Consider Implementation of Lodging Tax and Membership with TC Gateway Visitors Bureau

The purpose of this case is to consider implementing a lodging tax and becoming a member of the Twin Cities Gateway Visitors Bureau.  Staff was approached by the Twin Cities Gateway Visitor Bureau in November of 2023.  Al Stauffacher, the Director of the Visitor Bureau, outlined the benefits of the bureau to the community and hotels. Benefits include bringing lodging to participating hotels for area events / Venues (National Sports Center, athletic tournaments, conventions), marketing attractions within the community and financial support for marketing of community events (Happy Days, Draw Concert Series).  After the meeting with Mr. Stauffacher, Staff engaged Comfort Suites and Hilton Home 2 Suites and asked them if they would have any interest in this program.  Both hotels and their management teams met with Twin Cities Gateway and after internal discussions, notified the City in July that they were both supportive of implementing a 3% lodging tax and to be a part of the Twin Cities Gateway Visitors Bureau. Once there was "buy in" from our local hotels, staff decided to bring this forward for discussion to the EDA and ultimately the City Council.  Currently, Anoka, Arden Hills, Coon Rapids, Fridley, Ham Lake, Lino Lakes, Mounds View, New Brighton and Shoreview are part of the Twin Cities Gateway Visitors Bureau. Staff reached out to the City Administrator of Lino Lakes and she was very complementary of the program and Al Stauffacher.

There is no cost to this program aside from the administration of the collection of 3% lodging fees from the hotels and forwarding them to the Twin Cities Gateway.  The City keeps 5% (estimated to be $6,900) and sends 95% of the fees collected back to the bureau to fund their operations. The 5% can be used for administration costs or wherever the City chooses.  For example, Fridley dedicates the administrative fee to tourism-related activities.  Implementation of this program involves the City adopting a resolution to approve a 3% lodging tax and simply forwarding this to the State of Minnesota to be processed. Typically, a January 1 start date is used.  The Twin Cities Gateway Visitor Bureau will help the City through this process of getting everything set up if the Council gives that direction.  The City will ultimately enter into a contract with the Twin City Gateway Visitor Bureau and this contract will include a 1 year's notice to opt out if the City no longer wishes to participate. Once the City becomes a member, they will receive an additional $5,000 grant from the Visitor Bureau to be spent on marketing and administration for local events like Happy Days, or potentially, the Draw Concert Series.  In year two, this amount is estimated to rise to approximately $18,000 annually.  A copy of the 2024 Grant Criteria is attached to this case.
 

None required

Staff wants to make it clear that this was not originally a Staff initiated idea but it has full "buy-in"" from both Hotels in Ramsey.    This opportunity was presented to the City in November of 2023 and the City simply asked its hotels if they would have interest. Both hotels are very interested and believe that it will help them with increased occupancy rates and are supportive of the 3% lodging tax being implemented for each room booked.  Both Hotels have provided a letter of support of implementing a lodging tax. Upon reviewing all the information, meeting with Al Stauffacher, discussing this with the City Administrator of Lino Lakes, and seeing support for this program by our two hotels, Staff sees the potential benefits of this program for the City, and our 2 hotels. If the City joins TC Gateway it will receive a seat on the board which will be designated by the City Council.  Al Stauffacher, Director of the Twin Cities Gateway Visitors Bureau, will be in attendance to provide an overview of the Visitors Bureau and to answer questions. Additional information can be found at Home - Twin Cities Gateway (tcgateway.com) (https://www.tcgateway.com).

There were additional questions by some EDA members at the August meeting, and a few days after, about the TC Gateway Organization and its operations.  The FAQ has been updated with answers to those questions and is attached to this case.

If the City decides it would like to join the Twin Cities Gateway it will require the adoption of an Ordinance, potential amendments to code and entering into an agreement with Twin Cities Gateway Alternatives:

1) Direct Staff to work with the City Attorney to draft documents necessary to implement a 3% Lodging Tax, bring back to the City Council for formal action, and to join the Twin Cities Gateway Visitors Bureau

2) Direct Staff to Conduct Additional Research and Provide Information to City Council

3) No Action - City Council to NOT Implement a Lodging Tax and to NOT Join the Twin Cities Gateway Visitors Bureau

4) Something Else
 

All funds are generated through a 3% lodging tax collected from Comfort Suites and Hilton Home2 Suites.

The EDA met on August 8, 2024 and passed a motion to recommend the City Council to implement a 3% Lodging Tax and to join the Twin Cities Gateway Visitors Bureau.  There were some additional questions by EDA members and the answers to those questions are included iin the FAQ attached to this case.