The Garden Grove Tourism Improvement District (“GGTID”) was established by the Garden Grove City Council in accordance with the Parking and Business Improvement Area Law of 1989, California Streets and Highways Code Section 36500 et seq., (the “Law”) through the adoption of Resolution No. 9009-10 on August 24, 2010, and Ordinance No. 2782 on October 26, 2010.  The purpose of the GGTID is to provide revenue to defray the costs of advertising and marketing efforts designed to increase overnight stays, construction and maintenance of improvements, and other services, activities and programs that promote and encourage tourism within the GGTID, which benefit the operators of hotels paying assessments through the promotion of scenic, recreational, cultural and other attractions.

The GGTID includes the hotels along Harbor Boulevard from the boundary with Anaheim to Garden Grove Boulevard, and is divided into two (2) separate benefit zones:

1. Tier I includes the hotels north of Lampson Avenue that are subject to an assessment of up to two and one-half percent (2.5%) of gross rent charged per room occupancy per night.  There are currently nine (9) hotels in Tier I.
2. Tier II encompasses those hotels south of Lampson Avenue that are subject to an assessment of up to one-half percent (0.5%) of gross rent charged per room occupancy per night.  There is currently one hotel in Tier II, The Great Wolf Lodge Southern California.

Pursuant to the Law and the Ordinance, the City Council is required to re-levy the GGTID assessment annually, based on the recommendations set forth in the annual report of the GGTID Advisory Board.  At its meeting on June 12, 2018, the City Council received the Annual Report for FY 2018/19 from the GGTID Advisory Board and adopted a Resolution approving the annual report, declaring its intention to levy and collect an annual assessment for FY 2018/19, and setting a Public Hearing on June 26, 2018, for the annual report and proposed assessment.

The GGTID Advisory Board annual report for FY 2018/19 contains a proposed budget for use of the anticipated assessment revenues for the year and proposes no changes (i) to the boundaries of the GGTID, (ii) in the GGTID improvements and activities authorized by Resolution No. 9009-10 and Ordinance No. 2782, or (iii) in the amount of the annual assessment or the method and basis for the levying the assessment.  The GGTID Advisory Board is recommending that the annual assessments for FY 2018-19 continue to be two and one-half percent (2.5%) of the gross rent charged by the operator per room per night for all transient occupancy for each visitor accommodation facility in Tier I and (ii) one-half percent (0.5%) of the gross rent charged by the operator per room per night for all transient occupancy for each visitor accommodation facility in Tier II. On February 22, 2011, the City Council approved an agreement with the Anaheim/Orange County Visitor & Convention Bureau (“VCB”), pursuant to which, approximately 80% of the GGTID assessment revenue collected is allocated to the VCB to fund collective tourism marketing efforts or retained by the City for future Harbor Boulevard median improvements and a future transit system.

The remaining (approximately 20%) of the GGTID assessment would be allocated to fund specific improvements along Harbor Boulevard and other tourism promotion activities in Garden Grove in accordance with the budget included in the annual report.  These funds are administered by the Garden Grove Tourism Promotion Corporation ("GGTPC") pursuant to an agreement with the Garden Grove Tourism Promotion Corporation approved by the City Council on September 27, 2011. Before the annual assessment can actually be levied on the affected visitor accommodation facilities for the next fiscal year, the City Council must conduct a Public Hearing to hear and consider all protests against the levying of proposed assessments for FY 2018/19 and/or other matters provided in the annual report submitted by the GGTID Advisory Board. Notice of the Public Hearing in the form of the Resolution of Intention adopted at the June 12, 2018, meeting was published eleven (11) days before the hearing and mailed to each visitor accommodation facility subject to the proposed assessment in accordance with the Law.

After conducting the Public Hearing, the City Council may take one of the following actions:

1. Terminate proceedings if written protests are received from the owners of the businesses in the GGTID that will pay fifty percent (50%) or more of the assessments proposed to be levied (a “majority protest”).  If a majority protest is received, no further proceedings to levy the proposed assessment may be taken for a period of one (1) year from the date of the finding of a majority protest by the City Council.  If the majority protest is against the furnishing of a specified type or types of improvement or activity within the area, those types of improvements or activities must be eliminated.
2. Order changes in any of the matters provided in the annual report, including changes in the proposed assessments and/or the proposed improvements and activities to be funded with the revenues derived from the levy of assessments.  If changes are ordered, a notice for a new Public Hearing will be required before the City Council could adopt a Resolution confirming the annual report as modified and levying the assessment.
3. Adopt the proposed Resolution confirming the annual report as originally submitted and levying the assessment on those visitor accommodation facilities within the boundaries of the GGTID for the 2018/19 Fiscal Year, commencing July 1, 2018, and continuing through June 30, 2019.

It is not anticipated that the City will incur significant direct costs as a result of this action.  It is estimated that the GGTID will produce approximately  $3.43 million in annual revenues, and approximately $382,494 in carry over for  FY 2018/19 for local tourism promotion efforts, and most of these funds will be administered by the VCB and the GGTPC.  Any actual administrative costs incurred by the City in relation to the GGTID will be reimbursed through assessment revenues, up to a percentage cap of assessments collected.

It is recommended that the City Council:

• Conduct a Public Hearing for the proposed annual levy of assessment and other matters provided in the annual report submitted by the GGTID Advisory Board;

• Receive the report from the City Clerk regarding protests received; and

• Assuming that there is no majority protest, adopt the Resolution confirming the Garden Grove Tourism Improvement District Advisory Board Report, and levying the assessment for the Garden Grove Tourism Improvement District for Fiscal Year 2018/19.

By: Grace Lee, Sr Economic Development Specialist