HomeMy WebLinkAbout21 - Amendment to Agreement with VNB for TBIDF SEW POST
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CITY OF
NEWPORT BEACH
City Council Staff Report
Agenda Item No. 21
January 28, 2014
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, City Manager
949 - 644 -3002, dkiff @newportbeachca.gov
PREPARED BY: Tara Finnigan
APPROVED: NL--�ILA41
TITLE: Amendment to Ag eement with Visit Newport Beach, Inc. for
Tourism Business Improvement District Management
ABSTRACT:
Under a July 2009 agreement with the City of Newport Beach, Visit Newport Beach, Inc.
serves as the Owner's Association for the Newport Beach Tourism Business
Improvement District ( NBTBID). If the renewal of the NBTBID is approved as proposed,
the agreement would need to be amended to reflect the new term of the NBTBID and
new assessment (3 %). The amendment also proposes extending the notice period for
termination an additional 90 days and other minor changes.
RECOMMENDATION:
Authorize the Mayor and City Clerk to execute the attached amendment to the July 1,
2009 agreement between the City of Newport Beach (City) and Visit Newport Beach,
Inc. (VNB) in a manner and form substantially similar to the attached document.
FUNDING REQUIREMENTS:
The current adopted budget includes sufficient funding for this modification to the
NBTBID's Management District Plan. The City of Newport Beach collects the member
assessments on behalf of the NBTBID and retains 0.25% of 1% of the total
assessments collected to reimburse the City for administrative costs associated with the
NBTBID.
DISCUSSION:
Amendment to Agreement with Visit Newport Beach, Inc. for Tourism Business
Improvement District Management
January 28, 2014
Page 2
The NBTBID was formed by the City of Newport Beach (City) on April 28, 2009,
pursuant to the Property and Business Improvement District Law of 1994 (the 1994
Law), Streets and Highways Code Sections 36600 et seq. The City Council amended
the NBTBID's Management District Plan in April 2012 to add another lodging business,
the Newport Dunes Waterfront Resort and Marina. The NBTBID currently has seven
members including the Fairmont Newport Beach, the Hyatt Regency Newport Beach,
the Newport Dunes Waterfront Resort and Marina, the Newport Beach Marriott
Bayview, the Newport Beach Marriott Hotel & Spa, the Radisson Newport Beach, and
the Balboa Bay Club and Resort (a.k.a., Balboa Bay Resort). The NBTBID is in the final
year of a five -year term.
Under an agreement. with the City, Visit Newport Beach, Inc. (VNB) serves as the
NBTBID's Owner's Association and oversees its administration and coordinates its
marketing and sales activities. Fiscal Year 2013, VNB oversaw the expenditure of
approximately $1.7 million in NBTBID funds.
Proposed Amendment
A related item (Item #13) on the City Council's January 28 meeting agenda pertains to
the renewal of the NBTBID. If approved, the NBTBID would be renewed for a 10 -year
term, the assessment would increase from 2% to 3% of gross short-term room rental
revenue, and the Island Hotel Newport Beach would be added as a NBTBID member.
If the renewal is approved, the July 1, 2009 agreement needs to be amended to reflect
the NBTBID's renewal, new term, and new assessment (3 %). The proposed
amendment (Attachment B) includes these items and two additional changes. The first
involves moving the penalty and interest provisions for the late assessments from the
agreement into the MDP for ease of use by VNB and the member lodging businesses.
The second extends the written notice period for cancellation from 90 days to 180 days.
City staff and VNB agree that, should there ever be a need to terminate, 180 days'
notice would be a more reasonable timeframe for the transition period. Finally, the
amendment includes updated address information for VNB.
Related Items on January 28, 2014 Council Agenda
There are three other VNB - related items on the City Council's January 28 agenda. Two
directly pertain to the NBTBID:
• Item #12 pertains to the modification of the NBTBID's Management District Plan.
• Item #13 pertains to the renewal of the NBTBID.
The third, Item #20, pertains to a proposed amendment to the City's 2011 agreement
with VNB for tourism promotion, branding and marketing services.
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Amendment to Agreement with Visit Newport Beach, Inc. for Tourism Business
Improvement District Management
January 28, 2014
Page 3
ZUT110.101 Lq I i 71 :1 ►11 L1 a 011 F A I A r i T S
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).
Submitted by:
C_/ac";'—
Tara Finnigan
Public Information Manager
Attachments: A. July 1, 2009 Agreement Between the City and VNB for Tourism
Business Improvement District Management
B. Amendment No. One to Tourism Business Improvement District
Management Agreement with VNB
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Attachment A
TOURISM BUSINESS IMPROVEMENT DISTRICT
MANAGEMENT AGREEMENT
THIS TOURISM BUSINESS IMPROVEMENT DISTRICT MANAGEMENT
AGREEMENT ( "Agreement") is made and entered into as of this 1't day of July, 2009,
by and between the CITY OF NEWPORT BEACH, a Municipal Corporation ( "City "), and
the NEWPORT BEACH CONVENTION AND VISITORS BUREAU ( "CVB "), a California
nonprofit 501(c)(6) corporation whose address is 1200 Newport Center Drive, Suite 120,
California, Newport Beach, CA 92660 and is made with reference to the following:
RECITALS
A. City, is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of the
City.
B. The CVB is a California nonprofit 501(c)(6) corporation formed under the laws of
California.
C. Resolution 2009 -21 was adopted on April 28, 2009, by the City Council of the
City, upon the petition of the business owners in the proposed district who will
pay more than fifty percent (50 %) of the assessment proposed to be levied,
which established the Newport Beach Tourism Business Improvement District
("TBID") pursuant to the Property and Business Improvement District Law of
1994 contained in Streets and Highways Code §§ 36600 -36671 ( °1994 Law.) A
copy of the resolution and accompanying management district plan is attached
hereto as Exhibit A and incorporated herein by this reference (hereinafter the
"Plan ").
D. Special assessments levied by the TBID are earmarked to fund solely the
activities and improvements described in the Plan.
E. The Plan designates CVB, as the owner's association, to administer and
implement the TBID's activities and improvements, thus, pursuant to the 1994
Law (§ 36651,) the City is required to contract with CVB to provide the
aforementioned services.
CVB has represented to the City that it possesses the labor and professional
skills and expertise to administer and implement the activities and improvements
of the TBID described in the Plan.
G. Resolution 2009 -21 designates the City Director of Administrative Services or
designee to take all necessary actions to complete the establishment of the TBID
and to levy the assessments and represent the City in all matters pertaining to
the services to be rendered pursuant to this Agreement.
H. Resolution 2009 -21 provides that the City shall be reimbursed 0.25% of the TBID
receipts annually for services rendered in connection with the collection of the
assessment and disbursement to the TBID.
The purpose of this Agreement is to set forth procedures for the collection of the
TBID assessment, its transmission to the City and its remittance to CVB for TBID
operations, and to document procedures and policies governing CVB's
performance of CVB's TBID obligations under the Plan.
The CVB is considering changing its corporate name to Visit Newport Beach, Inc.
Visit Newport Beach, Inc. shall be an approved successor and assign to this
agreement at such time as the CVB becomes Visit Newport Beach, Inc.
NOW, THEREFORE, it is mutually agreed by and between the undersigned
parties as follows:
INCORPORATION OF RECITALS
The Recitals above are true and correct and constitute an enforceable provision of this
Agreement.
2. TERM
The term of this Agreement shall commence on the above written date, and shall
continue with all services provided for in this Agreement for the life of the TBID, unless
terminated earlier as set forth herein.
SERVICES TO BE PERFORMED
CVB shall furnish the following services:
3.1 Administer and implement all of the activities and improvements of the
TBID as stated, listed, or otherwise described in the Plan.
3.2 Provide a monthly accounting of TBID expenditures for the preceding
month to the City in a format acceptable to the City and any additional
documentation and information requested by the City. This may be the same
monthly accounting as is presented to the TBID Board at its monthly meeting
provided that the City agrees in writing that the format of the report is acceptable.
3.3 Provide a quarterly copy of the TBID check register to the City and
promptly respond to any questions related to same.
3.4 At the end of each fiscal year (defined as July 1 through June 3D), hire an
independent professional audit firm to perform a Financial Statement Audit of the
TBID with a Schedule of Notes and other information detailing the TBID's
financial statement as needed. In addition, the Director of Administrative
Services may require the auditors to perform certain "Agreed Upon Procedures"
to determine whether the TBID's expenditures for the preceding year are
consistent with the TBID's Annual Budget, establishing Resolution, the Plan, and
any other applicable law, rule or regulation. A copy of said "Agreed Upon
Procedures" report along with the annual Financial Statement Audit will be
provided to the City within one hundred twenty (120) days of the TBID's fiscal
year end. As long as there is a separate Schedule of Notes for the TBID, the
Financial Statement Audit may be consolidated with the Financial Statement
Audit of the CVB. In addition, the City may conduct its own audit and CVB shall
reimburse the City for the costs of such audit
3.5 Provide City with an annual report that contains all of the information
required by Section 36650 of the 1994 Law, or otherwise required by law, rule or
regulation, including all matters covered under this Agreement, on or prior to May
31 of each year. The City Council may approve the report as filed, or may modify
any particular matter contained in the report and approve it as modified pursuant
to §§ 36635 and 36636 of the 1994 Law.
