and which do not exceed the
reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and
services provided with the NBTBID funds are sales, marketing, advertising, and promotional
programs available only to assessed businesses.
A service plan budget has been developed to deliver services that benefit businesses throughout the
NBTBID. A detailed annual budget will be developed by the Owners' Association and approved by
the City Council. The table below illustrates the initial annual budget allocations.
Sales Marketing — Direct Sales
92.00%
$3,772,000
Sales Administration
6.25%
$256,250
Contingency
1.50%
$61,500
City Collection
0.25%
$10,250
Total Annual Budget
100%
$4,100,000
Actual annual revenues will fluctuate due to market conditions, but are not expected to change
significantly over the term of the district The budget above is for the initial year, the some activities
are proposed for subsequent years. VNB shall adopt specific budgets after the initial year. A
description of the proposed improvements and activities for the initial year of operation is below.
Sales Marketing — Direct Sales
A sales marketing program will promote assessed businesses as tourist, meeting, and event
destinations. The programs will be focused on attracting group sales to assessed businesses. Only
assessed businesses will receive benefits featured in, and obtain leads from, the sales and marketing
activities. The sales and marketing program will have a central theme of promoting the assessed
Newport Beach lodging businesses as desirable places for group events. The program will have the
goal of increasing overnight visitation and room night sales at assessed businesses, and may include
the following activities:
• Internet marketing efforts to increase awareness and optimize internet presence for assessed
businesses;
• Print ads in magazines and trade publications featuring assessed businesses and targeted at
potential group meeting planners;
• Sales missions and sales calls to attract groups to assessed businesses;
• Costs related to providing sales marketing and direct sales programs;
• Client events designed to book new and returning groups at assessed businesses;
• Familiarization tours of assessed businesses;
• Preparation and production of collateral promotional materials such as brochures, flyers and
maps featuring assessed businesses;
• Attendance of professional industry conferences and affiliation events on behalf of assessed
businesses; and
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• Lead generation activities designed to attract group events to assessed businesses.
The sales solicitation portion of the budget will be utilized to support direct sales efforts, including
personnel and sales support teams that conduct outreach to clients, provide site inspections and work
with assessed hotels to close select group business.
Sales — Administration
The sales administration portion of the budget will be utilized for administrative costs related to
providing the sales programs. This may include office costs, and other general administrative costs,
such as insurance, legal, and accounting fees. Legal fees may include defense of the NBTBID.
City Administration Fee
The City of Newport Beach shall be paid a fee equal to one quarter of one percent (0.25%) of the
amount of assessment collected to cover its costs of collection and administration.
Contingency
A prudent portion of the budget will be held in a contingency reserve. These funds may be used to
cover unanticipated program or administrative costs. If, at expiration of the NBTBID, there are
contingency funds remaining and hotels wish to renew the district, the contingency funds could be
used for the renewal effort
B. Determination of Specific Benefit
State law requires that assessment funds be expended on a specific benefit conferred directly to the
assessed businesses that is not provided to those not charged, and which does not exceed the
reasonable cost to the City conferring the benefit. The services in this Management District Plan are
designed to provide targeted benefits directly to assessed businesses. These services are tailored not
to serve the general public, but rather to serve the specific assessed businesses within the NBTBID
(e.g., the proposed activities are specifically targeted to increase room night sales for assessed
businesses within the boundaries of the NBTBID, and are narrowly tailored). NBTBID funds will be
used exclusively to provide the specific benefit of increased room night sales directly to the businesses.
Non -assessed businesses will not be featured in NBTBID programs and will not receive sales leads
from them. The activities paid for from assessment revenues are business services constituting and
providing specific benefits to the assessed businesses. To the extent any non-paying business benefits
from TBID programs, that portion of the program will be paid for with non -assessment funds.
Further, the assessment may be utilized to provide specific government services directly to the
assessed businesses that are not provided to those not charged, and which do not exceed the
reasonable costs to the City providing the services. Marketing like that to be provided by the NBTBID
has been and is provided by the City, through its contract with VNB. The amount of the assessment
is no more than necessary to cover the reasonable costs of the proposed activities, and the manner in
which the costs are allocated to a business owner bear a fair share and bears a reasonable relationship
to the assessed businesses' benefits received from the proposed activities.
NBTBID services will be implemented carefully to ensure they do not exceed the reasonable cost of
such services. Funds will be managed by the Owners' Association, and reports submitted on an annual
basis to the City. Only assessed businesses will be featured in marketing materials, receive sales leads
generated from NBTBID-funded activities, be featured in advertising campaigns, and benefit from
other NBTBID-funded services. Non -assessed businesses will not receive these, nor any other,
NBTBID-funded services and benefits.
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C. Assessment
The annual assessment rate is three (3) percent of gross short-term (stays of thirty (30) calendar days
or less) room rental revenue. Based on the benefit received, assessments will not be collected on stays
of more than thirty (30) consecutive calendar days. Based on the benefit received and because these
types of stays will not be sought after by the NBTBID programs, the following stays are not subject
to TOT under the Newport Beach Municipal Code (Section 3.16.040) and are not subject to
assessment:
• Stays by any officer or employee of a foreign government who is exempt from
payment of transient occupancy taxes by reason of express provision of Federal law
or international treaty,
• Stays by a transient occupying a hotel pursuant to a qualifying rental agreement entered
into prior to the first day of occupancy,
• Stays by an employee of an airline company who is occupying a hotel room in the
course of his or her employment, but only when the room is rented by the airline
employer pursuant to a qualifying rental agreement that has been preapproved by the
City's Finance Director,
• Stays by any person or transient occupying a hotel room provided without rent charged
(complimentary) to the person or transient by the operator, including but not limited
to:
1. Rooms provided to charitable organizations;
2. Rooms provided to meeting planners who may book future hotel
rooms and provide business and conferencing opportunities for the
economic benefit of the hotel;
3. Rooms provided to displeased guests; and/or
4. Rooms provided to hotel employees.
The term "rent' shall mean the consideration charged, whether or not received, for the occupancy of
space in a hotel valued in money, whether to be received in money, goods, labor or otherwise,
including all receipts, cash, credits, and property and services of any kind or nature, without any
deduction. Rent shall include the consideration charged by a business for accommodations, including
any (A) un -refunded advance rental deposits or (B) separate charges levied for items or services which
are part of such accommodations including, but not limited to, furniture, fixtures, appliances, linens,
towels, non -coin-operated safes, utilities (such as energy surcharges) and maid service. Rent shall not
include any federal, state or local taxes collected, including but not limited to transient occupancy
taxes.
The amount of assessment if passed on to each transient, shall be disclosed in advance and separately
stated from the amount of rent charged and any other applicable taxes, and each transient shall receive
a receipt for payment from the business. The assessment shall not be considered revenue for any
purposes, including calculation of transient occupancy taxes.
Bonds may not be issued.
D. Time and Manner for Collecting Assessments
The NBTBID assessment will be implemented beginning February 1, 2014 and will continue for 10
years through January 31, 2024. The City, or its designee, is responsible for collecting the assessment
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on a monthly basis (including any delinquencies, penalties and interest) from each assessed business
located in the boundaries of the NBTBID. The City, or its designee, shall take all reasonable efforts
to collect the assessments from each assessed business. The City shall forward the assessments
collected to the Owners' Association.
E. Penalties and Interest
1. Any assessed business which fails to remit any assessment within the time required shall pay a
penalty of ten (10) percent of the amount of the assessment in addition to the amount of the assessment
(initial penalty).
2. Any business that fails to remit the assessment and initial penalty on or before a period of thirty
(30) calendar days following the date on which the assessment firstbecame delinquent shall pay a second
delinquency penalty of ten (10) percent on both the amount of the assessment and the initial penalty
(second penalty).
3. In addition to the penalties imposed, any assessed business that fails to remit any assessment shall
pay interest on the amount of assessment that is due and owing at the rate of one and one-half of one
percent (1-'/2%) per month for each month or portion of a month that the assessment remains unpaid
exclusive of penalties. For purposes of collection, every penalty imposed and such interest as accrues shall
become a part of the assessment required to be paid.
4. In addition to the penalties and interest provided in this section, the assessed business shall
reimburse the City or Owners' Association for costs in performance of an audit if, as a result of the audit,
it is determined there was any intentional misrepresentation by the assessed business with respect to the
amount of assessment due or there is a five percent (5%) or greater discrepancy between the amount of
annual assessment due and the amount paid by the business. Such reimbursement shall be paid by
business within thirty (30) calendar days of the assessed business being notified in writing of the amount
of audit costs.
F. Annual Budget
The total ten (10) year improvement and service plan budget is projected at approximately $4,100,000
annually, or $41,000,000 through the ten (10) year term. This amount may fluctuate as sales and
revenue increase at assessed businesses.
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VI. GOVERNANCE
A. Owners' Association
The City Council, through adoption of this Management District Plan, has the right, pursuant to
Streets and Highways Code section 36651, to identify the body that shall implement the proposed
program, which shall be the Owners' Association of the NBTBID as defined in Streets and Highways
Code section 36614.5. The City Council has determined that Visit Newport Beach, Inc. will serve as
the Owners' Association for the NBTBID.
B. Brown Act and California Public Records Act Compliance
An Owners' Association is a private entity and may not be considered a public entity for any purpose,
nor may its board members or staff be considered to be public officials for any purpose. The Owner's
Association is, however, subject to government regulations relating to transparency, namely the Ralph
M. Brown Act and the California Public Records Act. These regulations are designed to promote
public accountability. The Owners' Association is considered a legislative body under the Ralph M.
Brown Act (Government Code sections 54950 et seq.). Thus, meetings of the VNB board and certain
committees, to the extent they discuss the TBID, must be held in compliance with the public notice
and other requirements of the Brown Act The Owners' Association is also subject to the record
keeping and disclosure requirements of the California Public Records Act.
