Final Presentation of Final Report to Council, August 15, 2017 — original pdf

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VISITOR IMPACT TASK FORCEFinal Report Briefingchair: James Russellvice-chair: MariBenRamseyPresentation to Austin City CouncilAugust 15, 2017http://www.austintexas.gov/content/visitor-impact-task-forceOverviewAustin City Council resolution No. 20160818-075, adopted August 201613 meetings held in 4 locationsMeetings held from December 12, 2016 –May 23, 201741 hours of public meeting time192+ staff hours at meetings; many more hours of attendee timeThe Visitor Impact Task Force (VITF) was subject to the provisions of the Texas OpenMeetings ActAll meetings were open to the public and included opportunities for publiccomment.VITF Final Report Briefing2Scope of Work per Council Resolution Study the impact of tourism on City infrastructure, services, and facilities, andinvestigate opportunities to offset those impacts.by using Hotel Occupancy Taxrevenues;Review of current uses of Hotel Occupancy Taxes and the impact of those activitiesand expenditures on tourism in the City;Review of current tourist activity in the City of Austin and what events, venues, orfacilities those tourists attend while visiting;Review of State and National best practices for tourism programs;Review of Texas Tax Code Chapter 351 and allowable uses of Hotel Occupancy Taxesunder the Tax Code including parks, historic preservation, cultural heritage, music,arts, special events, fee waivers, convention, visitors bureau, transportation,downtown districts, venues and other facilities and debt defeasance for city-ownedhotels and convention facilities;Review the Austin Convention Center expansion, all possible design options andpotential funding mechanisms; andMake recommendations to the City Council about how to best utilize all hoteloccupancy revenue to impact tourism.VITF Final Report Briefing3VITF –Meetings and InputCollected public input via:In-Person at scheduled VITF meetings –13 meetingsOnline speakupAustin! discussion forum –78 responses from 28 participantsEmailVITF resource websitewww.austinexas.gov/content/visitor-impact-task-forceVITF Final Report Briefing4Hotel Occupancy Tax Legal FrameworkChapter 351 of Texas Tax Code7% AssessmentUsed only to promote tourism and the convention and hotel industryFurther limited to the following allowable uses applicable to Austin–Convention Center–Advertising and promotional programs to attract tourists and convention delegates–Cultural Arts –up to 15%–Historic Preservation –up to 15%–Signage directing public to sights frequented by hotel guests–Transportation system for touristsAdditional 2% Assessment for Eligible Central Municipalities applicable to Austin–Expansion of an existing convention centerRevenue derived from this Chapter may not be used for general revenue purposes or generalgovernmental operations of a municipality.Chapter 334 of Texas Local Government Code2% Voter-approved venue–Current venue used for previous convention center expansion and a portion of Waller Creek TunnelVITF Final Report Briefing5Final Recommendation CategoriesOverarching RecommendationsEquitable consideration for HOT uses/recipientsConsideration of sustainable practicesExpansion of the Convention Center with several conditions/directivesArts / Commercial MusicHistoric PreservationVisit Austin (Tourism Promotion)Short-term RentalsWelcome CentersVITF Final Report Briefing6Overarching RecommendationsEquitable consideration for HOT uses/recipientsWith regard to all uses of the Hotel Occupancy Tax, equity should beconsidered and funding should be inclusive and reflect the diversity of thiscommunity, with inclusive consideration for under-served areas and under-represented communitiesConsideration of sustainable practicesSustainability practices should be considered in the expansion of theConvention Center so that community values and input are included in theprocess and into practiceVITF Final Report Briefing7Convention Center Expansion, IF:Expand the Austin Convention Center (ACC), in accordance with all of these parameters:Utilize financing concept 2b “+”–increasing the Ch. 351 Hotel Occupancy Tax (HOT) by 2%, and–retiring the current debt as soon as possible (estimated in the year 2021)Seek land acquisition through a long-term ground lease, or some otherdevelopment agreement–providing for the land and any additional