3.6 Award and administer all contracts necessary for providing the activities
and improvements in the Plan, adhering to the following procedure when
awarding a subcontract: (1) solicit bids for the work; (2) consider the bids
received before awarding the contract; and (3) make a written "Bid Record" after
the contract is awarded, listing the name and amount bid for each bidder and
describing the reasons for awarding the contract to the successful bidder. For
any contract, upon the request of City, CVB shall provide City with a copy of the
contract and the Bid Record,
3.7 No additional services shall be performed by CVB unless approved in
advance in writing by City, stating the dollar value of the services, the method of
payment, and any adjustment in contract time. All such services are to be
coordinated with City and the results of the work shall be monitored by the
Director of Administrative Services; however, the means by which the work is
accomplished shall be the sole responsibility of CVB.
4. TIME OF PERFORMANCE
4.1 Time is of the essence in the performance of services under this
Agreement and CVB shall perform the services in a diligent and timely manner.
CVB shall produce all required reports and documents in the times stated in the
1994 Law and this Agreement. Deviations from time schedule may be made only
with the prior written approval of the Director of Administrative Services. The
failure by CVB to perform the services in a diligent and timely manner may result
in termination of this Agreement by City.
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4.2 Notwithstanding the foregoing, CVB shall not be responsible for delays
due to causes beyond CVB's reasonable control. However, in.the case of any
such delay in the services to be provided under the Plan, each party hereby
agrees to provide notice to the other party so that all delays can be addressed.
5. ASSESSMENT AND COLLECTION
5.1 The TBID assessment is 2.0% of gross short term (stays of 30 days or
less) room rental revenue. Gross room revenue is defined as total room revenue
less any local, state or federal sales taxes or transient occupancy taxes. Stays of
more than 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.
5.2 Except as expressly provided herein, any room rental charge subject.to
Transient Occupancy Tax. (TOT) shall also be subject to the TBID assessment.
5.3 The assessment may be paid directly by the members from their revenue
or members may choose to pass the assessment along to guests as a surcharge
on their room nights. If passed along to guests, the hotel bill would show at least
four charges:
Nightly room rental
$$$
Transient Occupancy Tax
9.0%
Visitor Service Fee
1.0%
Tourism BID Assessment
2.0%
Total
12.0%
5.4 The assessment shall be collected by TBID members as specked in the
Plan, and shall be forwarded to the City each month. Collections in one month
are due to the City on the last day of the following month. To the extent possible,
the procedure shall be .similar to and in parallel with that used in the collection
and submission of the Transient Occupancy Tax (TOT), including allowing the
Marriott hotels to make 13 payments in 12 months. The City shall supply
members with the appropriate form. The TBID assessment shall be deposited in
the City TBID account 860 -2681.
6. REMITTANCE OF ASSESSMENT TO CVB
6.1 The City shall remit the amount received monthly, less the administrative
fee as set forth in Paragraph 7, to CVB for TBID operations. The City will remit
funds as quickly as possible, including the use of electronic transfer. The TBID
funds will be remitted by the City not later than the end of the month following
payment of the assessment to the City. To the extent possible, the procedure
shall be similar to and in parallel with that used in the transfer of a portion of the
Transient Occupancy Tax (TOT) to CVB.
6.2 CVB shall maintain a separate banklchecking account for TBID funds.
Only TBID funds shall be deposited in this account, and only TBID eligible
expenditures shall be paid from this account.
6.3 Neither the City's general fund nor any other fund or monies of the City,
other than the actual TBID assessment received by the City, is liable for any
payment under this Agreement. The contractual or other obligations of the CVB
are not a debt of the City, nor are they a legal or equitable pledge, charge, lien,
or encumbrance upon any of the City s property, income, receipts, or revenues.
7. ADMINISTRATIVE FEE
As provided in the Plan, the City shall be reimbursed from the collected assessments
0.25% of the total amount of the entire assessment, whether or not actually collected,
for administrative expenses. The administrative fee of 0.25% shall be remitted monthly
to the City General Fund account 2720 - 46659.
8. LATE PAYMENT PENALTIES AND INTEREST
8.1 Any TBID member failing to remit the assessment within thirty (30) days of
the time required shall pay an initial mandatory penalty of ten percent (10 %) of
the amount of the late assessment in addition to the assessment.
8.2 Any TBID member failing to remit the assessment and the initial penalty
within sixty (60) days shall be liable for a second mandatory penalty of an
additional ten percent (10 %).
8.3 In addition to the penalties imposed, any member who fails to remit the
assessment shall pay mandatory interest on the amount of assessment that is
due and owing at the rate of one and one -half percent (1 % %) per month for each
month or portion of a month that the assessment remains unpaid exclusive of
penalties.
8.4 Should a member's assessment become twelve months in arrears, it shall
be sent to collections. Penalties, interest and the cost of collection shall become
part of the assessment required to be paid.
8.5 Late payments, penalties, and interest shall be deposited and used in the
same manner as the basic assessment. The cost of collection, if any, shall be
used to pay the collections agency.
9. COMPLIANCE WITH ALL LAWS
9.1 CVB shall at its own cost and expense comply with all statutes,
ordinances, regulations and requirements of all governmental entities, including
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federal, state, county or municipal, whether now in force or hereinafter enacted.
In addition, all services by CVB shall conform to applicable City, county, state
and federal laws, rules, regulations and permit requirements and be subject to
approval of the Director of Administrative Services and City.
9.2 CVB shall comply with the Ralph M. Brown Act (commencing with §
54950 of the Government Code,) at all times when matters within the subject
matter of the TBID are heard, discussed, or deliberated, and with the California
Public Records Act (commencing with § 6250 of the Govemment Code,) for all
documents relating to activities of the TBID.
9.3 CVB shall ensure that its board members will undertake training on the
Brown Act, which may consist of self-study materials, an online course, or in-
person training
10. WORK PRODUCT, BOOKS AND RECORDS
10.1 All plans, studies, specifications, data magnetically or otherwise recorded
on computer or computer diskettes, records, files, reports, etc., in possession of
CVB relating to the matters covered by this Agreement shall be the property of
the City, and CVB hereby agrees to deliver the same to the City upon termination
of the Agreement.
10.2 During the term of this Agreement, and for five years after the term expires
or terminates or for any longer period required by law, CVB shall maintain
detailed records pertaining to the TBID's administration, including but not limited
to ledgers, books of account, invoices, vouchers, canceled checks, and other
records or documents evidencing or concerning budgeting, charges,
expenditures, subcontractors (e.g., bid records,) insurance, permits,
administrative expenses, and overhead. TBID records shall not be comingled
with TOT, tax accounts or any other records of CVB. CVB shall make all such
records available to City for inspection, audit, and /or copying at all reasonable
times.
10.3 CVB shall ensure that each TBID member maintains its records in
accordance with Paragraph 10.2. The TBID shall obtain an agreement from the
TBID member hotels that provides that the City, as part of the periodic audit of
hotels for the purpose of verifying the accurate payment of the Transient
Occupancy Tax, may perform an audit of TBID payments from TBID member
hotels. The agreement shall provide that the City is a third party beneficiary to
the agreement and that the TBID member shall reimburse the City for the City's
costs in performance of an audit if, as a result of the audit, it is determined that
the assessment has been underpaid in an amount equal to or greater than five
percent (5 %) of the assessment due and paid by the member. Such
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reimbursement for the audit shall be paid within thirty (30) days of the date the
City bills the member in writing for the City's costs.
11. INDEPENDENT CONTRACTOR
11.1 It is understood that City retains CVB on an independent contractor basis
and CVB, its board members and staff are not an agent or employee of the City.
The CVB is not a public entity and its board members and staff are not public
officials or employees of the City. The manner and means of conducting the
work are under the control of CVB, except to the extent they are limited by
statute, rule or regulation and the expressed terms of this Agreement. Nothing in
this Agreement shall be deemed to constitute approval for CVB or any of CVB's
employees or agents, to be the agents or employees of City. CVB shall have the
responsibility for and control over the means of performing the work, provided
that CVB is in compliance with the terms of this Agreement. Anything in this
Agreement that may appear to give the City the right to direct CVB as to the
details of the performance or to exercise a measure of control over CVB shall
mean only that CVB shall follow the desires of the City with respect to the results
of the services. CVB shall be responsible for the payment of all taxes, workers'
compensation insurance and unemployment insurance for its employees.
