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HomeMy WebLinkAbout04 - Resolution of Intention to Disestablish the NBTIB and Fixing the Time and Place of a Public HearingQ �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report February 13, 2024 Agenda Item No. 4 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Tara Finnigan, Assistant City Manager - 949-644-3001, tinnigan@newportbeachca.gov PREPARED BY: Melanie Franceschini, Management Analyst — 949-644-3028, mfranceschini@newportbeachca.gov TITLE: Resolution No. 2024-8: Resolution of Intention to Disestablish the Newport Beach Tourism Business Improvement District and Fixing the Time and Place of a Public Hearing ABSTRACT: The Newport Beach Tourism Business Improvement District (NBTBID) Board of Directors (Board) met on January 25, 2024, and unanimously approved a resolution requesting that the City of Newport Beach disestablish the district. RECOMMENDATIONS: 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; b) Adopt Resolution No. 2024-8: A Resolution of the City Council of the City of Newport Beach, California, Declaring its Intention to Disestablish the Newport Beach Tourism Business Improvement District and Fixing the Time and Place of a Public Hearing. DISCUSSION: Background The NBTBID was formed in 2009 (Resolution No. 2009-21) pursuant to the Property and Business Improvement District Law of 1994 (1994 Law), codified in the Streets and Highways Code Sections 36600 et seq. Formed at the request of the original member lodging businesses to help fund marketing and sales promotion, the NBTBID's main objective was to increase tourism and further promote the city as a tourist, meeting and events destination. The supplemental funding was to finance the investments required to increase occupancy in the lodging industry and to be competitive in the conference segment of the tourism market. The NBTBID was administered by Visit Newport Beach, Inc. (VNB), the designated owners' association, and subject to a Management District Plan (MDP), which included the NBTBID's overview, impetus, background, boundary, governance, budget and services. 4-1 Resolution of Intention to Disestablish the Newport Beach Tourism Business Improvement District and Fixing the Time and Place of a Public Hearing February 13, 2024 Page 2 The six original member lodging businesses included the Fairmont Newport Beach, the Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, the Newport Beach Marriott Hotel & Spa, the Radisson Newport Beach, and the Balboa Bay Club and Resort. In 2012, the City Council adopted Resolution No. 2012-28, adding the Newport Dunes Waterfront Resort and Marina to the NBTBID. In 2018, the City Council adopted Resolution No. 2018-54, updating the membership to consist of 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 and Marina, Renaissance Newport Beach Hotel, and the Lido House. Since the adoption of Resolution No. 2018-54, the Fashion Island Hotel was closed and sold to a different business entity, and the Newport Beach Mariott Hotel and Spa was rebranded as VEA Newport Beach: A Marriott Resort and Spa. The current membership includes the Balboa Bay Resort, the Hyatt John Wayne Airport Newport Beach, the Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, VEA Newport Beach: A Marriott Resort and Spa, the Newport Dunes Waterfront Resort and Marina, the Renaissance Newport Beach Hotel and the Lido House. Resolution of Intention Per its amended MDP, the NBTBID expired on January 31, 2024. In lieu of renewal, each member of the NBTID submitted letters requesting the disestablishment of the NBTBID. The NBTBID Board met on January 25, 2024, and unanimously approved A Resolution of the Board of Directors of the Owners' Association of the Newport Beach Tourism Business Improvement District Requesting that the City of Newport Beach Disestablish the District (Attachment A). The Resolution also included a finding that the NBTBID has no indebtedness, no assets, and no remaining revenue to be refunded upon dissolution. The City's Resolution of Intention (Attachment B), if approved, for the NBTBID would provide for the following: • Should any remaining assets be discovered, the City proposes the following distribution plan: (1) all remaining assets, if any, acquired with revenues from the assessments levied within the NBTBID shall be donated to a nonprofit organization; (2) all remaining revenues, if any, derived from the assessments levied within the NBTBID and the sale of assets, shall be refunded to the NBTBID membership in a manner consistent with the manner the assessment was collected; and (3) all outstanding assessment revenues collected after disestablishment shall be spent on improvements and activities specified in the MDP. • A public hearing will be held on Tuesday, March 26, 2024, at 4 p.m. or as soon thereafter on the matter. 4-2 Resolution of Intention to Disestablish the Newport Beach Tourism Business Improvement District and Fixing the Time and Place of a Public Hearing February 13, 2024 Page 3 Per the 1994 Law, a resolution of intention to disestablish the NBTBID must be adopted by the City Council prior to holding a public hearing and considering the adoption of a resolution formally disestablishing the NBTBID. A New Organization to Promote Tourism The Meetings Assessment Partnership (MAP), a California nonprofit mutual benefit corporation, was formed on December 11, 2023 to improve business conditions and the business environment for tourism in Newport Beach through the provision of marketing, sales, special events programs, and other initiatives to promote tourism. The entire NBTBID membership will be transferring to the MAP, preferring to operate in a private capacity for the same benefits as previously provided by the NBTBID. FISCAL IMPACT: The annual assessment rate for the NBTBID membership was three percent (3%) of gross short-term (i.e., stays of 30 calendar days or less) room rental revenue. The City collects the NBTBID assessment monthly and remits 99.75% of the funds collected to VNB. Per the MDP, the City retains 0.25% of the assessment collected to cover the costs of collection and administration. This approximates to roughly $12,000 retained by the City each year. Without the NBTBID, there will be no expenditures for NBTBID collections and administration. Staff in the Finance Department — Revenue Division dedicated approximately 4 hours a month on collections. Their time may now be reallocated to other matters. 