development (including restaurant/retail,housing, office, space) to remain on the tax rollInvolve the Design Commission and the community in ongoing conversations aboutthe design of the expansionInclude additional allowable area improvements that are important to thecommunity, such as:–Palm School,–Waller Creek (in conjunction with the Waller Creek Conservancy),–Mexican-American Cultural Center,–Red River Cultural District,–nearby historic landmarks, etc.Include in the Bond Covenant Flow of Funds direction that excess funds remainingafter debt service, convention center operations and capital funding be utilized for:–commercial music,–historic preservation,–other allowable uses as funds are availableVITF Final Report Briefing8Arts / Commercial MusicConsider the following for the Economic Development Department’s Cultural Arts Division grantprogram:Marketing/Access/Outreach–Website -Grants Funding page(s) more user friendly–Enhanced Community Outreach -Dedicated outreach events to under-served communities–Marketing -Increased visibility in under-served community via targeted outreach campaignConsider the following for use of a portion of the additional funding allocated to commercial musicfrom the convention center expansion funding:Establish administration of the Commercial Music funding program by an independent andtransparent organization (e.g. Austin Community Foundation) with an advisory board that makethe decisions on the grants.–Advisory Board should be composed of a broad and inclusive set of stakeholders representing avariety of commercial music and tourism interests.Grant Funding–Artist-as-Entrepreneur (Core Funding) -Funding preference to ideas and plans that stimulate growth,and develop tourism opportunities in under-served communities.–Specific funding to expand and develop individual artists that are building successful arts ventureswith a history of growth.–Artists’ receiving funding in Growth and Expansion phases must become mentors.–Each funding level can only be received once per artist.VITF Final Report Briefing9Historic PreservationHistoric Preservation Activities should be amended as follows:Transfer administration of the Historic Preservation program from the ACVB to anon-profit (e.g. Austin Community Foundation) or City department with an advisoryboard that make the decisions on the grants.–Advisory Board should be composed of a broad and inclusive set of stakeholdersrepresenting a variety of historic preservation, cultural heritage, and tourism interests.–Look to other grant programs as a model, including▫Texas Historical Commission’s Texas Preservation Trust Fund (TPTF), and▫History Colorado’s State Historical Fund (SHF)With expansion, maintain percentage funding levels from HOT revenues (based on7 percent assessment) for the Cultural Arts grant program and Austin Conventionand Visitors Bureau (ACVB/Visit Austin) Tourism Promotion Fund.Revise eligibility and grant administration guidelines while retaining consistencywith State law and City Code.Establish percentage of revenue from HOT associated with the expansion of theAustin Convention Center (ACC) (plan 2b) or from a Tourism Public ImprovementDistrict (TPID) to be dedicated to Historic Preservation.–Prior to any expansion of the HOT tax due to ACC or TPID, continue to allocate $1.5million to a Historic Preservation from Tourism Promotion Fund.▫Once expansion and/or TPID approved, funds would come from sources related toeither one of those.VITF Final Report Briefing10Visit Austin (Tourism Promotion)Visit Austin (formerly Austin Convention and Visitors Bureau (ACVB))Establish a Marketing Advisory Committee that would meet quarterly andinclude local small business groups (i.e. Red River Cultural District and AustinIndependent Business Alliance (AIBA)), arts and cultural organizations, under-represented community stakeholders, and other impacted stakeholders toadvise and collaborate with Visit Austin on tourism marketing plans anddiversity tourism.Visit Austin should continue to support the areas of cultural, heritage, livemusic and local business and develop marketing efforts to support robusttourism plans in each of those areas.VITF Final Report Briefing11Short-term RentalsShort-term Rental Tax CollectionThe City Council should direct City staff to establish a mechanism to collectHOT directly from online marketplaces where transactions occur.VITF Final Report