11.2 In the event CVB or any board member, employee, agent, contractor, or
subcontractor of CVB providing services under this Agreement is determined by
a court of competent jurisdiction or the Califomia Public Employees Retirement
System (PERS) to be eligible for enrollment in PERS as an employee of the City,
CVB shall indemnify, protect, defend, and hold harmless the City for the payment
of any employee and/or employer contributions for PERS benefits on behalf of
CVB or its board members, employees, agents, contractors or subcontractors, as
well as for the payment of any penalties and interest on such contributions, which
would otherwise be the responsibility of City.
12. COOPERATION
12.1 CVB agrees to work closely and cooperate fully with the Director of
Administrative Services and any other agencies that may have jurisdiction or
interest in the work to be performed. City agrees to cooperate with CVB.
12.2 CVB shall discuss and review all matters relating to policy and TBID
direction with the Director of Administrative Services or his/her designee in
advance of all critical decision points to ensure the Plan proceeds in a manner
consistent with TBID's goals and policies and all applicable laws, rules and
regulations.
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13. INSURANCE
Without limiting CVB's indemnification of the City, and prior to commencement of work.
CVB shall obtain, provide and maintain at its own expense during the term of this
Agreement, a policy or policies of liability insurance of the type and amounts described
below and in a form satisfactory to the City.
13.1 Certificates of Insurance. CVB shall provide certificates of insurance with
original endorsements to the City as evidence of the insurance coverage required
herein. Insurance certificates must be approved by the City Risk Manager prior
to commencement of performance of services. Current certification of insurance
shall be kept on file with City at all times during the term of this Agreement.
13.2. Signature. A person authorized by the insurer to bind coverage on its
behalf shall sign certification of all required policies.
13.3. Acceptable Insurers. All insurance policies shall be issued by an
insurance company currently authorized by the Insurance Commissioner to
transact business of insurance in the State of California, with an assigned
policyholders' Rating of A (or higher) and Financial Size Category Class VII (or
larger) in accordance with the latest edition of Best's Key Rating Guide, unless
otherwise approved by the City Risk Manager.
13.4. Coverage Requirements.
A. Workers' Compensation Coverage. CVB shall maintain Workers'
Compensation Insurance and Employer's Liability Insurance for its employees in
accordance with the laws of the State of California. In addition, CVB shall require
each subcontractor to similarly maintain Workers' Compensation Insurance and
Employer's Liability Insurance in accordance with the laws of the State of
California for all of the subcontractor's employees. Any notice of cancellation or
non - renewal of all Workers' Compensation policies must be received by the City
at least thirty (30) calendar days (or 10 calendar days written notice of non-
payment of premium) prior to such change. The insurer shall agree to waive all
rights of subrogation against the City, its officers, agents, employees and
volunteers for losses arising from work performed by CVB for the City.
B. General Liability Coverage. CVB shall maintain commercial
general liability insurance in an amount not less than one million dollars
($1,000,000) per occurrence for bodily injury, personal injury, and property
damage, including without limitation, contractual liability. If commercial general
liability insurance or other form with a general aggregate limit is used, either the
general aggregate limit shall apply separately to the work to be performed under
this Agreement, or the general aggregate limit shall be at least twice the required
occurrence limit.
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C. Automobile Liability Coverage. CVB shall maintain automobile
insurance covering bodily injury and property damage.for all activities of CVB
arising out of or in connection with services to be performed under this
Agreement, including coverage for any owned, hired, non -owned or rented
vehicles, in an amount not less than one million dollars ($1,000,000) combined
single limit for each occurrence.
13.5 Endorsements. Each general liability and automobile liability insurance
policy shall be endorsed with the following specific language:
A. The City, its elected or appointed officers, officials, employees,
agents and volunteers are to be covered as additional insureds with respect to
liability arising out. of work performed by or on behalf of CVB.
B. This policy shall be considered primary insurance as respects to
the City, its elected or appointed officers, officials, employees, agents and
volunteers as respects to all claims, losses, or liability arising directly or indirectly
from CVB's operations or services provided to the City. Any insurance
maintained by the City, including any self- insured retention the City may have,
shall be considered excess insurance only and not contributory with the
insurance provided hereunder.
C. This insurance shall act for each insured and additional insured as
though a separate policy had been written for each, except with respect to the
limits of liability of the insuring company.
D. The insurer waives all rights of subrogation against the City, its
elected or appointed officers, officials, employees, agents and volunteers.
E. Any failure to comply with reporting provisions of the policies shall
not affect coverage provided to the City, its elected or appointed officers, officials,
employees, agents or volunteers.
F. The insurance provided by this policy shall not be suspended,
voided, canceled, or reduced in coverage or in limits, by either party except after
thirty (30) calendar days written notice (or 10 calendar days notice of non-
payment of premium) has been received by the City.
13.6. Timely Notice of Claims.. CVB shall give the City prompt and timely notice
of claim made or suit instituted arising out of or resulting from CVB's performance
under this Agreement.
13.7. Additional Insurance. CVB shall also procure and maintain, at its own cost
and expense, any additional kinds of insurance, which in its own judgment may
be necessary for its proper protection and prosecution of the work.
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14. INDEMNITY AND HOLD HARMLESS
14.1 To the fullest extent permitted by law, CVB shall indemnify, defend and
hold harmless the City, its City Council, boards and commissions, officers,
agents, volunteers, and employees (collectively, the "Indemnified Parties ") from
and against any and all claims (including, without limitation; claims for bodily
injury, death or damage to property), demands, obligations, damages, actions,
causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and
expenses (including, without limitation, attorney's fees, disbursements and court
costs) of every kind and nature whatsoever (individually, a Claim; collectively,
"Claims ",) which may arise from or in any manner relate (directly or indirectly) to
the Agreement, any breach of the terms and conditions of this Agreement, any
violation of any law, rule or regulation by CVB, any work performed or services
provided under this Agreement including, without limitation, CVB's presence or
activities conducted pursuant to this Agreement (including the negligent and/or
willful acts, errors and/or omissions of CVB, its board members, principals,
officers, agents, employees, vendors, suppliers, consultants, contractors,
subcontractors, anyone employed directly or indirectly by any of them or for
whose acts they may be liable for any or all of them.)
14.2 Notwithstanding the foregoing, nothing herein shall be construed to
require CVB to indemnify the Indemnified Parties from any Claim arising from the
sole negligence or willful misconduct of the Indemnified Parties. Nothing in this
indemnity shall be construed as authorizing any award of attorney's fees in any
action on or to enforce the terms of this Agreement. This indemnity shall apply to
all claims and liability regardless of whether any insurance policies are
applicable. The policy limits do not act as a limitation upon the amount of
indemnification to be provided by CVB.
14.3 It is understood that the duty of CVB to indemnify and hold harmless
includes the duty to defend as set forth in Section 2778 of the California Civil
Code. Acceptance by the City of insurance certificates and endorsements
required under this Agreement does not relieve CVB from liability under this
indemnification and hold harmless clause. This indemnification and hold
harmless clause shall apply to any damages or claims for damages whether or
not such insurance policies shall have been determined to apply and shall
survive the termination of this Agreement. By execution of this Agreement, CVB
acknowledges and agrees to the provisions of this Paragraph and that it is a
material element of consideration.
15. CITY'S RESPONSIBILITIES
To assist CVB in the execution of its responsibilities under this Agreement, the City
agrees to, where applicable:
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15.1 Provide access to, and upon request of CVB, one copy of all existing
relevant information on file at the City. The City will provide all such materials in
a timely manner so as not to cause delays in CVB's work schedule.
15.2 Administer annual TBID proceedings.
16. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the services to be provided
under this Agreement shall not be assigned, transferred, contracted or subcontracted
out without the prior written approval of City.
17. CONFLICT OF INTEREST
17.1 CVB or its employees may be subject to the provisions of the California
Political Reform Act of 1974 (the "Act'), which (1) requires such persons to
disclose any financial interest that may foreseeably be materially affected by the
work performed under this Agreement, and (2) prohibits such persons from
making, or participating in making, decisions that will foreseeably financially
affect such interest.
17.2 If subject to the Act, CVB shall conform to all requirements of the Act.
Failure to do so constitutes a material breach and is grounds for immediate
termination of this Agreement by City. CVB shall Indemnify and hold harmless
the City for any and all claims for damages resulting from CVB's violation of this
Paragraph.
17.3 CVB certifies that it has disclosed to the City any actual, .apparent, or
potential conflicts of interest that may exist relative to the services to be provided
pursuant to this Agreement. CVB agrees to advise the City of any actual,
apparent or potential conflicts of interest that may develop subsequent to the
date of execution of this Agreement. CVB further agrees to complete any
statements of economic interest required by either City ordinance or State law.
18. TERMINATION
18.1 Either party may terminate this Agreement by providing the other party
ninety (90) calendar days written notice prior to the effective date of termination.
In the event of such termination, CVB shall promptly remit, refund, or otherwise
transfer all remaining TBID assessments held by CVB to the City within seven (7)
calendar days of the date of termination. CVB shall further deliver to the City
copies of all reports, analyses, and other work product, whether completed or
not, that was prepared or was being prepared under the provisions of this
Agreement within fourteen (14) calendar days of termination.