C. Annual Report
VNB shall present an annual report at the end of each year of operation to the City Council pursuant
to Streets and Highways Code section 36650 (see Appendix 1).
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APPENDIX 1 - LAW
*** THIS DOCUMENT IS CURRENT THROUGH THE 2018 SUPPLEMENT ***
(ALL 2017 LEGISLATION)
STREETS AND HIGHWAYS CODE
DIVISION 18. PARKING
PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994
CHAPTER 1. General Provisions
ARTICLE 1. Declarations
36600. Citation of part
This part shall be known and may be cited as the "Property and Business Improvement District Law of 1994."
36601. Legislative findings and declarations; Legislative guidance
The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state's communities are
economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate
facilities, services, and activities in the business districts.
(b) It is in the public interest to promote the economic revitalization and physical maintenance of business
districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts.
(c) It is of particular local benefit to allow business districts to fund business related improvements,
maintenance, and activities through the levy of assessments upon the businesses or real property that
receive benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific
benefit upon the businesses in a business district are not taxes for the general benefit of a city, even if
property, businesses, or persons not assessed receive incidental or collateral effects that benefit them.
(e) Property and business improvement districts formed throughout this state have conferred special
benefits upon properties and businesses within their districts and have made those properties and businesses
more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12 -percent reduction in the
incidence of robbery and an 8 -percent reduction in the total incidence of violent crimes within the
30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business
improvement districts have become even more important tools with which communities can combat blight,
promote economic opportunities, and create a clean and safe environment.
(g) Since the enactment of this act, the people of California have adopted Proposition 218, which added
Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation
of, and activities, expenditures, and assessments by property -based districts. Article XIII D of the
Constitution provides that property -based districts may only levy assessments for special benefits.
(h) The act amending this section is intended to provide the Legislature's guidance with regard to this act,
its interaction with the provisions of Article XIII D of the Constitution, and the determination of special
benefits in property -based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this
act, which discourages the use of assessments to fund needed improvements, maintenance, and
activities in property -based districts, contributing to blight and other underutilization of property.
(2) Activities undertaken for the purpose of conferring special benefits upon property to be
assessed inherently produce incidental or collateral effects that benefit property or persons not
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assessed. Therefore, for special benefits to exist as a separate and distinct category from general
benefits, the incidental or collateral effects of those special benefits are inherently part of those
special benefits. The mere fact that special benefits produce incidental or collateral effects that
benefit property or persons not assessed does not convert any portion of those special benefits or
their incidental or collateral effects into general benefits.
(3) It is of the utmost importance that property -based districts created under this act have clarity
regarding restrictions on assessments they may levy and the proper determination of special
benefits. Legislative clarity with regard to this act will provide districts with clear instructions and
courts with legislative intent regarding restrictions on property -based assessments, and the manner
in which special benefits should be determined.
36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy
assessments within property and business improvement districts, to ensure that those assessments conform to all
constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act
This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of
improvements or activities or the raising of revenue for these purposes.
36603. Preemption of authority or charter city to adopt ordinances levying assessments
Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a
different method of levying assessments for similar or additional purposes from those set forth in this part. A
property and business improvement district created pursuant to this part is expressly exempt from the provisions of
the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with
Section 2800)).
36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law,
as to districts created under this part
36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall
remain in full force and effect. Assessments levied under this part are not special taxes.
ARTICLE 2. Definitions
36606. "Activities"
"Activities" means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment.
(e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal
services supplemental to those normally provided by the municipality.
(f) Other services provided for the purpose of conferring special benefit upon assessed real property or
specific benefits upon assessed businesses located in the district.
36606.5. "Assessment'
"Assessment" means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and
providing activities that will provide certain benefits to properties or businesses located within a property and
business improvement district.
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36607. "Business"
"Business" means all types of businesses and includes financial institutions and professions.
36608. "City"
"City" means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with
Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which
includes only cities, counties, or a city and county, or the State of California.
36609. "City council"
"City council" means the city council of a city or the board of supervisors of a county, or the agency, commission,
or board created pursuant to a joint powers agreement and which is a city within the meaning of this part
36609.4. "Clerk"
"Clerk" means the clerk of the legislative body.
36609.5. "General benefit"
"General benefit" means, for purposes of a property -based district, any benefit that is not a "special benefif' as
defined in Section 36615.5.
36610. "Improvement"
"Improvement" means the acquisition, construction, installation, or maintenance of any tangible property with an
estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs.
(c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets.
0) Facilities or equipment, or both, to enhance security of persons and property within the district.
(k) Ramps, sidewalks, plazas, and pedestrian malls.
(1) Rehabilitation or removal of existing structures.
36611. "Management district plan"; "Plan"
"Management district plan" or "plan" means a proposal as defined in Section 36622.
36612. "Owners' association"
"Owners' association" means a private nonprofit entity that is under contract with a city to administer or implement
improvements, maintenance, and activities specified in the management district plan. An owners' association may
be an existing nonprofit entity or a newly formed nonprofit entity. An owners' association is a private entity and
may not be considered a public entity for any purpose, nor may its board members or staff be considered to be
public officials for any purpose. Notwithstanding this section, an owners' association shall comply with the Ralph
M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government
Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and
with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the
Government Code), for all records relating to activities of the district.
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36614. "Property"
"Property" means real property situated within a district
36614.5. "Property and business improvement district"; "District'
"Property and business improvement district," or "district," means a property and business improvement district
established pursuant to this part.
36614.6. "Property -based assessment'
"Property -based assessment" means any assessment made pursuant to this part upon real property.
36614.7. "Property -based district'
"Property -based district" means any district in which a city levies a property -based assessment.
36615. "Property owner"; "Business owner"; "Owner"
"Property owner" means any person shown as the owner of land on the last equalized assessment roll or otherwise
known to be the owner of land by the city council. "Business owner" means any person recognized by the city as the
owner of the business. "Owner" means either a business owner or a property owner. The city council has no
obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership
shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property
owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the
signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient.
36615.5. "Special benefit'
"Special benefit" means, for purposes of a property -based district, a particular and distinct benefit over and above
general benefits conferred on real property located in a district or to the public at large. Special benefit includes
incidental or collateral effects that arise from the improvements, maintenance, or activities of property -based
districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit
excludes general enhancement of property value.
36616. "Tenant'
"Tenant" means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner
ARTICLE 3. Prior Law
36617. Alternate method of financing certain improvements and activities; Effect on other provisions
This part provides an alternative method of financing certain improvements and activities. The provisions of this
part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements
or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the
Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is
valid and effective and is unaffected by this part
CHAPTER 2. Establishment
36620. Establishment of property and business improvement district
A property and business improvement district may be established as provided in this chapter.
36620.5. Requirement of consent of city council
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A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of
that city. A city may not form a district within the unincorporated territory of a county without the consent of the
board of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city
without the consent of the city council of the other city.
36621. Initiation of proceedings; Petition of property or business owners in proposed district
(a) Upon the submission of a written petition, signed by the property or business owners in the proposed
district who will pay more than 50 percent of the assessments proposed to be levied, the city council may
initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a
district. The amount of assessment attributable to property or a business owned by the same property or
business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall
not be included in determining whether the petition is signed by property or business owners who will pay
more than 50 percent of the total amount of assessments proposed to be levied.
(b) The petition of property or business owners required under subdivision (a) shall include a summary of
the management district plan. That summary shall include all of the following:
(1) A map showing the boundaries of the district.
(2) Information specifying where the complete management district plan can be obtained.
(3) Information specifying that the complete management district plan shall be furnished upon
request.
(c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of
the proposed assessment, a statement as to whether the assessment will be levied on property or
businesses within the district, a statement as to whether bonds will be issued, and a description of
the exterior boundaries of the proposed district, which may be made by reference to any plan or
map that is on file with the clerk. The descriptions and statements do not need to be detailed and
shall be sufficient if they enable an owner to generally identify the nature and extent of the
improvements, maintenance, and activities, and the location and extent of the proposed district
(2) A time and place for a public hearing on the establishment of the property and business
improvement district and the levy of assessments, which shall be consistent with the requirements
of Section 36623.
36622. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each
parcel of property and, if businesses are to be assessed, each business within the district. If the assessment
will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a
business owner to reasonably determine whether a business is located within the district boundaries. If the
assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each
parcel of property and to allow a business owner to reasonably determine whether a business is located
within the district boundaries.
(b) The name of the proposed district
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for
establishment or extension in a manner sufficient to identify the affected property and businesses included,
which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a
proposed property assessment district shall not overlap with the boundaries of another existing property
assessment district created pursuant to this part. This part does not prohibit the boundaries of a district
created pursuant to this part to overlap with other assessment districts established pursuant to other
provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989
(Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business
assessment district created pursuant to this part to overlap with another business assessment district created
pursuant to this part This part does not prohibit the boundaries of a business assessment district created
pursuant to this part to overlap with a property assessment district created pursuant to this part
(d) The improvements, maintenance, and activities proposed for each year of operation of the district and
the maximum cost thereof. If the improvements, maintenance, and activities proposed for each year of
operation are the same, a description of the first year's proposed improvements, maintenance, and activities
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and a statement that the same improvements, maintenance, and activities are proposed for subsequent years
shall satisfy the requirements of this subdivision.
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and
debt service in each year of operation of the district. If the assessment is levied on businesses, this amount
may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in
each year of operation of the district is not significantly different, the amount proposed to be expended in
the initial year and a statement that a similar amount applies to subsequent years shall satisfy the
requirements of this subdivision.
(f) The proposed source or sources of financing, including the proposed method and basis of levying the
assessment in sufficient detail to allow each property or business owner to calculate the amount of the
assessment to be levied against his or her property or business. The plan also shall state whether bonds will
be issued to finance improvements.
(g) The time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum
number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years.
Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements
with bonds may levy assessments until the maximum maturity of the bonds. The management district plan
may set forth specific increases in assessments for each year of operation of the district.
(i) The proposed time for implementation and completion of the management district plan.
0) Any proposed rules and regulations to be applicable to the district.
(k) (1) A list of the properties or businesses to be assessed, including the assessor's parcel numbers
for properties to be assessed, and a statement of the method or methods by which the expenses of a
district will be imposed upon benefited real property or businesses, in proportion to the benefit
received by the property or business, to defray the cost thereof.
(2) In a property -based district, the proportionate special benefit derived by each identified parcel
shall be determined exclusively in relationship to the entirety of the capital cost of a public
improvement, the maintenance and operation expenses of a public improvement, or the cost of the
activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of
the proportional special benefit conferred on that parcel. Only special benefits are assessable, and
a property -based district shall separate the general benefits, if any, from the special benefits
conferred on a parcel. Parcels within a property -based district that are owned or used by any city,
public agency, the State of California, or the United States shall not be exempt from assessment
unless the governmental entity can demonstrate by clear and convincing evidence that those
publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary,
or collateral effects that arise from the improvements, maintenance, or activities of a property -
based district and that benefit property or persons not assessed shall not be deducted from the
entirety of the cost of any special benefit or affect the proportionate special benefit derived by
each identified parcel.
(1) In a property -based district, the total amount of all special benefits to be conferred upon the properties
located within the property -based district.
(m) In a property -based district, the total amount of general benefits, if any.
(n) In a property -based district, a detailed engineer's report prepared by a registered professional engineer
certified by the State of California supporting all assessments contemplated by the management district
plan.
(o) Any other item or matter required to be incorporated therein by the city council.
36623. Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and
hearing procedure shall comply with Section 53753 of the Government Code.
(b) If a city council proposes to levy a new or increased business assessment, the notice and protest and
hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be
mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing
by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for
the public hearing. The city council may waive any irregularity in the form or content of any written
protest. A written protest may be withdrawn in writing at any time before the conclusion of the public
hearing. Each written protest shall contain a description of the business in which the person subscribing the
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protest is interested sufficient to identify the business and, if a person subscribing is not shown on the
official records of the city as the owner of the business, the protest shall contain or be accompanied by
written evidence that the person subscribing is the owner of the business or the authorized representative. A
written protest that does not comply with this section shall not be counted in determining a majority protest.
If written protests are received from the owners or authorized representatives of businesses in the proposed
district that will pay 50 percent or more of the assessments proposed to be levied and protests are not
withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed
assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of
one year from the date of the finding of a majority protest by the city council.
(c) If a city council proposes to conduct a single proceeding to levy both a new or increased property
assessment and a new or increased business assessment, the notice and protest and hearing procedure for
the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure
for the business assessment shall comply with subdivision (b). If a majority protest is received from either
the property or business owners, that respective portion of the assessment shall not be levied. The
remaining portion of the assessment may be levied unless the improvement or other special benefit was
proposed to be funded by assessing both property and business owners.
36624. Changes to proposed assessments
At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or
modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with
the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the
public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and
business improvement district that will exclude territory that will not benefit from the proposed improvements,
maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district
shall be reflected in the notice and map recorded pursuant to Section 36627.
36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business
improvement district, the city council shall adopt a resolution of formation that shall include, but is not
limited to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of
the proposed assessment, a statement as to whether the assessment will be levied on property,
businesses, or both within the district, a statement on whether bonds will be issued, and a
description of the exterior boundaries of the proposed district, which may be made by reference to
any plan or map that is on file with the clerk. The descriptions and statements need not be detailed
and shall be sufficient if they enable an owner to generally identify the nature and extent of the
improvements, maintenance, and activities and the location and extent of the proposed district.
(2) The number, date of adoption, and title of the resolution of intention.
(3) The time and place where the public hearing was held concerning the establishment of the
district.
(4) A determination regarding any protests received. The city shall not establish the district or levy
assessments if a majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district
established by the resolution shall be subject to any amendments to this part.
(6) A statement that the improvements, maintenance, and activities to be conferred on businesses
and properties in the district will be funded by the levy of the assessments. The revenue from the
levy of assessments within a district shall not be used to provide improvements, maintenance, or
activities outside the district or for any purpose other than the purposes specified in the resolution
of intention, as modified by the city council at the hearing concerning establishment of the district.
Notwithstanding the foregoing, improvements and activities that must be provided outside the
district boundaries to create a special or specific benefit to the assessed parcels or businesses may
be provided, but shall be limited to marketing or signage pointing to the district.
(7) A finding that the property or businesses within the area of the property and business
improvement district will be benefited by the improvements, maintenance, and activities funded
Appendix I — Law I Newport Beach Tourism Business Improvement District
21-29
by the proposed assessments, and, for a property -based district, that property within the district
will receive a special benefit.
(8) In a property -based district, the total amount of all special benefits to be conferred on the
properties within the property -based district.
(b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant
to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the
management district plan.
36626. Resolution establishing district
If the city council, following the public hearing, desires to establish the proposed property and business
improvement district, and the city council has not made changes pursuant to Section 36624, or has made changes
that do not substantially change the proposed assessment, the city council shall adopt a resolution establishing the
district. The resolution shall contain all of the information specified in Section 36625.
36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625 or
Section 36626, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other
provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this
part
36628. Establishment of separate benefit zones within district; Categories of businesses
The city council may establish one or more separate benefit zones within the district based upon the degree of
benefit derived from the improvements or activities to be provided within the benefit zone and may impose a
different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may
also define categories of businesses based upon the degree of benefit that each will derive from the improvements or
activities to be provided within the district and may impose a different assessment or rate of assessment on each
category of business, or on each category of business within each zone.
36628.5. Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant
to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the
distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property -
based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622.
36629. Provisions and procedures applicable to benefit zones and business categories
All provisions of this part applicable to the establishment, modification, or disestablishment of a property and
business improvement district apply to the establishment, modification, or disestablishment of benefit zones or
categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of
business, follow the procedure to establish, modify, or disestablish a property and business improvement district.
36630. Expiration of district; Creation of new district
If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of
Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part
CHAPTER 3. Assessments
36631. Time and manner of collection of assessments; Delinquent payments
The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by
the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the
same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and
Appendix 1 — Law I Newport Beach Tourism Business Improvement District
21-30
penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be
charged interest and penalties.
36632. Assessments to be based on estimated benefit; Classification of real property and businesses;
Exclusion of residential and agricultural property
(a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated
benefit to the real property within the property and business improvement district The city council may
classify properties for purposes of determining the benefit to property of the improvements and activities
provided pursuant to this part.
(b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated
benefit to the businesses within the property and business improvement district. The city council may
classify businesses for purposes of determining the benefit to the businesses of the improvements and
activities provided pursuant to this part.
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively
presumed not to benefit from the improvements and service funded through these assessments, and shall
not be subject to any assessment pursuant to this part.
36633. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in any action or proceeding unless the
action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to
Section 36626. Any appeal from a final judgment in an action or proceeding shall be perfected within 30 days after
the entry of judgment.
36634. Service contracts authorized to establish levels of city services
The city council may execute baseline service contracts that would establish levels of city services that would
continue after a property and business improvement district has been formed.
36635. Request to modify management district plan
The owners' association may, at any time, request that the city council modify the management district plan. Any
modification of the management district plan shall be made pursuant to this chapter.
36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention
(a) Upon the written request of the owners' association, the city council may modify the management
district plan after conducting one public hearing on the proposed modifications. The city council may
modify the improvements and activities to be funded with the revenue derived from the levy of the
assessments by adopting a resolution determining to make the modifications after holding a public hearing
on the proposed modifications. If the modification includes the levy of a new or increased assessment, the
city council shall comply with Section 36623. Notice of all other public hearings pursuant to this section
shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city
once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10
days before the public hearing, to each business owner or property owner affected by the proposed
modification.
(b) The city council shall adopt a resolution of intention which states the proposed modification prior to the
public hearing required by this section. The public hearing shall be held not more than 90 days after the
adoption of the resolution of intention.
36637. Reflection of modification in notices recorded and maps
Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant
to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.
Appendix 1 — Law I Newport Beach Tourism Business Improvement District
21-31
CHAPTER 3.5. Financing
36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments
(a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the
estimated cost of some or all of the proposed improvements described in the resolution of formation
adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides
for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with
Section 8500)) or in conjunction with Marks -Roos Local Bond Pooling Act of 1985 (Article 4
(commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either
act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although
proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate
assessments levied upon business pursuant to this part.
(b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements
specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of
those improvements, specify the number of annual installments and the fiscal years during which they are
to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue
estimated to be raised from assessments over 30 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on
any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with
the timely retirement of the debt.
CHAPTER 4. Governance
36650. Report by owners' association; Approval or modification by city council
(a) The owners' association shall cause to be prepared a report for each fiscal year, except the first year, for
which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and
activities described in the report The owners' association's first report shall be due after the first year of
operation of the district. The report may propose changes, including, but not limited to, the boundaries of
the property and business improvement district or any benefit zones within the district, the basis and
method of levying the assessments, and any changes in the classification of property, including any
categories of business, if a classification is used.
(b) The report shall be filed with the clerk and shall refer to the property and business improvement district
by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall
contain all of the following information:
(1) Any proposed changes in the boundaries of the property and business improvement district or
in any benefit zones or classification of property or businesses within the district.
(2) The improvements, maintenance, and activities to be provided for that fiscal year.
(3) An estimate of the cost of providing the improvements, maintenance, and activities for that
fiscal year.
(4) The method and basis of levying the assessment in sufficient detail to allow each real property
or business owner, as appropriate, to estimate the amount of the assessment to be levied against
his or her property or business for that fiscal year.
(5) The estimated amount of any surplus or deficit revenues to be carried over from a previous
fiscal year.
