The GGTID was established by the 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 in the GGTID, construction and maintenance of improvements in the GGTID, 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 within the city of Anaheim to Garden Grove Boulevard.  It is divided into two (2) separate benefit zones:

• Tier I includes the hotels north of Lampson Avenue, which are subject to an assessment of up to 2.5% of gross rent charged per room occupancy per night.  There are currently nine (9) hotels in Tier I.

• Tier II encompasses those hotels south of Lampson Avenue, which are subject to an assessment of up to 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 assessment annually, based on the recommendations set forth in the annual report of the Advisory Board.

Annual Advisory Board Report

In accordance with Ordinance No. 2782, the Board of Directors of the Garden Grove Tourism Promotion Corporation (GGTPC) serves as the Advisory Board.  Pursuant to the Ordinance and the Law, the Advisory Board is required to submit an annual report to the City.  The annual report is required to include the following:

• Any proposed changes in the boundaries of the GGTID or in any of the benefit zones;
• A description of the improvements and activities to be provided for the upcoming fiscal year;
• An estimate of the cost of providing the improvements and the activities for that fiscal year;
• The recommended method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year;
• The amount of any surplus or deficit revenues to be carried over from a  previous fiscal year; and
• The amount of any contributions to be made from sources other than the assessments levied.

The Advisory Board’s annual report serves as the basis for the levying of assessments each year.

The Advisory Board has prepared the annual report for Fiscal Year 2019-2020, which contains a proposed budget for use of the anticipated assessment revenues for the year.  No changes are proposed (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 Advisory Board is recommending that the annual assessments for Fiscal Year 2019-2020 continue to be two and one-half percent (2.5%) of the gross rent charged by the Operator per room occupancy per night for all transient occupancies 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 occupancy per night for all transient occupancies 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 GGTPC pursuant to an agreement with the GGTPC approved by the City Council on September 27, 2011.

Levying of Assessment for Fiscal Year 2019-2020

State Law requires that each year the City Council adopt a Resolution declaring its intention to levy an annual assessment for the upcoming fiscal year based on the Advisory Board’s Annual Report and scheduling a Public Hearing on the proposed assessment.  The attached proposed Resolution contains the items required by State Law and sets a Public Hearing on the matter for June 25, 2019.  After City Council adoption, the Resolution will be published in a local paper of general circulation at least seven (7) days before the Public Hearing pursuant to the Law.

At the Public Hearing scheduled for June 25, 2019, the City Council may order changes in any of the matters provided in the Advisory Board’s Annual Report, including changes in the proposed assessments, the proposed improvements and activities to be funded, and the proposed boundaries of the area.  At the conclusion of the Public Hearing, the City Council may adopt a Resolution confirming the annual report as originally filed or as changed by it.  The adoption of that Resolution shall constitute the levy of an assessment for the Fiscal Year 2019-2020.

A similar Resolution must be adopted annually by the City Council in order to continue to levy the assessment in the succeeding fiscal years.

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 $3,204,600 in new annual revenues and $267,000 in carryover for fiscal year 2019-2020 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:

• Adopt the attached Resolution approving the Garden Grove Tourism Improvement District Advisory Board Annual Report; declaring its intention to levy assessments for Fiscal Year 2019-2020 for the Garden Grove Tourism Improvement District; and setting June 25, 2019, as the time and place of the Public Hearing thereon and giving notice thereof.

By:  Greg Blodgett, Sr. Project Manager