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18.2 The City may terminate this agreement earlier if it determines that CVB
has misappropriated funds, committed malfeasance, or violated any law, rule or
regulation in providing the activities and improvements described in the Plan or in
otherwise administering and implementing the Plan; or has materially breached
this Agreement and has failed to cure the breach within 30 days after receiving
the City's written demand for cure.
19. WAIVER
A waiver by either party of any breach of any term, covenant or condition contained
herein shall not be deemed to be a waiver of any subsequent breach of the same or any
other term, covenant or condition contained herein, whether of the same or a different
character.
20. SEVERABILITY
If any term or portion of this Agreement is held to be invalid, illegal, or otherwise
unenforceable by a court of competent jurisdiction, the remaining provisions of this
Agreement shall continue in full force and effect.
21. CONTROLLING LAW AND VENUE
The laws of the State of California shall govern this Agreement and all matters relating
to it and any action brought relating to this Agreement shall be adjudicated in a court of
competent jurisdiction in the County of Orange.
22. AMENDMENTS
This Agreement may be modified or amended only by a written document executed by
both CVB and the City and approved as to form by the City Attorney. The Director of
Administrative Services is authorized to execute on behalf of the City, with approval of
the City Attorney as to form, an amendment to Sections 3, 5, 6, 8, 10, 13 and 26.
23. INTEGRATED CONTRACT
This Agreement represents the full and complete understanding of every kind or nature
whatsoever between the parties hereto, and all preliminary negotiations and
agreements of whatsoever kind or nature are merged herein. No oral agreement or
implied covenant shall be held to vary the provisions herein.
24. INTERPRETATION
The terms of this Agreement shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either party by reason of the
authorship of the Agreement or any other rule of construction which might otherwise
apply.
12
15
25. EQUAL OPPORTUNITY EMPLOYMENT
CVB represents that it is an equal opportunity employer and it shall not discriminate
against any subcontractor, employee or applicant for employment because of race,
religion, color, national origin, disability, ancestry, sex or age or other prohibited criteria.
26. NOTICES
All notices, demands, requests or approvals to be given under the terms of this
Agreement shall be given in writing, and conclusively shall be deemed served when
delivered personally, or on the third business day after the deposit thereof in the United
States mail, postage prepaid, first -class mail, addressed as hereinafter provided. All
notices, demands, requests or approvals from CVB to the City shall be addressed to the
City at:
Attn: Director, Administrative Services Department and
Economic Development Administrator
City of Newport Beach
3300 Newport Boulevard
P.O. Box 1768
Newport Beach, CA 92658 -8915
Phone: 949 -644 -3127
Fax: 949 - 6443339
All notices, demands, requests or approvals from City to CVB shall be addressed to
CVB at
Attention: Gary Sherwin, President
Newport Beach Conference and Visitors Bureau
1200 Newport Center Drive, Suite 120
Newport Beach, CA 92660
Phone: 949 - 719 -6100
Fax: 949 - 719 -6101
27. AUTHORITY TO EXECUTE
The person executing this Agreement on behalf of the parties hereto warrants and
represents that he /she has the authority to execute this Agreement on behalf of his /her
entity and has the authority to bind that party to the performance of its obligations
hereunder.
28. THIRD PARTY BENEFICIARY
The terms and provisions of this Agreement shall be binding upon and inure to the
benefit of the parties, and their respective successors and assigns, and is made solely
13
16
and specifically for their benefit. No other person shall have any rights, interest or claims
hereunder or be entitled to any benefits under or on account of this Agreement as a
third -party beneficiary or otherwise.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and year first written above.
APPROVED AS TO FORM:
OFFICE O THE CITY ATTORNEY cat)
y
ichael Tones,
Deputy City Attorney
ATTEST:
By: v""
r Leilani Brown,
City Clerk
CITY OF NEWPORT BEACH,
A Municipal Corporation
By: -
Dennis Danner,
Administrative Services Director,
City of Newport Beach .
NEWPORT$EACH CONFERENCE &
CEO
Print Name:
By: 1399 %..alla- 7'"1�2Gr
Michaela M. Reid,
Controller
Print Name: Mi [hae/t� M. !?eicl
Attachment: Exhibit A - Resolution 2009 -21
Exhibit B - Management District Plan
14
RESOLUTION NO. 2009-21
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT
BEACH DECLARING THE RESULTS OF THE MAJORITY PROTEST
PROCEEDINGS AND FORMING THE NEWPORT BEACH TOURISM
BUSINESS 01PROVEMENT DISTRICT
WHEREAS, the Property and Business Improvement District law of 1994 (Streets and
Highways Code § 36600 et seq.) authorizes the city to establish a tourism business improvement
districts upon petition by a weighted majority of the lodging business owners located within the
boundaries of the District.
WHEREAS, a majority of the lodging business owners subject to assessment, as
weighted according to the amount of the assessment to be paid by the petitioner, within the
boundaries of the proposed Newport Beach Tourism Business Improvement District ( NBTBID)
have petitioned the City Council to establish the NBTBID.
WHEREAS, the lodging business owners subject to assessment who signed the petitions
will pay more than fifty (50) percent of the proposed assessment.
WHEREAS, included with the petitions was a management district plan summary that
describes the proposed assessment to be levied on lodging businesses within the NBTBID to pay
for matketing; activities, and those other activities authorized in Streets and fighways Code
§36613..
WHEREAS, the lodging businesses within the NBTBID will be benefited by the
activities and improvements set forth in the Mar ageme nt District Plan.
WHEREAS, at 7:00 p.m. on March 10, 2009, at 3300 Newport Boulevard, Newport
Beach, California 92663, the City Council adopted a Resolution of the City coemcil of the city of
Newport Beach Declaring Its Intention to Establish the Newport Beach Tourism Business
Improvement District ( NBTBID) and Fixing the Time and Place of a Public Meeting and a
Public Hearing Thereon and Giving Notice Thereof. Resolution Number 2009 -14.
WHEREAS, the public meeting and public hearing to consider the formation of the
NBTBID has been properly noticed in accordance with Streets and Highways Code §36623.
WHEREAS, at 7:00 p.m. on April 14. 2009, at 3300 Newport Boulevard, Newport
Beach, California 92663, the City Council held a public meeting regarding the establishment of
the NBTBID, and no objections or protests to the establishment of the NBTBID and the levy of
the proposed assessment were registered.
1a
WHEREAS, at 7:00 p.m. on April 28, 2009, at 3300 Newport Boulevard, Newport
Beach, California 92663, the City Council held a public hearing regarding the establishment of
the NBTBID, and the City Council heard and received all objections and protests to the
establishment of the NBTBID and the levy of the proposed assessment.
WHEREAS, the City Clerk has determined that there was no majority protest. A
majority protest is defined as written protests received from owners of businesses in the proposed
area which would pay more than fifty percent (50%) of the assessments proposed to be levied.
Protests are weighted based on the assessment proposed to be levied on each lodging business.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL THAT:
1. The recitals set forth herein are adopted by the City Council as findings and they are tote
and eorreOL
2. The Newport Beach Tourism Business Improvement District ( NBTBID) is hereby
established for a five (5) year term that will expire on April 28, 2014.
3. The assessments levied for the NBTBID shall be applied toward sales promotion and
marketing programs to mmket Newport Beach as a tourist, meeting and event destination,
and other activities as set forth in Streets and Highways Code §36613.
4. The revenue from the levy of the assessments on lodging businesses within the NBTBID
may not be used to provide for activities or improvements outside the NBTBID or for any
purpose other than those specified herein and the Resolution of Intention.
5. Assessments levied on lodging businesses pursuant to this Resolution shall be levied on
the basis of benefit Because the services provided are intended to increase room rentals,
an assessment based on room rentals is the best measure of benefit
7. The activities and improvements set forth will be fimded by the levy of an assessment on
lodging businesses within the NBTBID, as described in the Management District Plan
that is on file with the City Clerk
8. No bonds shall issue to fiord the NBTBID.
9. The boundaries of the NBTBID shall be the boundaries of the City of Newport Beach..
Please see the attached map, inwrpotated herein as Exhibit A.
19
10. The NBTBID shall assess six (6) hotels within the city limits of Newport Beach 2.004. of
gross short term (stays less than 30 days) room rental revenue. The NBTBID shall
include 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. 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 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.
11. The assessments shall be used for the purposes ad forth above and any fiords 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 set forth herein.
12. The assessments to fiord the activities and improvements for the NBTBID will be
collected at the same time and in the same manner as are transient occupancy taxes, and,
in accordance with Streets and Highways Code §36631.
13. The Newport Beach Conference and Visitors Bureau (NBCVB) shall be the Owners
J ssMciatipn pursuant to Streets and Highways Code §36614.5.
14. The NBCVB, pursuant to Streets and Highways Code §36650, 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 and activities described in the report.