(6) The estimated amount of any contributions to be made from sources other than assessments
levied pursuant to this part.
(c) The city council may approve the report as filed by the owners' association or may modify any
particular contained in the report and approve it as modified. Any modification shall be made pursuant to
Sections 36635 and 36636.
The city council shall not approve a change in the basis and method of levying assessments that would
impair an authorized or executed contract to be paid from the revenues derived from the levy of
assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the
district.
Appendix I — Law I Newport Beach Tourism Business Improvement District
21-32
36651. Designation of owners' association to provide improvements, maintenance, and activities
The management district plan may, but is not required to, state that an owners' association will provide the
improvements, maintenance, and activities described in the management district plan. If the management district
plan designates an owners' association, the city shall contract with the designated nonprofit corporation to provide
services.
CHAPTER 5. Renewal
36660. Renewal of district; Transfer or refund of remaining revenues; District term limit
(a) Any district previously established whose term has expired, or will expire, may be renewed by
following the procedures for establishment as provided in this chapter.
(b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived
from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the
renewed district includes additional parcels or businesses not included in the prior district, the remaining
revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district
does not include parcels or businesses included in the prior district, the remaining revenues attributable to
these parcels shall be refunded to the owners of these parcels or businesses.
(c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue
bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries,
assessments, improvements, or activities of a renewed district be the same as the original or prior district.
CHAPTER 6. Disestablishment
36670. Circumstances permitting disestablishment of district; Procedure
(a) Any district established or extended pursuant to the provisions of this part, where there is no
indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be
disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation
of law in connection with the management of the district, it shall notice a hearing on
disestablishment.
(2) During the operation of the district, there shall be a 30 -day period each year in which assessees
may request disestablishment of the district. The first such period shall begin one year after the
date of establishment of the district and shall continue for 30 days. The next such 30 -day period
shall begin two years after the date of the establishment of the district. Each successive year of
operation of the district shall have such a 30 -day period. Upon the written petition of the owners
or authorized representatives of real property or the owners or authorized representatives of
businesses in the district who pay 50 percent or more of the assessments levied, the city council
shall pass a resolution of intention to disestablish the district. The city council shall notice a
hearing on disestablishment.
(b) The city council shall adopt a resolution of intention to disestablish the district prior to the public
hearing required by this section. The resolution shall state the reason for the disestablishment, shall state
the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with
the revenues of the assessments levied within the property and business improvement district. The notice of
the hearing on disestablishment required by this section shall be given by mail to the property owner of
each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city
shall conduct the public hearing not less than 30 days after mailing the notice to the property or business
owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of
intention.
36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district;
Calculation of refund; Use of outstanding revenue collected after disestablishment of district
(a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all
outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired
Appendix 1 — Law I Newport Beach Tourism Business Improvement District
21-33
with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the
property or businesses then located and operating within the district in which assessments were levied by
applying the same method and basis that was used to calculate the assessments levied in the fiscal year in
which the district is disestablished or expires. All outstanding assessment revenue collected after
disestablishment shall be spent on improvements and activities specified in the management district plan.
(b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis
that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to
calculate the amount of any refund.
Newport Beach Tourism Business Improvement District
21-34
APPENDIX 2 - ASSESSED BUSINESSES
Business Name
Street
City & State
Zip
Balboa Bay Resort
1221 West Coast Highway
Newport Beach
CA
92663
Fashion Island Hotel
690 Newport Center Drive
Newport Beach
CA
92660
Hyatt Regency John Wayne
Airport Newport Beach
4545 MacArthur Boulevard
Newport Beach
CA
92660
Hyatt Regency Newport Beach
1107 Jamboree Road
Newport Beach
CA
92660
Lido House
3300 Newport Boulevard
Newport Beach
CA
92663
Newport Beach Marriott
Bayview
500 Bayview Circle
Newport Beach
CA
92660
Newport Beach Marriott Hotel
&S a
900 Newport Center Drive
Newport Beach
CA
92660
Newport Dunes Waterfront
Resort & Marina
1131 Back Bay Drive
Newport Beach
CA
92660
Renaissance Newport Beach
Hotel
4500 MacArthur Boulevard
Newport Beach
CA
92660
Appendix 2 — Assessed Businesses I Newport Beach Tourism Business Improvement
District
21-35
ATTACHMENT C
21-36
NEWPORT BEACH
TOURISM BUSINESS
IMPROVEMENT DISTRICT
to
i
NEWPORT BEACH
TOURISM BUSINESS
IMPROVEMENT DISTRICT
NEWPORT BEACH
TOURISM BUSINESS IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
I. OVERVIEW...............................................................................................................................................1
II. IMPETUS..................................................................................................................................................
3
III. BACKGROUND....................................................................................................................................4
IV. BOUNDARY...........................................................................................................................................5
V. BUDGET AND SERVICES..................................................................................................................6
A. Annual Service Plan ............................................................................................................
6
B. Determination of Specific Benefit.......................................................................................7
C. Assessment..........................................................................................................................8
D. Time and Manner for Collecting Assessments..................................................................48
E. Penalties and Interest...........................................................................................................
9
F. Annual Budget.....................................................................................................................
9
VI. GOVERNANCE..................................................................................................................................
10
A. Owners' Association.........................................................................................................
10
B. Brown Act and California Public Records Act Compliance .............................................
10
C. Annual Report ...................................................................................................................
10
APPENDIX1 —LAW ....................................................................................................................................
11
APPENDIX 2 — ASSESSED BUSINESSES......................................................................................._4423
Prepared by
C IV I IA S
Civitas Advisors Inc.
(800)999-7781
www. civitasadvi sors. com
21-38
I. OVERVIEW
Administered by Visit Newport Beach, Inc. (VNB), the Newport Beach Tourism Business
Improvement District NMTBID) is a business improvement district created to provide specific
benefits to its member businesses, by funding marketing and sales promotion efforts for the assessed
businesses. The NBTBID was foamed by the City of Newport Beach (City) in 2009, pursuant to the
Property and Business Improvement District Law of 1994, Streets and Highways Code Sections 36600
et seq. Upon the request of the NBTBID Owner's Association, the City Council modified the
NBTBID in 2012 to add another lodging business.
{�B}geafrSn anuary 2014, in response tg a request by the Owners' Association, the City Council
renewed the NBTBID for a 10yeartern and increased the assessment from two (2.0%�ercent to
three (3.0%)2ercent of gross short -tern revenue.
Location: The City of Newport Beach. The NBTBID includes ei nine (&2) lodging businesses
located within the boundaries of the City of Newport Beach.
The NBTBID shall include the Balboa Bay Resort, the
Fashion Island Hotel, the Hyatt Regency John Wayne Airport Newport Beach, the
Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, the Newport
Beach MarriottHotel & Spa,
the Newport Dunes Waterfront Resort m '�
Marina, , the Renaissance Newport Beach Hotel. the
Lido House, and any other hotel and resort business that may join the NBTBID in the
future.
Services: The NBTBID is designed to provide specific benefits directly to assessed businesses
by increasing room night sales. The improvements and activities include those
improvements and activities provided in Streets and Highways Code sections 36610
and 36613, and include, but are not limited to, sales marketing and direct sales
programs to increase overnight tourism and market the assessed businesses as tourist,
meeting and event destinations, thereby increasing room night sales. These same
improvements and activities are proposed for each year of the NBTBID's ten (10) year
term.
Budget: The total NBTBID annual budget for the initial year, and subsequent years, is
anticipated to be approximately$2,54_100,000j. This
budget is expected to fluctuate as room sales do, but is not expected to significantly
change over the NBTBID's ten (10) year tern.
NEIrOvemew Newport Beach Tourism Business Improvement District
21-39
Cost The annual assessment rate is three percent (3.0.%) of gross short-term (A e, stays of
thirty (30) calendar days or less) room rental revenue. Because programs will not be
designed to attract certain stays, certain types of stays will not be assessed, as described
in Section V(C).
Duration: The proposed NBTBID will have a ten (10) year term. The NBTBID assessment will
be implemented beginning February 1, 2014, and will be in effect for ten (10) years
through January 31, 2024. After ten (10) years, the petition and City Council hearing
process must be repeated for the NBTBID to be renewed. Also, once per year
beginning on the anniversary of the formation of the NBTBID, there is a thirty (30)
calendar day period in which assessed businesses paying more than fifty percent (50%)
of the assessments may protest and initiate a City Council hearing to terminate the
NBTBID.
Management: VNB will serve as the NBTBID's Owners' Association. The Owners' Association is
charged with managing funds and implementing programs in accordance with this
plan, and must provide annual reports to the City Council.
Renewal: The NBTBID renewal requires submission of petitions from lodging businesses
representing more than fifty percent (50%) of the total annual assessment, followed
by a City Council public meeting and public hearing and an opportunity for written
protest The assessed lodging business owners will receive a notice of the public
meeting and the public hearing by mail. If there is no majority protest, the City Council
may adopt a resolution renewing the NBTBID.
NMIOverview Newport Beach Tourism Business Improvement District
21-40
II. IMPETUS
There are several reasons why the NBTBID should be renewed; the most compelling reasons are as
follows:
The Need to Increase Occupancy
The renewal of the NBTBID is a proactive effort to provide supplemental funding for tourism
promotion beyond that provided by the City. The funding will ensure that adequate financing
exists for the investment required to increase occupancy in the lodging industry and be
competitive in the conference segment of the tourism market The investment will cover an
expanded marketing and promotional budget needed to reach this market segment
2 An Opportunity for Increasing City Taa Revenues
As occupancy rates increase, so too will the City's TOT revenue. With stable public/private
funding for tourism marketing efforts, annual occupancy rates should increase significantly as
new marketing and sales promotion programs are implemented. Greater occupancy will also
produce an increase in sales tax revenues from tourism -related spending. The renewal of the
NBTBID, in partnership with VNB, creates a stable funding source tied directly to tourism
promotion.