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. 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 — NBTBID Resolution Requesting Disestablishment Attachment B — Resolution No. 2024-8 4-3 ATTACHMENT A P A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OWNERS' ASSOCIATION OF THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT REQUESTING THAT THE CITY OF NEWPORT BEACH DISESTABLISH THE DISTRICT WHEREAS, on April 28, 2009, the City Council of the City of Newport Beach ("City") adopted Resolution No. 2009-21, establishing the Newport Beach Tourism Business Improvement District ("NBTBID") pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code Sections 36600 et seq. ("Act"), and a corresponding Management District Plan ("MDP") was placed on file with the City Clerk; WHEREAS, the Newport Beach Conference and Visitors Bureau, a California nonprofit corporation later renamed Visit Newport Beach, was designated as the owners' association of the NBTBID ("Owners' Association") authorized by the Act to administer and implement the improvements, maintenance, and activities described in the MDP; WHEREAS, on April 24, 2012, the City Council adopted Resolution No. 2012-28, which amended the NBTBID and the MDP 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, on July 10, 2018, the Council adopted Resolution No. 2018-54, which amended the NBTBID and the MDP to 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, Renaissance Newport Beach Hotel, and the Lido House; WHEREAS, since the adoption of Resolution No. 2018-54, the Fashion Island Hotel Newport Beach has closed and was sold to a different business entity that is not subject to the NBTBID, and the Newport Beach Marriott Hotel & Spa became VEA Newport Beach, A Marriott Resort & Spa, which is the same business entity and continues to be subject to the NBTBID; WHEREAS, the businesses currently subject to the NBTBID are the Balboa Bay Resort, Hyatt Regency John Wayne Airport Newport Beach, Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, VEA Newport Beach A Marriott Resort & 19 r, Page 2 of 3 Spa, the Newport Dunes Waterfront Resort & Marina, Renaissance Newport Beach Hotel, and the Lido House ("Assessees„); WHEREAS, since formation of the NBTBID, its assessments have supported promotion, improvements, and maintenance within the NBTBID; WHEREAS, on December 11, 2023, articles of incorporation were filed for the Meetings Assessment Partnership ("MAP"), a California nonprofit mutual benefit corporation formed to improve business conditions and the business environment for tourism in the City of Newport Beach through the provision of marketing, sales, and special events programs, along with various other initiatives directly related to promoting tourism and its associated activities; WHEREAS, the activities of the MAP are substantially similar to the activities of the NBTBID and the Assessees would prefer to move forward in a private capacity rather than the NBTBID; WHEREAS, the Owners' Association prepared an annual report for the 2023-2024 fiscal year, which is on file in the City Clerk's Office, reflecting the NBTBID's outstanding unpaid debt, assets, and identifies the amount of funds remaining for distribution in accordance with Act upon disestabiishment; and WHEREAS, the Owner's Association has determined that (1) the NBTBID has no indebtedness, outstanding or unpaid, (2) the NBTBID has no assets, and (3) the NBTBID will have no remaining revenue to be refunded upon dissolution. NOW, THEREFORE, the Board of Directors ("Board") of the Owners' Association of the Newport Beach Tourism Business Improvement District resolves as follows: Section 1: The Board, on behalf of itself and the Assessees, hereby request that the City formally disestablish the NBTBID. Section 2: The Board finds that: (1) the NBTBID has no indebtedness, outstanding or unpaid; (2) the NBTBID has no assets; and (3) the NBTBID will have no remaining revenue to be refunded upon dissolution. Section 3: The recitals provided above are true and correct and are incorporated into the operative part of this resolution. Section 4: 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 20 4-5 Page 3 of 3 Board 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 5: The Board 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, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 6: This resolution shall take effect immediately upon its adoption by the Board, and the Recording Secretary shall certify the vote adopting this resolution, to wit: AYES: NAYS- ABSENT: — ADOPTED this 25th day of January, 2024. d D e Snavely Chairman ATTEST: Ro rta Emmon Recording Secretary 21 ATTACHMENT B RESOLUTION NO. 2024- 8 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, DECLARING ITS INTENTION TO DISESTABLISH THE NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT AND FIXING THE TIME AND PLACE OF A PUBLIC HEARING WHEREAS, on April 28, 2009, the City Council of the City of Newport Beach ("City") adopted Resolution No. 2009-21, establishing the Newport Beach Tourism Business Improvement District ("NBTBID") pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code Sections 36600 et seq. ("Act"), and a corresponding Management District Plan ("MDP") was placed on file with the City Clerk; WHEREAS, the Newport Beach Conference and Visitors Bureau, a California nonprofit corporation later renamed Visit Newport Beach, was designated as the owners' association of the NBTBID ("Owners' Association") authorized by the Act to administer and implement the improvements, maintenance, and activities described in the MDP; WHEREAS, on April 24, 2012, the City Council adopted Resolution No. 