The first report shall be due after the first year ofoperation of the district
15. Business in the NBTBID established pursuant to this resolution will be subject to any
amendments to the Property and Business Improvement District Law of 1994 (California
Streets and Highways Code §36600 et seq.).
16, The Director of Administrative Service, or his/her designee, is directed to take all
necessary actions to complete the establishment of the NBTBID and to levy the
assessments. The City of Newport Beach shall be reimbursed 0.25% of the TBID receipts
annually for services rendered in connection with the collection of the levy and
disbursement to the TBID.
17. The City Clerk is directed to record in the Orange County Recorder's Office a notice and
assessment diagram, as required by Streets and Highways Code §36627. The text of the
recorded notice shall state that the assessment is levied only against lodging businesses
within the area of the NBTBID.
18. This resolution shall take effect immediately upon its adoption by the, City Council. The
3
collection of the assessment levied by the 1BID shall commence May 1, 2009.
I >ffiREBY CERTIFY that the foregoing resolution of formation was introduced and adopted at
a regular meeting of the City Council on the 28a dayg9IVzil 2009.
Mayor
21
STATE OF CALIFORNIA }
COUNi`Y OF ORANGE } ea
CITY OF NEWPORT BRACH }
L Leflani L Brown, City Clerk of the City of Newport Beach, Cabbraia, do hereby
certify that the whole number of members of the City Council is seven; that the foregoing resolution,
being Resolution No. 2009 -21 was duly and regularly introduced before and adopted by the City
Council of said City at a regular meeting of said Council, duly and regularly held on the 28th day of
April. 2009, and that the same was so passed and adopted by the following vote, to wit
Ayes: Henn. Rosanshy. Curry, Webb, Gardner, Daigle. Mayor SeUA
Noes: None
Absent None
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscn'bed my name and affixed the
offichd seal of said City this 29th day of Apra. 2009.
(Seal)
V1�NU� !t �rQLinl/
City Clerk
Newport Beach, California
23
NEWPORT BEACH TOURISM BUSINESS
IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
,Submitted to Cite
Newport Beach Conference and Visitors Bureau
March 2, 2009
by
lifurIT nox in lomm
l
R ES0UIRC ES
24
NEWPORT BEACH TOURISM BID
MANAGEMENT DISTRICT PLAN
TABLE OF CONTENTS
I. INTRODUCTION AND OVERVIEW ........................................................................... 2
11. WHY A TOURISM BID FOR NTEWPORT BEACH? ..................... ..............................3
19L WHAT IS A TOURISM BUSINESS IMPROVEMENT DISTRICT ? ...........................4
IV. NEWPORT BEACH TOURISM BID BOUNDARY ....................... ..............................4
V. SERVICE PLAN AND BUDGET .................................................................................. 7
V1. TOURISM BID GOVERNANCE ................................................................................... 9
APPENDIX 1 —THE PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF
1994 ............................ ........ ...................................................................... to
APPENDIX 2 — LODGING BUSINESSES TO BE ASSESSED WITHIN NEWPORT BEACH
TB11) .................. ............................................................................................................ ......... 21
Newport Beacb Tourism BED Management District Plan Page I
I. INTRODUCTION AND OVERVIEW
Developed by the Newport Beach Conference and Visitors Bureau ( NBCVB), the Newport
Beach Tourism Business Improvement District ( NBTBID) is a benefit assessment district
proposed to help fund marketing and sales promotion efforts for Newport Beach lodging
businesses. This approach has been used successfully in other destination areas throughout the
country to improve tourism and drive additional room nights.
Location: The City of Newport Beach.
Services: Marketing and sales promotions to increase tourism and to market Newport Beach
as a tourist, meeting and event destination. These services are designed to benefit
the six hotels that will be assessed within the City of Newport Beach.
Budget: The total NBTBID budget for year one of its five (5) year operation is a base of
approximately $1.7 million.
Cost: Annual assessment rates are 2.0% of gross short term (stays less than 30 days)
room rental revenue on six lodging businesses within the City limits of Newport
Beach. The NBTBID shall include 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 tel
business stays of more. than 30 consecutive days shall
not be assessed. Based on the benefit received, stays by airline personnel and
government employees on government business shall not be assessed. Similarly,
stays at time shares shall not be assessed.
Additional lodging facilities that wish to pay the assessment and receive NBTBID
services in the future may do so with the approval of the NBCVB Board and
through the execution of an agreement with the City.
Formation: TBID formation requires submittal of petitions from lodging businesses
representing more than 50% of the total annual assessment followed by a City
Council hearing and an opportunity for a written protest. The assessed lodging
business owners will receive notice of the public meeting and the public hearing
by mail. If there is a majority written protest, the TBID will not be formed.
Duration: The proposed District NBTBID will have a five -year life. The NBTBID
assessment will be implemented beginning May 1, 2009 and will be in effect for
five years. After five years, the petition and City Council hearing process must be
repeated for the NBTBID to be renewed. Also, once per year there is a 30 day
period in which owners paying more than 50% of the assessment may protest and
terminate the district.
Newport Beach Tourism BED Management District Plan
Page 2
26
11. WHY A TOURISM BID FOR NEWPORT BEACH?
There are several reasons why now is the right time to form a Tourism BID in Newport Beach;
the most compelling reasons are as follows:
I. The Need to Increase Occupancy
The formation of the NBTBID is a proactive effort to provide supplemental funding
beyond that provided by the City of Newport Beach. The funding ensures the NBCVB
has adequate financing for the investment required to increase occupancy in the lodging
industry and reach 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 Tax Revenues
As occupancy rates increase, so too will the City's TOT revenue. With stable
public/private funding for the NBCVB, annual occupancy rates should increase
significantly as the new marketing and sales promotion programs are implemented.
Greater occupancy will also produce an increase in sales tax revenues from tourist
spending. This represents a substantial return to the City. The formation of a NBTBID in
partnership with the NBCVB creates a stable funding source tied directly to tourism
promotion
3. The Ability to Grow the Economy without Substantial Development
The NBCVB expects to achieve the above levels of revenue growth without a
proportionate increase in the "footprint" of the tourism industry infrastructure. Little or
no development should be required to raise average occupancy rates. Any development
required to raise occupancy rates even more should be relatively minor in scope compared
to the existing facilities.
Newport Beach Tourism BID Management District Plat)
Page 3
27
III. WHAT IS A TOURISM BUSINESS IMPROVEMENT DISTRICT?
Tourism Business Improvement Districts (TBIDs) utilize the efficiencies of private sector
operation in the market -based promotion of tourism districts. Tourism B[Ds allow lodging and
tourism- related business owners to organize their efforts to increase tourism. Tourism - related
business owners within the district fund a TBID, and those funds are used to provide services that
the businesses desire and that benefit the lodging businesses within the District
Tourism BID services may include, but are not limited to:
➢ Marketing of the Area
➢ Tourism Promotion Activities
➢ Sales Lead Generation
In California, Tourism BIDS are formed pursuant to the Property and Business Improvement
District Law of 1994 (PBID Law). This law allow 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 {ands raised are returned to the
Private non - profit corporation governing the district.
There are many benefits to Tourism BIDs:
➢ Funds cannot be diverted for other government programs;
➢ Tourism BIDS are customized to fit the needs of each tourism district;
➢ They allow for a wide range of services, including those listed above;
➢ Tourism BIDS are designed, created and governed by those who will pay the
assessment;
➢ The statute requires petition support from lodging businesses paying over 50% of
the annual proposed assessments;
➢ They provide a stable funding source for tourism promotion.
The Property and Business Improvement District Law of 1994 (AB 3754), as amended January 1,
2008, is provided in Appendix 1 of this document.
Newport Beach Tourism BID Management District Plan Page 4
IV. NEWPORT BEACH TBID BOUNDARY
The Newport Beach TBID will include six lodging businesses available for public occupancy
within the boundaries of the City of Newport Beach. The hotels to be included are 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.
The boundary currently includes 6 lodging business. Please see the map below. A larger map is
available on request by calling (949) 719 -6100.
Newport Beach Tourism BID Management District Plan
Page 5
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V. SERVICE PLAN AND BUDGET
A. Assessment
The Newport Beach TBID will include six lodging businesses of 100 rooms or more, existing or
in the future, available for public occupancy within the boundaries of the City of Newport Beach.
The hotel's to be included are 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. 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.
Additional lodging facilities that wish to pay the assessment and receive NBTBID services in the
future may do so with the approval of the NBCVB Board and through the execution of an
agreement with the City.
Bonds will not be issued.
The amount of assessment, if passed on to each transient, shall be 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.
B. Determination of Special Benefit
State law provides that the expenses of the district shall be apportioned in proportion to the benefit
received by assessed businesses.
A special benefit is defined as a particular and distinct benefit over and above general benefits
conferred on the public at large. Conversely „a general benefit is a benefit to businesses in the
surrounding community or a benefit to the public in general resulting from the improvement,
activity or service to be provided by the assessment levied. Many general benefits to the public at
large are conveyed by municipal services, such as fire protection, police services and public transit
services. These services are targeted to serve the public at large and do not confer special benefits
on particular businesses.