Stable Funding for Tounsm promotion
The NBTBID will provide a stable source of funding for consistent tourism promotion
efforts. The NBTBID will provide funding for tourism promotion free of the political and
economic circumstances that can reduce or eliminate government funding for tourism
promotion.
Impetus I Newport Beach Tourism Business Improvement District
21-41
III. BACKGROUND
Tourism Business Improvement Districts (TBIDs) are an evolution of the traditional Business
Improvement District. The first TBID was formed in West Hollywood, California in 1992. Since
then, over 80 California destinations have followed suit. In recent years, other states have begun
adopting the California model— Washington, Montana, and Texas have adopted TBID laws. Several
other states are in the process of adopting their own legislation. And, some cities, like Portland,
Oregon, have utilized their charter
NumexotnNOo .ting Px Year powers to create TBIDs without a
state law.
California's TBIDs collectively raise
over one hundred fifty million
dollars ($150,000,000) annually for
local destination marketing. With
competitors raising their budgets,
and increasing rivalry for visitor
dollars, it is important that the
Newport Beach lodging businesses
continue thea investment in stable,
lodging -specific marketing
programs.
TBIDs utilize the efficiencies of
private -sector operation in the market-based promotion of tourism districts. TBIDs allow lodging
business owners to organize their efforts to increase room night sales. Lodging business owners
within the TBID pay an assessment and those funds are used to provide services that increase room
night sales.
In California, TBIDs are formed pursuant to the Property and Improvement District Law of 1994.
This law allows for the creation of a special benefit assessment district to raise funds within a specific
geographic area. Thekey dherence between TBIDs and other syeczal benefit assessment districts u that ands rained
are allocated to thebrivate. nonLrofit maoratzongoverning the district
There are many benefits to a TBID:
• Funds must be spent on services and improvements that provide a specific and special benefit
only to those who pay;
• Funds cannot be diverted to general government programs;
• They are customized to fit the needs of the assessed businesses in each destination,
• They allow for a wide range of services;
• They are designed, created and govemed by those who will pay the assessment; and
• They provide a stable funding source for tourism promotion.
MoffBackground Newport Beach Tourism Business Improvement District
21-42
IV. BOUNDARY
The NBTBID will include e�n=e (S2) lodging businesses, available for public occupancy within
the boundaries of the City of Newport Beach, and other hotels and resorts that may join NBTBID in
the future.
The boundary, as shown in the map below, currently includes eigkE-Lme (&L) lodging businesses. A
complete listing of lodging businesses within the NBTBID can be found in Appendix 2.
•TZ
-7`4
mann Wnw Jmn wayre
a.pen NexpM Nezcn
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Nnrpptl e°.pM1
City Llmlb
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9eacn Xael.
1
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NaRa'n 4acM1 Naawtl 6a
•
Newport Beach TBID
a
55
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O
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6
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Xe�pwlLuws NahaBml
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CIVITAS
Boundary I Newport Beach Tourism Business Improvement District
21-43
473P' soewRadisn Nport Beach
FannonNewport Beach
CityLimitsO
Newpert Beech Marroh Bayview
UPPER
NEWPORT
BAY
6b
Z
D
n
QO s�
R, SG
O
PJo Isbnd Hoo Newport Beech s
Bat Bay Club and Reach Hyatt Ragaay, Newport Beach o
• • • • Newport Beach Merrba Fbtel b Spa
NpK, Newport Dunes WateNtont Resort & Marina
WONT
B4V
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CCFAA/ O N
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Boundary I Newport Beach Tourism Business Improvement District
21-44
V. BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred, or privileges granted directly
to, the assessed businesses that are not provided to those not charged, and which do not exceed the
reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and
services provided with the NBTBID funds are sales, marketing, advertising, and promotional
programs available only to assessed businesses.
A service plan budget has been developed to deliver services that benefit businesses throughout the
NBTBID. A detailed annual budget will be developed by the Owners' Association and approved by
the City Council. The table below illustrates the initial annual budget allocations.
Sales Administration 6.25% $'v , 256 250
Contingency 1.50% $37061500
City Collection
0.25% $6—, nn -1025
0
Total Annual Budget 100% $300;000,004,100.000
Actual annual revenues will fluctuate due to market conditions, but are not expected to change
significantly over the tern of the district. The budget above is for the initial year; the same activities
are proposed for subsequent years. VNB shall adopt specific budgets after the initial year. A
description of the proposed improvements and activities for the initial year of operation is below.
Sales Marketing—Direct Sales
A sales marketing program will promote assessed businesses as tourist, meeting, and event
destinations. The programs will be focused on attracting group sales to assessed businesses. Only
assessed businesses will receive benefits featured in, and obtain leads from, the sales and marketing
activities. The sales and marketing program will have a central theme of promoting the assessed
Newport Beach lodging businesses as desirable places for group events. The program will have the
goal of increasing overnight visitation and room night sales at assessed businesses, and may include
the following activities:
• Internet marketing efforts to increase awareness and optimize Internet presence for assessed
businesses;
• Print ads in magazines and trade publications featuring assessed businesses and targeted at
potential group meeting planners;
• Sales missions and sales calls to attract groups to assessed businesses;
• Costs related to providing sales marketing and direct sales programs;
• Client events designed to book new and returning groups at assessed businesses;
• Familiarization tours of assessed businesses;
• Preparation and production of collateral promotional materials such as brochures, flyers and
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maps featuring assessed businesses;
• Attendance of professional industry conferences and affiliation events on behalf of assessed
businesses; and
• Lead generation activities designed to attract group events to assessed businesses.
The sales solicitation portion of the budget will be utilized to support direct sales efforts, including
personnel and sales support teams that conduct outreach to clients, provide site inspections and work
with assessed hotels to dose select group business.
Sales —Administration
The sales administration portion of the budget will be utilized for administrative costs related to
providing the sales programs. This may include office costs, and other general administrative costs,
such as insurance, legal, and accounting fees. Legal fees may include defense of the NBTBID.
City Administration Fee
The City of Newport Beach shall be paid a fee equal to one quarter of one percent (0.25%) of the
amount of assessment collected to cover its costs of collection and administration.
Contingency
A prudent portion of the budget will be held in a contingency reserve. These funds may be used to
cover unanticipated program or administrative costs. If, at expiration of the NBTBID, there are
contingency funds remaining and hotels wish to renew the district, the contingency funds could be
used for the renewal effort.
B. Determination of Specific Benefit
State law requires that assessment funds be expended on a specific benefit conferred directly to the
assessed businesses that is not provided to those not charged, and which does not exceed the
reasonable cost to the City conferring the benefit The services in this Management District Plan are
designed to provide targeted benefits directly to assessed businesses. These services are tailored not
to serve the general public, but rather to serve the specific assessed businesses within the NBTBID
(e.g., the proposed activities are specifically targeted to increase room night sales for assessed
businesses within the boundaries of the NBTBID, and are narrowly tailored). NBTBID funds will be
used exclusively to provide the specific benefit of increased room night sales directly to the businesses.
Non -assessed businesses will not be featured in NBTBID programs and will not receive sales leads
from them. The activities paid for from assessment revenues are business services constituting and
providing specific benefits to the assessed businesses. To the extent any non-paying business benefits
from TBID programs, that portion of the program will be paid for with non -assessment funds.
Further, the assessment may be utilized to provide specific government services directly to the
assessed businesses that are not provided to those not charged, and which do not exceed the
reasonable costs to the City providing the services. Marketing like that to be provided by the NBTBID
has been and is provided by the City, through its contract with VNB. The amount of the assessment
is no more than necessary to cover the reasonable costs of the proposed activities, and the manner in
which the costs are allocated to a business owner bear a fair share and bears a reasonable relationship
to the assessed businesses' benefits received from the proposed activities.
NBTBID services will be implemented carefully to ensure they do not exceed the reasonable cost of
such services. Funds will be managed by the Owners' Association, and reports submitted on an annual
basis to the City. Only assessed businesses will be featured in marketing materials, receive sales leads
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generated from NBTBID-funded activities, be featured in advertising campaigns, and benefit from
other NBTBID-funded services. Non -assessed businesses will not receive these, nor any other,
NBTBID-funded services and benefits.
C. Assessment
The annual assessment rate is three (3) percent of gross short -tern (stays of th ity (30) calendar days
or less) room rental revenue. Based on the benefit received, assessments will not be collected on stays
of more than thirty (30) consecutive calendar days. Based on the benefit received and because these
types of stays will not be sought after by the NBTBID programs, the following stays are not subject
to TOT under the Newport Beach Municipal Code (Section 3.16.040) and are not subject to
assessment:
• Stays by any officer or employee of a foreign government who is exempt from
payment of transient occupancy taxes by reason of express provision of Federal law
or international treaty;
• Stays by a transient occupying a hotel pursuant to a qualifying rental agreement entered
into prior to the first day of occupancy;
• Stays by an employee of an airline company who is occupying a hotel room in the
course of his or her employment, but only when the room is rented by the airline
employer pursuant to a qualifying rental agreement that has been preapproved by the
City's Finance Director;
• Staysby any personor transient occupying a hotel room provided without rent charged
(complimentary) to the person or transient by the operator, including but not limited
to:
1. Rooms provided to charitable organizations;
2. Rooms provided to meeting planners who may book future hotel
rooms and provide business and conferencing opportunities for the
economic benefit of the hotel,
3. Rooms provided to displeased guests; and/or
4. Rooms provided to hotel employees.
The term "rent' shall mean the consideration charged, whether or not received, for the occupancy of
space in a hotel valued in money, whether to be received in money, goods, labor or otherwise,
including all receipts, cash, credits, and property and services of any kind or nature, without any
deduction. Rent shall include the consideration charged by a business for accommodations, including
any (A) un -refunded advance rental deposits or (B) separate charges levied for items or services which
are part of such accommodations including, but not limited to, furniture, fixtures, appliances, linens,
towels, non -coin-operated safes, utilities (such as energy surcharges) and maid service. Rent shall not
include any federal, state or local taxes collected, including but not limited to transient occupancy
taxes.