2012-28, which amended the NBTBID and the MDP 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, on July 10, 2018, the Council adopted Resolution No. 2018-54, which amended the NBTBID and the MDP to 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, Renaissance Newport Beach Hotel, and the Lido House; WHEREAS, since the adoption of Resolution No. 2018-54, the Fashion Island Hotel Newport Beach has closed and was sold to a different business entity that is not subject to the NBTBID, and the Newport Beach Marriott Hotel & Spa became VEA Newport Beach A Marriott Resort & Spa, which is the same business entity and continues to be subject to the NBTBID; WHEREAS, the businesses currently subject to the NBTBID are the Balboa Bay Resort, Hyatt Regency John Wayne Airport Newport Beach, Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, VEA Newport Beach A Marriott Resort & 4-7 Resolution No. 2024- Page 2 of 4 Spa, the Newport Dunes Waterfront Resort & Marina, Renaissance Newport Beach Hotel, and the Lido House ("Assessees"); WHEREAS, since formation of the NBTBID, its assessments have supported promotions within the NBTBID; WHEREAS, on December 11, 2023, articles of incorporation were filed for the Meetings Assessment Partnership ("MAP"), a California nonprofit mutual benefit corporation formed to improve business conditions and the business environment for tourism in the City of Newport Beach through the provision of marketing, sales, and special events programs, along with various other initiatives directly related to promoting tourism and its associated activities; WHEREAS, the activities of the MAP are substantially similar to the activities of the NBTBID and the Assessees would prefer to move forward in a private capacity rather than the NBTBID; WHEREAS, on January 25, 2024, the Board of Directors ("Board") of the Owners' Association adopted a resolution, requesting on behalf of itself and the Assessees, that the City formally disestablish the NBTBID, and finding that (1) the NBTBID has no indebtedness, outstanding or unpaid, (2) the NBTBID has no assets, and (3) the NBTBID will have no remaining revenue to be refunded upon dissolution; WHEREAS, the Act provides that a business improvement district may be disestablished where there is no outstanding and unpaid indebtedness, and upon the written petition of the owners or authorized representatives of businesses in the district who pay fifty percent (50%) or more of the assessments levied; WHEREAS, the City received the written petition of the owners or authorized representatives of businesses in the NBTBID who pay fifty percent (50%) or more of the assessments levied requesting the disestablishment of the NBTBID; WHEREAS, the Act requires that the City Council adopt a resolution of intention to disestablish a business improvement district which includes, but is not limited to, the time and place for a public hearing on disestablishment and a proposal to dispose of assets, if any, acquired with the revenues of the assessments; and WHEREAS, the Owners' Association prepared an annual report for the 2023-2024 fiscal year ("Annual Report"), which is on file in the City Clerk's Office, reflecting the NBTBID's outstanding unpaid debt, assets, and identifies the amount of funds remaining for distribution in accordance with Act upon disestablishment. Resolution No. 2024- Page 3 of 4 NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: Pursuant to Section 36670 of the Act, the City Council hereby declares its intention to disestablish the NBTBID pursuant to the resolution of the Board, and the written petition of the owners or authorized representatives of businesses in the district who pay fifty percent (50%) or more of the assessments levied, both of whom have requested disestablishment. Section 2: Based on the representation of the Board and the Owners' Association, the City Council finds that: (1) the NBTBID has no indebtedness, outstanding or unpaid; (2) the NBTBID has no assets; and (3) the NBTBID will have no remaining revenue to be refunded upon dissolution. Section 3: As set forth in Section 2, the City Council has found there are no outstanding debts that are unpaid or assets for distribution; however, if any assets are discovered, the City proposes that any remaining assets that exist, after all outstanding debts are paid, be distributed as follows: (1) all remaining assets, if any, acquired with revenues from the assessments levied within the NBTBID shall be donated to a nonprofit organization; (2) all remaining revenues, if any, derived from the levy of assessments and the sale of assets, if any, shall be refunded to the owners of businesses then located and operating within the district by applying the same method and basis that was used to calculate the assessment most recently levied, and 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; and, (3) all outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the MDP. Section 4: Pursuant to Section 36670(b) of the Act, on Tuesday, March 26, 2024, at 4:00 p.m., or as soon thereafter as the matter may be heard, in the City Council Chambers located at 100 Civic Center Drive, Newport Beach, California, a public hearing shall be held by the City Council on the disestablishment of the NBTBID. Section 5: The City Clerk is directed to give notice of the public hearing on the disestablishment of the NBTBID in accordance with Section 36670(b) of the Act. Notice of the public hearing 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. Section 6: The recitals provided above are true and correct and are incorporated into the operative part of this resolution. I • Resolution No. 2024- Page 4 of 4 Section 7: 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 8: 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, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 9: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution. ADOPTED this 13th day of February, 2024. Will O'Neill Mayor ATTEST: Leilani I. Brown City Clerk APPROVED AS TO FORM: CITY TTORNEY'S OF ICE A n C. Harp City Attorney 4-10