The services in this Management District Plan are designed to provide targeted services to the
assessed lodging businesses. These services are tailored not to serve the general public, but rather
to serve the specific lodging businesses within the District, e.g., the proposed activities are
specifically targeted to increase room nights for assessed lodging businesses within the boundaries
of the District, and are narrowly tailored. For example, only the assessed lodging businesses will
receive sales leads from the sales efforts paid for with TBID monies. In addition, listing on
websites and collateral materials paid for with TBID monies will only include the six assessed
businesses.
Newport Beach Tourism BID Management District Plan Page 7
31
The activities paid for from assessment revenue are lodging business services creating special
benefit to those businesses.. In addition, these activities are not for the benefit of the general public
and do not provide general benefit as defined above. All general benefits (if any) to the surrounding
community and general public are intangible and unquantifiable. It is appropriate that these special
business - related benefits be funded through business assessments.
C. Time and Manner for Collecting Assessments
The NBTBID assessment will be implemented beginning May 1, 2009 and will continue for five
years. The City of Newport Beach will be responsible for collecting the assessment on a monthly
basis (including any delinquencies, penalties and interest) from each of the six lodging business
located in that the boundaries of the TBID. Assessments shall be collected monthly and the City
shall take all reasonable efforts to collect the assessments from each lodging business. The City
of Newport Beach shall forward the assessments to the NBCVB which will have the
responsibility to manage the BID programs as provided in the Management District Plan. The
City shall charge a fee of up to 1/4 of 1% of the budget to cover its administrative expenses.
D. Service Plan Budget and Programs to be Provided:
Service Plan Budget Summary- Calendar Years 2009 -2014
The summary of the calendar year 2009 (year one) service plan budget for the NBTBID is
provided below. The total five year improvement and service plan budget is projected at
approximately $1.7 million annually, or $8.5 million through 2014.
The assessments collected will fund the direct sales efforts for group sales to generate room
nights at the six participating hotels. The direct sales budget will include:
Sales and Marketing
Communications and Advertising
Administration and Advocacy
Additionally, the City will collect' /4 of 1% of the total assessment for administrative expenses.
E. Annual Service Plan:
A service plan budget has been developed to deliver service levels throughout the District. An
annual service plan and budget will be developed and approved by the NBCVB Board. Please
see the budget exhibit below. The budget also includes a portion for contingencies and renewal
of the District. Should the NBCVB Board approve, finds may be appropriated for the renewal
effort. If there are funds remaining at the end of the District term and lodging businesses choose
to renew, these remaining funds could be transferred to the renewed District. If there are funds
remaining at the end of the District and lodging businesses choose not to renew, any remaining
funds will be spent consistent with this Plan.
This service plan will only include hotels that are participating in the NBTBID.
Newport Beach Tourism BID Management District Plan Page 8
32
Newport Beach Tourism BID
VI. BID GOVERNANCE
A. Newport Beach Tourism BID Corporation Governance
The NBCVB shall serve as the Owners' Association for the NBTBID. The Executive Director or
Tourism Director of the NBCVB shall be charged with the day - today operations of the Tourism
BID.
Newport Beach Tourism BID Management District Plan
Page 9
33
APPENDIX 1- THE PROPERTY AND BUSINESS IMPROVEMENT
DISTRICT LAW OF 1994
APPENDIX 1- THE PROPERTY AND BUSINESS IMPROVEMENT
DISTRICT LAW OF 1994
STREETS AND HIGHWAYS CODE
SECTION 36600 -36604
Amended January 1, 2009
Declarations
36600. This part shall be known and may be cited as the 'Property and Business Improvement
District Law of 1994."
36601. The Legislature finds and declares all of the following:
(a) Businesses located and operating within the business districts 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 the business districts of its cities 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 cities to fund business related improvements,
maintenance, and activities through the levy of assessments upon the businesses or real property
that benefits from those improvements.
(d) Assessments levied for the purpose of providing improvements and promoting activities that
benefit real property or businesses are not taxes for the general benefit of a city, but are
assessments for the improvements and activities which confer special benefits upon the real
property or businesses for which the improvements and activities are provided.
36602. The purpose of this part is to supplement previously enacted provisions of law that
authorize cities to levy assessments within a business improvement area This part does 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.
36603. 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
Newport Beach Tourism BUD Management District Plan Page 10
Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with
Section 2800)).
36603.5. Any provision in this part that conflicts with any other provision of law shall prevail
over the other provision of law.
36604. 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.
Definitions
36606. "Assessment' means a levy for the purpose of acquiring, constructing, installing, or
maintaining improvements and promoting activities which will benefit the properties or
businesses located within a property and business improvement district.
36607. "Business" means all types of businesses and includes financial institutions and
professions_
36608. "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.
36609. "City council' means the city council of 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.
36610. "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.
(j) Facilities or equipment, or both, to enhance security of persons and property within thearea.
(k) Ramps, sidewalks, plazas, and pedestrian malls.
(I) Rehabilitation or removal of existing structures.
Newport Beach Tourism BID Management District Plan Page 11
35
36611. "Property and business improvement district," or "district," means a property and
business improvement district established pursuant to this part.
36612. "Property" means real property situated within a district.
36613. "Activities" means, but is not limited to, all of the following.
(a) Promotion of public events which benefit businesses or real property in the district.
(b) Furnishing of music in any public place within the district.
(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) Activities which benefit businesses and real property located in the district.
36614. "Management district plan" or "plan" means a proposal as defined in Section 36622.
36614.5. "Owners' association" means a private nonprofit entity that is under contract with a city
to administer or implement activities and improvements 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 v<zth the California Public Records Act (Chapter 3.5 (commencing
with Section 6250) of Division 7 of Title 1 of the Government Code), for all documents relating
to activities of the district.
36615. "Property owner" or "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. The
city council has no obligation to obtain other information as to the ownership of land, and its
determination of ownership shall be final and conclusive for the purposes of this part. Wherever
this subdivision requires the signature of the property owner, the signature of the authorized
agent of the property owner shall be sufficient.
36616. "Tenant" means an occupant pursuant to a lease of commercial space or a dwelling unit,
other than an owner.
Prior Law
36617. 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
Newport Beach Tourism BID Management District Plan Page 12
36
Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is
valid and effective and is unaffected by this part.
Establishment
36620. A property and business improvement district may be established as provided in this
chapter.
36620.5. 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. (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 activities and improvements, 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. 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 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. The management district plan shall contain all of the following:
(a) 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.
(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 lands and
Newport Beach Tourism BID Management District Plan Page 13
37
businesses included. 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 and activities proposed for each year of operation of the district and the
maximum cost thereof.
(e) The total annual amount proposed to be expended for improvements, maintenance and
operations, and debt service in each year of operation of the district.
(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.
(j) Any proposed Hiles and regulations to be applicable to the district.
(k) 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, including operation and
maintenance. The plan may provide that all or any class or category of real property which is
exempt by law from real property taxation may nevertheless be included within the boundaries of
the district but shall not be subject to assessment on real property.
(1) Any other item or matter required to be incorporated therein by the city council.
36623.(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 protest is interested
sufficient to identify the business and, if a person subscribing is not shown on the official records
Newport Beach Tourism BID Management District Plan Page 14
38
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. A written protest which does
not comply with this section shall not be counted in determining a majority protest. If written
protests are received from the owners of businesses in the proposed district which 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.
36624. 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 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 or 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. (a) If the city council, following the public hearing, decides to establish the proposed
property and business improvement district, the city council shall adopt a resolution of formation
that shall contain all of the following:
(1) A brief description of the proposed activities and improvements, 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 about whether bonds will be issued, and a description of the
exterior boundaries of the proposed district. 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 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 or businesses in the district established by the resolution shall
be subject to any amendments to this part.
(6) A statement that the improvements and activities to be provided 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 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.
(7) A finding that the property or businesses within the area of the property and business
improvement district will be benefited by the improvements and activities funded by the
assessments proposed to be levied. (b) The adoption of the resolution of formation and
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.
Newport Beach Tourism BID Management District Plan
Page 15
39
36626. 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 paragraphs (1) to (8), inclusive, of subdivision (b) of
Section 36625, but need not contain information about the preliminary resolution if none has
been adopted.
36627. Following adoption of the resolution establishing the district pursuant to Section 36625
or 36626, the clerk of the city shall record a notice and an assessment diagram pursuant to
Section 3114. If the assessment is levied on businesses, the text of the recorded notice shall be
modified to reflect that the assessment will be levied on businesses, or specified categories of
businesses, within the area of the district. No other provision of Division 4.5 (commencing with
Section 3100) applies to an assessment district created pursuant to this part.
36628. 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. 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 and activities.
36629. 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 parking and business improvement area.
36630. 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 a new
district established pursuant to this part.
Assesments
36631. 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 establishing the management
district plan described in Section 36622. 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 penalties for delinquent payment. All delinquent payments for
assessments levied pursuant to this part shall be charged interest and penalties.