The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately
stated from the amount of rent charged and any other applicable taxes, and each transient shall receive
a receipt for payment from the business. The assessment shall not be considered revenue for any
purposes, including calculation of transient occupancy taxes.
Bonds may not be issued.
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D. Time and Manner for Collecting Assessments
The NBTBID assessment will be implemented beginning February 1, 2014 and will continue for 10
years through January 31, 2024. The City, or its designee, is responsible for collecting the assessment
on a monthly basis (including any delinquencies, penalties and interest) from each assessed business
located in the boundaries of the NBTBID. The City, or its designee, shall take all reasonable efforts
to collect the assessments from each assessed business. The City shall forward the assessments
collected to the Owners' Association.
E. Penalties and Interest
1. Any assessed business which fails to remit any assessment within the time required shall pay a
penalty of ten (10) percent of the amount of the assessment in addition to the amount of the assessment
(initial penalty).
2. Any business that fails to remit the assessment and initial penalty on or before a period of thirty
(30) calendar days following the date on which the assessment first became delinquent shall pay a second
delinquency penalty of ten (10) percent on both the amount of the assessment and the initial penalty
(second penalty).
3. In addition to the penalties imposed, any assessed business that fails to remit any assessment shall
pay interest on the amount of assessment that is due and owing at the rate of one and one-half of one
percent (1-'/ %) per month for each month or portion of a month that the assessment remains unpaid
exclusive of penalties. For purposes of collection, every penalty imposed and such interest as accrues shall
become a part of the assessment required to be paid.
4. In addition to the penalties and interest provided in this section, the assessed business shall
reimburse the City or Owners' Association for costs in performance of an audit if, as a result of the audit,
it is determined there was any intentional misrepresentation by the assessed business with respect to the
amount of assessment due or there is a five percent (5%) or greater discrepancy between the amount of
annual assessment due and the amount paid by the business. Such reimbursement shall be paid by
business within thirty (30) calendar days of the assessed business being notified in writing of the amount
of audit costs.
F. Annual Budget
The total ten (10) year improvement and service plan budget is projected at approximately tee sn4
11_ _ m 9) 4100 000 annually, or
{',9BB;BBB)$41.000.000 through the ten (10) year tern. This amount may fluctuate as sales and
revenue increase at assessed businesses.
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VI. GOVERNANCE
A. Owners' Association
The City Council, through adoption of this Management District Plan, has the right, pursuant to
Streets and Highways Code section 36651, to identify the body that shall implement the proposed
program, which shall be the Owners' Association of the NBTBID as defined in Streets and Highways
Code section 36614.5. The City Council has determined that Visit Newport Beach, Inc. will serve as
the Owners' Association for the NBTBID.
B. Brown Act and California Public Records Act Compliance
An Owners' Association is a private entity and may not be considered a public entity for any purpose,
nor may its board members or staff be considered to be public officials for any purpose. The Owner's
Association is, however, subject to government regulations relating to transparency, namely the Ralph
M. Brown Act and the California Public Records Act These regulations are designed to promote
public accountability. The Owners' Association is considered a legislative body under the Ralph M.
Brown Act (Government Code sections 54950 etseq.). Thus, meetings of the VNB board and certain
committees, to the extent they discuss the TBID, must be held in compliance with the public notice
and other requiements of the Brown Act. The Owners' Association is also subject to the record
keeping and disclosure requirements of the California Public Records Act
C. Annual Report
VNB shall present an annual report at the end of each year of operation to the City Council pursuant
to Streets and Highways Code section 36650 (see Appendix 1).
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APPENDIX 1 - LAW
'"THIS DOCUMENT IS CURRENT THROUGH THE 2018 SUPPLEMENT ***
(ALL 2017 LEGISLATION)
STREETS AND HIGHWAYS CODE
DIVISION 18. PARKING
PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994
CHAPTER 1. General Provisions
ARTICLE 1. Declarations
36600. Citation of part
This part shall be known and may be cited as the `Property and Business Improvement District Law of 1994."
36601. Legislative findings and declarations; Legislative guidance
The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state's communities are
economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate
facilities, services, and activities in the business districts.
(b) It is in the public interest to promote the economic revitalization and physical maintenance of business
districts in order to createjobs, attract new businesses, and prevent the erosion of the business districts.
(c) It is ofparticular local benefit to allow business districts to fund business related improvements,
maintenance, and activities through the levy of assessments upon the businesses or real property that
receive benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific
benefit upon the businesses in a business district are not taxes for the general benefit of a city, even if
property, businesses, or persons not assessed receive incidental or collateral effects that benefit them.
(e) Property and business improvement districts formed throughout this state have conferred special
benefits upon properties and businesses within their districts and have made those properties and businesses
more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12 -percent reduction in the
incidence of robbery and an 8 -percent reduction in the total incidence of violent crimes within the
30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business
improvement districts have become even more important tools with which communities can combat blight,
promote economic opportunities, and create a clean and safe environment
(p,) Since the enactment of this act, the people of California have adopted Proposition 218, which added
Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation
of, and activities, expenditures, and assessments by property -based districts. Article XIII D of the
Constitution provides that property -based districts may only levy assessments for special benefits.
(h) The act amending this section is intended to provide the Legislature's guidance with regard to this act,
its interaction with the provisions of Article XIII D of the Constitution, and the determination of special
benefits in property -based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this
act, which discourages the use of assessments to fund needed improvements, maintenance, and
activities in property -based districts, contributing to blight and other undermilization of property.
(2) Activities undertaken for the purpose of conferring special benefits upon property to be
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assessed. Therefore, for special benefits to exist as a separate and distinct category from general
benefits, the incidental or collateral effects of those special benefits are inherently part of those
special benefits. The mere fact that special benefits produce incidental or collateral effects that
benefit property or persons not assessed does not convert any portion of those special benefits or
their incidental or collateral effects into general benefits.
(3) It is of the utmost importance that property -based districts created under this act have clarity
regarding restrictions on assessments they may levy and the proper determination of special
benefits. Legislative clarity with regard to this act will provide districts with clear instructions and
courts with legislative intent regarding restrictions on property -based assessments, and the manner
in which special benefits should be determined.
36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy
assessments within property and business improvement districts, to ensure that those assessments conform to all
constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act
This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of
improvements or activities or the raising of revenue for these purposes.
36603. Preemption of authority or charter city to adopt ordinances levying assessments
Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a
different method of levying assessments for similar or additional purposes from those set forth in this part A
property and business improvement district created pursuant to this part is expressly exempt from the provisions of
the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with
Section 2800)).
36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law,
as to districts created under this part
36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall
remain in full force and effect Assessments levied under this part are not special taxes.
ARTICLE 2. Definitions
36606. "Activities"
"Activities" means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing ofmusic in any public place
(c) Promotion of tourism within the district
(d) Marketing and economic development, including retail retention and recruitment
(e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal
services supplemental to those normally provided by the municipality.
(f) Other services provided for the purpose of conferring special benefit upon assessed real property or
specific benefits upon assessed businesses located in the district
36606.5. "Assessment"
"Assessment"means a levy for thepurpose of acquiring, constructing installing or maintaining improvements and
providing activities thatwill provide certain benefits to properties or businesses located within a property and
business improvement district
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36607. `Business"
"Business" means all types of businesses and includes financial institutions and professions.
36608. "City"
"City" means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with
Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which
includes only cities, counties, or a city and county, or the State of California.
36609. "City council"
"City council" means the city council of a city or the board of supervisors of a county, or the agency, commission,
or board created pursuant to a joint powers agreement and which is a city within the meaning of this part
36609.4. "Clerk"
"Clerk" means the clerk of the legislative body.
36609.5. "General benefit"
"General benefit"means, for purposes of a property -based district, any benefit that is not a "special benefit" as
defined in Section 36615.5.
36610. "Improvement"
"Improvement" means the acquisition, construction, installation, or maintenance of any tangible property with an
estimated useful life of five years or more including but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs.
(c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(p,) Fountains.
(h) Planting areas.
(i) Closing opening, widening, or narrowing of existing streets.
Q) Facilities or equipment, or both, to enhance security of persons and property within the district
(k) Ramps, sidewalks, plazas, and pedestrian malls.
(1) Rehabilitation or removal of existing structures.
36611. "Management district plan"; `Plan"
"Management district plan" or "plan" means a proposal as defined in Section 36622.
36612. "Owners' association"
"Owners' association" means a private nonprofit entity that is under contract with a city to administer or implement
improvements, maintenance, and activities specified in the management district plan. An owners' association may
be an existing nonprofit entity or a newly formed nonprofit entity. An owners' association is a private entity and
may not be considered a public entity for any purpose, nor may its board members or staff be considered to be
public officials for any purpose Notwithstanding this section, an owners' association shall comply with the Ralph
M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government
Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and
with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the
Government Code), for all records relating to activities of the district
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36614. "Property"
"Property" means real property situated within a district
36614.5. "Property and business improvement district"; "District"
"Property and business improvement district," or "district," means a property and business improvement district
established pursuant to this part
36614.6. "Property -based assessment"
"Property -based assessment"means any assessment made pursuant to this partupon real property.
