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Hotel Owners in Oceanside, California Push for Plan to Impose New Tax
on Themselves; Goal is to Puts Heads in Beds

By Ray Huard, North County Times, Escondido, Calif.McClatchy-Tribune Regional News

Jan. 6, 2010--A plan by Oceanside's hotel owners to impose a new tax on themselves to promote the city to tourists won a hearty endorsement Tuesday from the city's Economic Development Commission.

"This is self-funded by those who benefit directly, so it should be a no-brainer," Commissioner Tom Nunan said.

The plan calls for the city to form a citywide tourism marketing district. It would require owners of hotels with 30 or more rooms and vacation rental properties subject to the city's transient occupancy tax to pay 1.5 percent of their gross revenue to the city.

In turn, the city would give most of that money to a newly created nonprofit agency called Visit Oceanside to develop and run a marketing program aimed at bringing more tourists to Oceanside.

The nonprofit agency would be run by a board of 13 to 17 members chosen from among Oceanside business leaders with an interest in tourism.

"They're going to manage their own destiny," said Economic & Community Development Director Jane McVey. "It's admirable that the business community recognizes that they're all going to benefit if they all work together."

The proposal is slated to go to the City Council for review Jan. 20 with the hope of implementing the program by April 1, said McVey.

"Basically, the whole goal is to put heads in beds," said Commissioner Jim Schroder. "It's creating jobs."

City officials have identified 18 hotels and motels that would pay the fee. Smaller motels and hotels also could contribute, but they wouldn't have to do so, McVey said. She said there are also more than 300 vacation rentals that could be subject to the tourism marketing fee.

The new fee would be separate from the 10 percent transient occupancy tax the city already collects on hotel, motel and vacation rentals, which raises about $3 million annually for the city's general fund. The general fund pays for day-to-day city operations.

The transient occupancy tax was originally meant to be used to promote the city; but most cities, including Oceanside, have relied on it to help balance their general fund budgets, Schroder said. The new fee would be used exclusively for marketing, with Visit Oceanside determining how the money is spent.

"It's really an exciting opportunity for the travel industry and for the city, because when we increase tourism we increase tax dollars," said Leslee Gaul, director of the California Welcome Center Oceanside.

Besides giving city tourist businesses a solid base of funding, the proposed tourist marketing district will save the city money, McVey said.

The City Council this year approved spending $246,000 to help run the Welcome Center, a tourism information organization affiliated with the Oceanside Chamber of Commerce.

If the tourism marketing district is approved, the Welcome Center's request for funding from the city would drop to $108,000 next year, McVey said.

Visit Oceanside would take over the city's contract with the San Diego North Convention and Visitors Bureau, saving the city $25,000. The city also would collect $10,000 annually from Visit Oceanside to cover administrative costs associated with collecting the fee, McVey said.

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To see more of the North County Times, or to subscribe to the newspaper, go to http://www.nctimes.com.

Copyright (c) 2010, North County Times, Escondido, Calif.

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