Newport Beach Tourism BID Management District Plan Page 16
40
36632. (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. 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. 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. The owners' association may, at anytime, 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. (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 of increased assessment, the city council shall comply with Section 36623. Notice
of all other public meetings and 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 meeting.
(2) A complete copy of the resolution of intention shall be mailed by fast class mail, at least 10
days before the public meeting, 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. 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.
Newport Beach Tourism BID Management District Plan
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41
Financial!
36640. (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
Governance
36650. (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 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 and activities to be provided for that fiscal year.
(3) An estimate of the cost of providing the improvements and the 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 amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
(6) The 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
Newport Beach Tourism BID Management District Plan Page 18
42
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.
36651. The management district plan may, but is not required to, state that an owners'
association will provide the improvements or 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.
36660. (a) Any district previously established whose term has expired, 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.
Disestablishment
36670. (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 fords 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 of real property or of businesses in the area 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
Newport Beach Tourism BID Management District Plan Page 19
43
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. (a) Upon the disestablishmcnt 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
with the revenues, or from bond reserve or construction funds, shall he 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. 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 BID Management District Plan
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44
APPENDIX 2 - LODGING BUSINESSES TO BE ASSESSED WTTHIi1N THE
NBTBID:
Newport Beach Tourism BID Management District Plan
Page 21
45
Attachment B
AMENDMENT NO. ONE TO
TOURISM BUSINESS IMPROVEMENT DISTRICT MANAGEMENT AGREEMENT
WITH VISIT NEWPORT BEACH, INC.
THIS AMENDMENT NO. ONE TO TOURISM BUSINESS IMPROVEMENT
DISTRICT MANAGEMENT AGREEMENT ( "Amendment No. One ") is made and
entered into as of this 29th day of January, 2014 ( "Effective Date "), by and between the
CITY OF NEWPORT BEACH, a Califomia municipal corporation and charter city
( "City"), and VISIT NEWPORT BEACH, INC., a California nonprofit 501(c)(6) destination
marketing organization ("VNB "), whose address is 1600 Newport Center Drive, Suite
120, Newport Beach, California 92660, and is made with reference to the following:
1:74d1ia1�:
A. On July 1, 2009, City and the Newport Beach Convention and Visitors Bureau
( "CVB") entered into an Agreement ( "Agreement ") for Tourism Business
Improvement District ("TBID ") management as the owner's association, to
administer and implement the TBID's activities and improvements ( "Project ").
B. City desires to enter into this Amendment No. One to reflect CVB's name change
to Visit Newport Beach, Inc.; update the term of the Agreement to December 31,
2014; acknowledge the renewal of the TBID and incorporate the new
management district plan; increase the TBID assessment to three percent (3 %);
amend the late payment penalties and interest provisions; update the termination
provisions; and update the City's noticing information.
C. City and VNB mutually desire to amend the Agreement, as provided below
NOW, THEREFORE, it is mutually agreed by and between the undersigned
parties as follows:
TERM
Section 1 of the Agreement is amended in its entirety and replaced with the
following: "The term of this Agreement shall commence on the Effective Date, and shall
terminate on December 31, 2024, unless terminated earlier as set forth herein."
2. RENEWAL OF THE NEWPORT BEACH TOURISM BUSINESS
IMPROVEMENT DISTRICT
Resolution 2014 -6 was adopted on January 28, 2014, by the City Council of the
City, upon the petition of the business owners in the proposed district who will pay more
than fifty percent (50 %) of the assessment proposed to be levied, which renewed the
TBID pursuant to the Property and Business Improvement District Law of 1994
contained in Streets and Highways Code Sections 36600 -36671 ( 1994 Law."). On
January 28, 2014, the City Council of the City adopted Resolution 2014 -7 adopting the
management district plan ( "MDP ") for the renewed TBID. The MDP is attached hereto
as Exhibit A and incorporated herein by this reference (hereinafter the "Plan "). Exhibit A
46
shall supersede and replace the Exhibit A to the Agreement on the Effective Date of this
Amendment No. One.
3. ASSESSMENT AND COLLECTION
Section 5.1 of the Agreement is amended in part to reflect the TBID assessment
as three percent (3 %) of gross short term (stays of thirty (30) days or less) room rental
revenue.
Section 5.3 of the Agreement is amended in part to reflect the Total Assessment
of thirteen percent (13 %) due to the increase in the Tourism BID Assessment to three
percent (3 %).
4. LATE PAYMENT PENALTIES AND INTEREST
Section 8 of the Agreement is amended in its entirety and replaced with the
following:
"8.1 Any assessed business which fails to remit any assessment within the
time required shall pay a penalties and interest in the amounts specified in the Plan
attached hereto as Exhibit A.
8.2 Should a member's assessment become twelve (12) months in arrears, it
may be sent to collections. Penalties, interest and the cost of collection shall become
part of the assessment required to be paid.
8.3 Late payments, penalties and interest shall be deposited and used in the
same manner as the basic assessment. The cost of collection, if any, shall be used to
pay the collections agency."
5. TERMINATION
Section 18.1 of the Agreement is amended in part to reflect that either party may
terminate this Agreement by providing the other party one hundred and eighty (180)
calendar days written notice prior to the effective date of termination.
6. NOTICES
Section.26 of the Agreement is amended in its entirety and replaced with the
following: "Any notice, demand, request, consent, approval, or communication that
either Party desires or is required to give to the other Party or to any other person shall
be in writing and either served personally or sent by pre -paid, first -class mail. Any
notice, demand, request, consent, approval, or communication that either Party desires
or is required to give to the other Party shall be addressed as follows:
If to VNB: Visit Newport Beach Inc.
Attn: President & CEO
1600 Newport Center Drive, Suite 120
Visit Newport Beach, Inc. Page 2
47
Newport Beach, CA 92660 -6210
If to City: City of Newport Beach
Attn: City Manager
100 Civic Center Drive
P.O. Box 1768
Newport Beach, CA 92658
With a copy to: City of Newport Beach
Attn: Finance Director
100 Civic Center Dr.
P.O. Box 1768
Newport Beach, CA 92658
Either Party may change its address by notifying the other Party of the change of
address. Notice shall be deemed given within three (3) days after the date of mailing, if
mailed as provided in this Section."
7. INTEGRATED CONTRACT
Except as expressly modified herein, all other provisions, terms, and covenants
set forth in the Agreement shall remain unchanged and shall be in full force and effect.
[SIGNATURES NEXT PAGE]
Visit Newport Beach, Inc. Page 3
48
IN WITNESS WHEREOF, the parties have caused this Amendment No. One to
be executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: ( /2. 3,11 �
By: ^� C
Aaron C. Harp
City Attorney f V
ATTEST:
Date:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
Rush N. Hill, II
Mayor
VNB: VISIT NEWPORT BEACH, INC., a
California nonprofit 501(c)(6) destination
marketing organization
Date:
Bv:
Gary Sherwin
President & CEO
Date:
By:
Leslie Swain
Chief Financial Officer
[END OF SIGNATURES]
Attachments: Exhibit A — Management District Plan
Visit Newport Beach, Inc.
Page 4
49
December io, 209
VISIT ew OYt
�r
EACH
ah _ _ _
MANAGEMENT
DISTRICT PLAN
2014-2024
l' I V ORT EACH
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 ....................................
............................... 9
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 .................................................................
............................... 24
Prepared by
C I V I T A S
Civitas Advisors Inc.
(800)999 -7781
www.civitasadvisors.com
51
L ON'ER \rIEXf'
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. The NBTBID is now
approaching the end of its original five -year term and the member businesses wish to renew the
NBTBID for an additional ten (10) years.
Location: The City of Newport Beach. The NBTBID includes eight (8) lodging businesses
located within the boundaries of the City of Newport Beach.
The NBTBID shall include the Fairmont Newport Beach, the Hyatt Regency
Newport Beach, the Newport Beach Marriott Bayview, the Newport Beach Marriott
Hotel & Spa, the Radisson Newport Beach, the Balboa Bay Club and Resort (a.k.a.,
Balboa Bay Resort), the Newport Dunes Waterfront Resort and Marina, The Island
Hotel Newport Beach, and any other hotel and resort business that may join the
NBTBID in the future.
Additional hotels and resorts that wish to pay the assessment and receive NBTBID
services in the future may do so upon the approval of a majority of the then existing
membership of the NBTBID, and through the execution of an agreement with the
City approved by the City Council consistent with the Property and Business
Improvement District Law of 1994, Streets and Highways Code Sections 36600 et
seq., as the same may be amended from time to time.
Services: The NBTBID is designcd to provide specific benefits directly to assessed businesses
by increasing room night sales. The improvements and activities consist of 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 two and one -half million dollars ($2,500,000). 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).
Overview I Newport Beach Tourism Business Improvement District
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 tem-iinate
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.
Overview I Newport Beach Tourism Business Improvement District
53
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.