36614.7. "Property -based district"
"Property -based district"means any district in which a city levies a property -based assessment
36615. "Property owner"; `Business owner"; "Owner"
"Property owner" means any person shown as the owner of land on the last equalized assessmentroll or otherwise
known to be the owner of land by the city council. `Business owner' means any person recognized by the city as the
owner ofthebusiness. "Owner' means either a business owner or a property owner. The city council has no
obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership
shall be final and conclusive for the purposes of this part Wherever this part requires the signature of the property
owner, the signature of the authorized agent of the property owner shall be sufficient Wherever this part requires the
signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient
36615.5. "Special benefit"
"Special benefit' means, for purposes of a property -based district, a particular and distinct benefit over and above
general benefits conferred on real property located in a district or to thepublic at large. Special benefit includes
incidental or collateral effects that arise from the improvements, maintenance, or activities of property -based
districts even ifthose incidental or collateral effects benefit property or persons not assessed. Special benefit
excludes general enhancement of property value
36616. "Tenant"
"Tenant"means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner
ARTICLE 3. Prior Law
36617. Alternate method of financing certain improvements and activities; Effect on other provisions
This part provides an alternative method of financing certain improvements and activities. The provisions of this
part shall not affect or limit any other provisions of law authorizing or providing for the famishing of improvements
or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the
Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is
valid and effective and is unaffected by this part
CHAPTER 2. Establishment
36620. Establishment of property and business improvement district
A property and business improvement district may be established as provided in this chapter.
36620.5. Requirement of consent of city council
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A county may not form a district within the territorialjurisdictim of a city without the consent of the city council of
that city. A city may not form a district within the unincorporated territory of a county without the consent of the
board of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city
without the consent of the city council of the other city.
36621. Initiation of proceedings; Petition of property or business owners in proposed district
(a) Upon the submission of a written petition, signed by the property or business owners in the proposed
district who will pay more than 50 percent of the assessments proposed to be levied, the city council may
initiate proceedings to form a district by the adoption of resolution expressing its intention to form a
district The amount of assessment attributable to property or a business owned by the same property or
business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall
not be included in determining whether the petition is signed by property or business owners who will pay
more than 50 percent of the total amount of assessments proposed to be levied.
(b) The petition of property or business owners required under subdivision (a) shall include a summary of
the management district plan. That summary shall include all of the following:
(1) A map showing the boundaries of the district
(2) Information specifying where the complete management district plan can be obtained.
(3) Information specifying that the complete management district plan shall be famished upon
request
(c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of
the proposed assessment, a statement as to whether the assessment will be levied on property or
businesses within the district, a statement as to whether bonds will be issued, and a description of
the exterior boundaries of the proposed district, which may be made by reference to any plan or
map that is on file with the clerk. The descriptions and statements do not need to be detailed and
shall be sufficient if they enable an owner to generally identify the nature and extent of the
improvements, maintenance, and activities, and the location and extent of the proposed district
(2) A time and place for a public hearing m the establishment of the property and business
improvement district and the levy of assessments, which shall be consistent with the requirements
of Section 36623.
36622. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied m property, a map of the district in sufficient detail to locate each
parcel of property and, if businesses are to be assessed, each business within the district If the assessment
will be levied m businesses, a map that identifies the district boundaries in sufficient detail to allow a
business owner to reasonably determine whether a business is located within the district boundaries. If the
assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each
parcel of property and to allow a business owner to reasonably deter mine whether a business is located
within the district boundaries.
(b) The name of the proposed district
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for
establishment or extension in a manner sufficient to identify the affected property and businesses included,
which may be made by reference to any plan or map that is m file with the clerk. The boundaries of a
proposed property assessment district shall not overlap with the boundaries of another existing property
assessment district created pursuant to this part This part does not prohibit the boundaries of a district
created pursuant to this partto overlap with other assessment districts established pursuant to other
provisions of law, including but not limited to, the Parking and Business Improvement Area Law of 1989
(Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business
assessment district created pursuant to this partto overlap with another business assessment district created
pursuant to this part This part does not prohibit the boundaries of a business assessment district created
pursuant to this part to overlap with a property assessment district created pursuant to this part
(d) The improvements, maintenance, and activities proposed for each year of operation of the district and
the maximum cost thereof If the improvements, maintenance, and activities proposed for each year of
operation are the same, a description of the first year's proposed improvements, maintenance, and activities
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and a statement that the same improvements, maintenance, and activities are proposed for subsequent years
shall satisfy the requirements of this subdivision.
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and
debt service in each year of operation of the district If the assessment is levied m businesses, this amount
may be estimated based upon the assessment rate. Ifthe total annual amount proposed to be expended in
eachyear of operation of the district is not significantly different, the amount proposed to be expended in
the initial year and a statement that a similar amount applies to subsequentyears shall satisfy the
requirements of this subdivision.
(f) The proposed source or sources of financing, including the proposed method and basis of levying the
assessment in sufficient detail to allow each property or business owner to calculate the amount of the
assessment to be levied against his or her property or business. The plan also shall state whether bonds will
be issued to finance improvements.
(g) The time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum
number of years shall be five Upon renewal, a district shall have a tern not to exceed 10 years.
Notwithstanding these limitations, a district created pursuant to this partto finance capital improvements
with bonds may levy assessments until the maximum maturity of the bonds. The management district plan
may set forth specific increases in assessments for each year of operation of the district
(i) The proposed time for implementation and completion of the management district plan.
Q) Any proposed rules and regulations to be applicable to the district
(k) (1) A list of the properties or businesses to be assessed, including the assessor's parcel numbers
for properties to be assessed, and a statement of the method or methods by which the expenses of a
district will be imposed upon benefited real property or businesses, in proportion to the benefit
received by the property or business, to defray the cost thereof.
(2) In a property -based district, the proportionate special benefit derived by each identified parcel
shall be determined exclusively in relationship to the entirety of the capital cost of a public
improvement, the maintenance and operation expenses of public improvement, or the cost of the
activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of
the proportional special benefit conferred on that parcel. Only special benefits are assessable, and
a property -based district shall separate the general benefits, if any, from the special benefits
conferred on a parcel. parcels within a property -based district that are owned or used by any city,
public agency, the State of California, or the United States shall not be exempt from assessment
unless the governmental entity can demonstrate by clear and convincing evidence that those
publicly owned parcels in fact receive no special benefit The value of any incidental, secondary,
or collateral effects that arise from the improvements, maintenance, or activities of a property -
based district and that benefit property or persons not assessed shall not be deducted from the
entirety of the cost of any special benefit or affect the proportionate special benefit derived by
each identified parcel.
(1) In a property -based district, the total amount of all special benefits to be conferred upon the properties
located within the property -based district
(m) In a property -based district, the total amount of general benefits, if any.
on In a property -based district, a detailed engineer's report prepared by a registered professional engineer
certified by the State of California supporting all assessments contemplated by the management district
plan.
(o) Any other item or matter required to be incorporated therein by the city council.
36623. Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and
hearing procedure shall comply with Section 53753 of the Government Code
(b) If a city council proposes to levy a new or increased business assessment, the notice and protest and
hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be
mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing
by any interested person Every written protest shall be filed with the clerk at or before the time fixed for
the public hearing. The city council may waive any irregularity in the form or content of any written
protest A written protest may be withdrawn in writing at any time before the conclusion of the public
hearing. Each written protest shall contain a description of the business in which the person subscribing the
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protest is interested sufficient to identify the business and, if a person subscribing is not shown on the
official records of the city as the owner of the business, the protest shall contain orb e accompanied by
written evidence that the person subscribing is the owner of the business or the authorized representative A
written protest that does not comply with this section shall not be counted in determining a majority protest
If written protests are received from the owners or authorized representatives of businesses in the proposed
district that will pay 50 percent or more of the assessments proposed to be levied and protests are not
withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed
assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of
one year from the date of the finding of a majority protest by the city council.
(c) If a city council proposes to conduct a single proceeding to levy both a new or increased property
assessment and a new or increased business assessment, the notice and protest and hearing procedure for
the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure
for the business assessment shall comply with subdivision (b). If a majority protest is received from either
the property or business owners, that respective portion of the assessment shall not be levied. The
remaining portion of the assessment may be levied unless the improvement or other special benefit was
proposed to be funded by assessing both property and business owners.
36624. Changes to proposed assessments
At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or
modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with
the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the
public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and
business improvement district that will exclude territory that will not benefit from the proposed improvements,
maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district
shall be reflected in the notice and map recorded pursuant to Section 36627.
36625. Resolution of formation
(a) If the city council, following the public hearing decides to establish a proposed property and business
improvement district, the city council shall adopt a resolution of formation that shall include, but is not
limited to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of
the proposed assessment, a statement as to whether the assessment will be levied on property,
businesses, or both within the district, a statement on whether bonds will be issued, and a
description of the exterior boundaries of the proposed district, which may be made by reference to
any plan or map that is on file with the clerk. The descriptions and statements need not be detailed
and shall be sufficient if they enable an owner to generally identify the nature and extent of the
improvements, maintenance, and activities and the location and extent of the proposed district
(2) The number, date of adoption, and title of the resolution of intention.
(3) The time and place where the public hearing was held concerning the establishment of the
district
(4) A determination regarding any protests received. The city shall not establish the district or levy
assessments if majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district
established by the resolution shall be subject to any amendments to this part
(6) A statement that the improvements, maintenance, and activities to be conferred on businesses
and properties in the district will be funded by the levy of the assessments. The revenue from the
levy of assessments within a district shall not be used to provide improvements, maintenance, or
activities outside the district or for any purpose other than the purposes specified in the resolution
of intention, as modified by the city council at the hearing concerning establishment of the district
Notwithstanding the foregoing improvements and activities that must be provided outside the
district boundaries to create a special or specific benefit to the assessed parcels or businesses may
be provided, but shall be limited to marketing or signage pointing to the district
(7) A finding that the property or businesses within the area of the property and business
improvement district will be benefited by the improvements, maintenance, and activities funded
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by the proposed assessments, and, for a property -based district, that property within the district
will receive a special benefit.
(8) In a property -based district, the total amount of all special benefits to be conferred on the
properties within the property -based district
(b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant
to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the
management district plan.