Briefing12Welcome CentersWelcome CentersWithin the expansion bonding capacity, determine if there is a possibility toprovide funding (estimated at $5 million) for a Welcome Center located in ZilkerPark near Barton Springs Pool other qualifying tourist destination areas thatpromote tourism and the convention and hotel industry.In future years, as additional annual funding available to commercial musicand historic preservation through the convention center expansion financingflow of funds increases and the amount available for commercial musicreaches the 15% maximum, consideration should be given to allocating aportion of the excess funding available for historic preservation to costsassociated with welcome centers located on City-owned property.VITF Final Report Briefing13Impact to City’s economy, taxpayer, and general fundBased on the information provided to the Task Force, the recommendations will result in:A positive impact to the local economy, as well as all recipients of the local taxcontributions, including the City’s general fund (estimated up to $6.4 in the fistyear*).–Through additional annual funding for historic preservation projects for Parks andRecreation Department (PARD) assets, the transfer of general fund dollars to thoseproject funds is reduced, providing for other general fund services to utilize those funds(depending on allocation to PARD assets, estimated up to $3.2 million in the first year*).–Through the identification of additional funding for promotion of commercial music and musicians, a key initiative of City Council, efforts to address certain challenges facing local musicians will be funded through hotel occupancy tax, as opposed to general fund dollars (estimated at $3.2 million in the first year*).Through the creation of a TPID with agreed-upon funds provided to the City, certaincosts typically covered by the general fund will also be alternately funded.The combined effect of the Task Force recommendations provides for thecontinued success of the ACC and Visit Austin, maintains the funding for the City’swell-established Cultural Arts grant program, and allows for the additional fundingfor commercial music and historic preservation.For these reasons, the Task Force encourages the City Council to move forward with all ofthe recommendations as outlined.*Based on current projections representing the first year after current debt pay-off/new debt issuance, as depicted in theillustration of financing concept 2b.VITF Final Report Briefing14Funding IllustrationsCurrent HOT Assessment and Allocation Assessment = 7% Chapter 351 + 2% Chapter 334 = 9% Combined City HOT AssessmentAllocation = 4.5 Convention Center + 2 Venue + 1.45 Tourism and Promotion + 1.05 Cultural Arts = 9VITF Final Report Briefing15Funding IllustrationsInitial HOT Assessment and Allocation with ExpansionAssessment = 7% Chapter 351 + 2% Chapter 334 + 2% Additional Chapter 351 = 11% Combined City HOT AssessmentAllocation = 4.5 Convention Center + 2 Venue + 1.45 Tourism and Promotion + 1.05 Cultural Arts + 2 Additional Chapter 351 = 1116* Estimate is based on a single year’s projections and will increase as HOT revenue in total grows over time.** Maximum percentage for Commercial Music is limited to 15% of 2, since 15% of 7 is allocated to Cultural Arts*** Maximum percentage for Historic Preservation can be 15% of the total Ch. 351 Assessment, and the dollar amount is expected to increase as HOT revenue in total grows over time. VITF Final Report BriefingFunding IllustrationsSubsequent HOT Assessment and Allocation with Expansion (after venue retirement)Assessment = 7% Chapter 351 + 2% Additional Ch. 351 = 9% Combined City HOT AssessmentAllocation = 4.5 Convention Center + 2 Expansion + 1.45 Tourism and Promotion + 1.05 Cultural Arts = 917* Estimate is based on a single year’s projections and will increase as HOT revenue in total grows over time.** Maximum percentage for Commercial Music is limited to 15% of 2, since 15% of 7 is allocated to Cultural Arts*** Maximum percentage for Historic Preservation can be 15% of the total Ch. 351 Assessment, and the dollar amount is expected to increase as HOT revenue in total grows over time. VITF Final Report BriefingThe Task Force members appreciate the opportunity to serve our community and produce this report for the Council.VITF Final Report Briefing18Questions, Comments, and FeedbackVITF Final Report Briefing19