?. An Opportunity for Increasing Cin- 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 Tourism 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
W
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
Number of TlDe Operating Per Vsar their charter powers to create
ro TBIDs without a state law.
60 ... -- - - - -' -
_
so - - - --
40 -- --
e0
20 ...- --- --
10 -
1 r
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,
lodging- specific marketing
programs.
u W 5 9 r c 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 betwen TBIDs and other special benefit assessment districtt is that
funds raised are allocated to the�peivate, noff;pn2fit ro raliongoverning the &said.
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 wiiipay the assessment; and
• They provide a stable funding source for tourism promotion.
Background I Newport Beach Tourism Business Improvement District
55
IV. BOUNDARY
The NBTBID will include eight (8) 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 includcs cight (8) lodging businesses. A
complete listing of lodging businesses within the NBTBID can be found in Appendix 2.
55
Balboa Bay Club and Resort
•
NgwM1 Sq
oRr
PA Cep /C
OCEAN
UPPER
NEWPORT
BAY
aos
133
Radisson Newport Beach
•
•
Fairmont Newport Beach
73
Newport Beach Marriott Bayview
t
9
n
PO 9
Pq G
O
P�0 Island Hotel Newport Beach m
Hyatt Regency Neva or Beach o
• • • Newport Beach Marriott Hotel &
Newport Dunes Waterfront Resort & Marina
Boundary I Newport Beach Tourism Business Improvement District
IN
V. BUDGET AND SERN ICES
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.
In the initial year of the renewed term, there will be funds carried over from the NBTBID's prior
term. 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%
$2,300,000.00
Sales Administration
6.25%
$156,250.00
Contingency
1.50%
$37,500.00
City Collection
0.25%
$6,250.00
Total Annual Budget
1000/0
$2,500,000.00
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 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
busincscs;
• 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;
Budget and Services I Newport Beach Tourism Business Improvement District
57
• 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 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 activides 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
Budget and Services I Newport Beach Tourism Business Improvement District
y
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.
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 fast 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 cooferencing 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.
Budget and Services I Newport Beach Tourism Business Improvement District
59
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 -' /x %) 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 0/6) 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 two and
one -half million dollars ($2,500,000) annually, or twenty-five million dollars ($25,000,000) through
the ten (10) year term. This amount may fluctuate as sales and revenue increase at assessed
businesses.
Budget and Services I Newport Beach Tourism Business Improvement District
all
%T GONTRNANCE
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 Califomia 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).
t Governance I Newport Beach Tourism Business Improvement District
61
APPENDIX I - LAW
Property And Business Improvement District Law of 1994
Cal Sts & Hy Code § 36600 (2013)
•W This document is current through the 2013 Supplement "'
(All 2012 legislation, 2012 Govemoes Reorg. Plan No. 2 and all
propositions approved by the electorate at the June and November 2012 elections)
§ 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
The Legislature finds and declares all of the following.
(a) Businesses located and operating within the business districts 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 the business districts of its cities 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 cities to fund business related improvements,
maintenance, and activities through the levy of assessments upon the businesses or real property that
benefits from those improvements.
(d) Assessments levied for the purpose of providing improvements and promoting activities
that benefit real property or businesses are not taxes for the general benefit of a city, but are
assessments for the improvements and activities which confer special benefits upon the real
property or businesses for which the improvements and activities arc provided.
§ 36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize
cities to levy assessments within a business improvement area. 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)).
Appendix 1— Law I Newport Beach Tourism Business Improvement District
62
S 36603.5. Part prevails over conflicting provisions
Any provision in this part that conflicts with any other provision of law shall prevail over the
other provision of law.
§ 36604. Severability
This pan 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.
§ 36605. [Section repealed 2001.]
§ 36606. "Assessment"
"Assessment" means a levy for the purpose of acquiring, constructing, installing, or maintaining
improvements and promoting activities which will benefit the properties or businesses located
within a property and business improvement district.
536607. "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 S of Ditiaon 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.
§ 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.
Appendix 1 — Law ( Newport Beach Tourism Business Improvement District
K
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets.
(j) Facilities of equipment, or both, to enhance security of persons and property within the area.
(k) Ramps, sidewalks, plazas, and pedestrian malls.
(l) Rehabilitation or removal of existing structures.
§ 36611. "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.
§ 36612. "Property"
"Property" means real property situated within a district.
§ 36613. "Activities"
"Activities" means, but is not limited to, all of the following:
(a) Promotion of public events which benefit businesses or real property in the district.
(b) Furnishing of music in any public place within the district.
(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.
(0 Activities which benefit businesses and real property located in the district.
§ 36614. "Management district plan "; "Plan"
"Management district plan" or "plan" means a proposal as defined in Section 36622.
§ 36614.5. "Owners' association"
"Owners' association" means a private nonprofit entity that is under contract with a city to
administer or implement activities and improvements 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 Parl 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 documents relating to activities of the district.
§ 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
Appendix 1 — Law I Newport Beach Tourism Business Improvement District
64
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.
§ 36616. "Tenant"
"Tenant" means an occupant pursuant to a lease of commercial space or a dwelling unit, other
than an owner.
S 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.
S 36620. Establishment of property and business improvement district
A property and business improvement district may be established as provided in this chapter.
5 36620.5. Requirement of consent of city council
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.
5 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.
MOAppendix L — Law I Newport Beach Tourism Business Improvement District
65
(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 activities and improvements, 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. 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 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 contain 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 lands and
businesses included. 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 and activities proposed for each year of operation of the district and the
maximum cost thereof. If the improvements and activities proposed for each year of operation are
the same, a description of the first year's proposed improvements and activities and a statement that
the same improvements 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 and
operations, 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.
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(t) 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.
(j) Any proposed rules and regulations to be applicable to the district.
(k) 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, including operation and
maintenance. The plan may provide that all or any class or category of real property which is exempt
by law from real property taxation may nevertheless be included within the boundaries of the district
but shall not be subject to assessment on real property.
(1) 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 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
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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
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 or 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.
S 36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish the proposed property
and business improvement district, the city council shall adopt a resolution of formation that shall
contain all of the following:
(1) A brief description of the proposed activities and improvements, 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 about whether bonds will be issued, and a
description of the exterior boundaries of the proposed district. 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 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 and activities to be provided 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 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.
(7) A finding that the property= or businesses within the area of the property and business
improvement district will be benefited by the improvements and activities funded by the
assessments proposed to be levied.
(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.
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§ 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 paragraphs (1) to (8), inclusive, of subdivision (b) of Section 36625, but
need not contain information about the preliminary resolution if none has been adopted.
5 36626.5. [Section repealed 1999.]
5 36626.6. [Section repealed 1999.1
§ 36626.7. [Section repealed 1999.]
§ 36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to
Section 36625 or Section 36626, the clerk of the city 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.
S 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 and
activities.
§136629. 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.
S 36630. Expiration of district; Creation of new district
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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 a new district
established pursuant to this part.
5 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 penalties for delinquent payment. All
delinquent payments for assessments levied pursuant to this part shall be charged interest and
penalties.
C 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 xvithin 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.
g 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.
S 36636. Modification of plan by resolution after public hearing; Adoption of resolution of
intention; Modification of improvements and activities by adoption of resolution after public
hearing
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(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 meetings and 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 meeting.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10
days before the public meeting, 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.
S 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 Nvith Section 3100), in a manner consistent with the
provisions of Section 36627.
S 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.
5 36641. [Section repealed 2001.1
S 36642. [Section repealed 2001.1
36643. [Section repealed 2001.1
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§ 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
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 and activities to be provided for that fiscal year.
(3) An estimate of the cost of providing the improvements and the 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 amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
(6) The 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.
§ 36651. Designation of owners' association to provide improvements and activities
The management district plan may, but is not required to, state that an owners' association will
provide the improvements or 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.
§ 36660. Renewal of district; Transfer or refund of remaining revenues; District term limit
(a) Any district previously established whose term has expired, 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
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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.
5 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 area 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 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.
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(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.
Appendix I — Law I Newport Beach Tourism Business Improvement District
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APPENDIX 2 - ASSESSED BUSINESSES
Business Name
Street
Ciry & State
zill
Fairmont Newport Beach
4500 MacArthur Boulevard
Newport Beach
CA
92660
Hyatt Regency Newport Beach
1107 Jamboree Road
Newport Beach
CA
92660
Newport Beach Marriott
500 Bayview Circle
Newport Beach
CA
92660
Bayview
Newport Beach Marriott Hotel
& Spa
900 Newport Center Drive
Newport Beach
CA
92660
Radisson Newport Beach
4545 MacArthur Boulevard
Newport Beach
CA
92660
Balboa Bay Club and Resort
1221 West Coast Highway
Newport Beach
CA
92663
The Island Newport Beach
690 Newport Center Drive
Newport Beach
CA
92660
Newport Dunes Waterfront
1131 Back Bay Drive
Newport Beach
CA
92660
Resort & Marina
Appendix 2 — Assessed Businesses I Newport Beach Tourism Business Improvement
District
75