36626. Resolution establishing district
If the city council, following the public hearing, desires to establish the proposed property and business
improvement district, and the city council has not made changes pursuant to Section 36624, or has made changes
that do not substantially change the proposed assessment, the city council shall adopt a resolution establishing the
district The resolution shall contain all of the information specified in Section 36625.
36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625 or
Section 36626, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other
provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this
part.
36628. Establishment of separate benefit zones within district; Categories of businesses
The city council may establish one or more separate benefit zones within the district based upon the degree of
benefit derived from the improvements or activities to be provided within the benefit zone and may impose a
different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may
also define categories of businesses based upon the degree of benefit that each will derive from the improvements or
activities to be provided within the district and may impose a different assessment or rate of assessment on each
category of business, or on each category of business within each zone.
36628.5. Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant
to this part The city council shall structure the assessments in whatever manner it determines corresponds with the
distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property -
based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622.
36629. Provisions and procedures applicable to benefit zones and business categories
All provisions of this part applicable to the establishment, modification, or disestablishment of a property and
business improvement district apply to the establishment, modification, or disestablishment of benefit zones or
categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of
business, follow the procedure to establish, modify, or disestablish a property and business improvement district
36630. Expiration of district Creation of new district
If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of
Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part
CHAPTER 3. Assessments
36631. Time and manner of collection of assessments; Delinquent payments
The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by
the city council in the resolution levying the assessment Assessments levied on real property may be collected at the
same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and
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penalties for delinquem payment All delinquentpayments for assessments levied pursuant to this part maybe
charged interest and penalties.
36632. Assessments to be based on estimated benefit; Classificaton of real property and businesses;
Exclusion of residential and agricultural property
(a) The assessments levied m real property pursuant to this part shall be levied m the basis of the estimated
benefit to the real property within the property and business improvement district The city council may
classify properties for purposes of determining the benefit to property of the improvements and activities
provided pursuant to this part
(b) Assessments levied on businesses pursuant to this part shall be levied m the basis of the estimated
benefit to the businesses within the property and business improvement district The city council may
classify businesses for purposes of determining the benefit to the businesses of the improvements and
activities provided pursuant to this part
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively
presumed not to benefit from the improvements and service funded through these assessments, and shall
not be subject to any assessment pursuant to this part
36633. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in any action or proceeding unless the
action or proceeding is commenced within 30 days atter the resolution levying the assessment is adopted pursuant to
Section 36626. Any appeal from a final judgment in an action or proceeding shall be perfected within 30 days after
the entry of judgment.
36634. Service contracts authorized to establish levels of city services
The city council may execute baseline service contracts that would establish levels of city services that would
continue atter a property and business improvement district has been formed.
36635. Request to modify management district plan
The owners' association may, at any time, request that the city council modify the management district plan. Any
modification of the management district plan shall be made pursuant to this chapter.
36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention
(a) Upon the written request of the owners' association, the city council may modify the management
district plan atter conducting me public hearing m the proposed modifications. The city council may
modify the improvements and activities to be funded with the revenue derived from the levy of the
assessments by adopting a resolution determining to make the modifications atter holding a public hearing
on the proposed modifications. If the modification includes the levy of a new or increased assessment, the
city council shall comply with Section 36623. Notice of all other public hearings pursuant to this section
shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper ofgeneral circulation in the city
once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10
days before the public hearing to each business owner or property owner affected by the proposed
modification.
(b) The city council shall adopt a resolution of intention which states the proposed modification prior to the
public hearing required by this section. The public hearing shall be held not more than 90 days after the
adoption of the resolution of intention.
36637. Reflection of modification in notices recorded and maps
Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant
to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.
OEMAppendix I — Law I Newport Beach Tourism Business Improvement District
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CHAPTER 3.5. Financing
36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments
(a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the
estimated cost of some or all of the proposed improvements described in the resolution of formation
adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides
for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with
Section 8500)) or in conjunction with Marks -Roos Local Bond Pooling Act of 1985 (Article 4
(commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Govemment Code). Either
act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although
proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate
assessments levied upon business pursuant to this part.
(b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements
specified in the resolution offormation adopted pursuant to Section 36625, set forth the estimated cost of
those improvements, specify the number of annual installments and the fiscal years during which they are
to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue
estimated to be raised from assessments over 30 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on
any bond issued pursuant to this section shall not be reduced or tenninated if doing so would interfere with
the timely retirement of the debt
CHAPTER 4. Governance
36650. Report by owners' association; Approval or modification by city council
(a) The owners' association shall cause to be prepared a reportfor each fiscal year, except the first year, for
which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and
activities described in the report The owners' association's first report shall be due after the first year of
operation of the district The report may propose changes, including but not limited to, the boundaries of
the property and business improvement district or any benefit zones within the district, the basis and
method of levying the assessments, and any changes in the classification of property, including any
categories of business, if classification is used.
(b) The report shall be filed with the clerk and shall refer to the property and business improvement district
by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall
contain all of the following infonmation
(1) Any proposed changes in the boundaries of the property and business improvement district or
in any benefit zones or classification of property or businesses within the district
(2) The improvements, maintenance, and activities to be provided for that fiscal year.
(3) An estimate of the cost of providing the improvements, maintenance, and activities for that
fiscal year.
(4) The method and basis of levying the assessment in sufficient detail to allow each real property
or business owner, as appropriate, to estimate the amount of the assessment to be levied against
his or her property or business for that fiscal year.
(5) The estimated amount of any surplus or deficit revenues to be canied over from a previous
fiscal year.
(6) The estimated amount of any contributions to be made from sources other than assessments
levied pursuant to this part
(c) The city council may approve the report as filed by the owners' association or may modify any
particular contained in the report and approve it as modified. Any modification shall be made pursuant to
Sections 36635 and 36636.
The city council shall not approve a change in the basis and method of levying assessments that would
impair an authorized or executed contract to be paid from the revenues derived from the levy of
assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the
district
Appendix 1 —Law I Newport Beach Tourism Business Improvement District
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36651. Designation of owners' assort ad onto provide improvements, maintenance, and activities
The management district plan may, but is not required to, state that an owners' association will provide the
improvements, maintenance, and activities described in the management district plan. If the management district
plan designates an owners' association, the city shall contract with the designated nonprofit corporation to provide
services.
CHAPTER 5. Renewal
36660. Renewal of district; Transfer or refund of remaining revenues; District term limit
(a) Any district previously established whose teen has expired, or will expire, may be renewed by
following the procedures for establishment as provided in this chapter.
do Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived
from the sale of assets acquired with the revenues, shall be transferred to the renewed district If the
renewed district includes additional parcels or businesses not included in the prior district, the remaining
revenues shall be spent to benefit only the parcels or businesses in the prior district If the renewed district
does not include parcels or businesses included in the prior district, the remaining revenues attributable to
these parcels shall be refunded to the owners of these parcels or businesses.
(c) Upon renewal, a district shall have a teen not to exceed 10 years, or, if the district is authorized to issue
bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries,
assessments, improvements, or activities of a renewed district be the same as the original or prior district
CHAPTER 6. Disestablishment
36670. Circumstances permitting disestablishment of district; Procedure
(a) Any district established or extended pursuant to the provisions of this part, where there is no
indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be
disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation
of law in connection with the management of the district, it shall notice a hearing on
disestablishment
(2) During the operation of the district, there shall be a 30 -day period each year in which assessees
may request disestablishment of the district The first such period shall begin one year atter the
date of establishment of the district and shall continue for 30 days. The next such 30 -day period
shall begin two years atter the date of the establishment of the district Each successive year of
operation of the district shall have such a 30 -day period. Upon the written petition of the owners
or authorized representatives ofreal property or the owners or authorized representatives of
businesses in the district who pay 50 percent or more of the assessments levied, the city council
shall pass a resolution of intention to disestablish the district The city council shall notice a
hearing on disestablishment
do The city council shall adopt a resolution of intention to disestablish the district prior to the public
hearing required by this section. The resolution shall state the reason for the disestablishment, shall state
the fime and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with
the revenues of the assessments levied within the property and business improvement district The notice of
the hearing on disestablishment required by this section shall be given by mail to the property owner of
each parcel or to the owner of each business subject to assessment in the district, as appropriate The city
shall conduct the public hearing not less than 30 days atter mailing the notice to the property or business
owners. The public hearing shall beheld not more than 60 days atter the adoption of the resolution of
intention.
36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district;
Calculation of refund; Use of outstanding revenue collected ager disestablishment of district
(a) Upon the disestablishment or expiration without renewal of district, any remaining revenues, after all
outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired
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with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the
property or businesses then located and operating within the district in which assessments were levied by
applying the same method and basis that was used to calculate the assessments levied in the fiscal year in
which the district is disestablished or expires. All outstanding assessment revenue collected atter
disestablishment shall be spent on improvements and activities specified in the management district plan.
(b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis
that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to
calculate the amount of any refund.
Newport Beach Tourism Business Improvement District
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APPENDIX 2 - ASSESSED BUSINESSES
Appendix 2 —Assessed Businesses I Newport Beach Tourism Business Improvement
District
21-62
BalboaBa, Resort 1221 West Coast Hiph�av
Fashion Island Hotel 690 Newport Center Dave
�EE; ael3Hvatt Regency John Wa;me Airport Newo�rt 1§99 4545 MacArthur Boulevard
Beach
Hyatt Regency Newport Beach 1107 Jamboree Road
Lido House 3300 Newport Boulevard
Newport Beach Mamott Bayview 500 Bayview Circle
Newport Beach Mamott Hotel & Spa 900 Newport Center Dave
Newport Dunes Waterfront Resort &Manna 1131Ba Formatted Table
29'____ ^'_—.-r-fin--_Renaissance Newport Beach Hotel -0§4a4500 MacArthur Boulevard
Formatted Table
Appendix 2 —Assessed Businesses I Newport Beach Tourism Business Improvement
District
21-62