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111. BACKGROUND <br /> TMDs are an evolution of the traditional Business Improvement District. The first TMD was <br /> formed in West Hollywood, California in 1989. Since then, more than eighty California destinations <br /> have followed suit. In recent years, other states have begun adopting the California model - <br /> Washington, Montana, and Texas have adopted TMD laws. Several other states are in the process <br /> of adopting their own legislation. And, some cities, like Portland, Oregon, have utilized their charter <br /> powers to create TMDs without <br /> Number of nos Operating Per Year a state la*. <br /> 83 <br /> so <br /> Clifornia's TMDs collectively <br /> till raise more than $150 million for <br /> local destination marketing. <br /> With competitors raising their budgets, and increasing rivalry <br /> for visitor dollars,it is important <br /> ' that the invest est in lodge, <br /> businesses invest in stable, <br /> 30 - lodging-specific marketing <br /> zo _ programs. <br /> io ' ' ' ' TMDs utilize the efficiencies of <br /> ° a g v ' 1111111111 I II I private sector operation in the <br /> market-based promotion of <br /> ® g s W s S $ w tourism districts. TMDs allow <br /> lodging business owners to organize their efforts to increase room night sales. Lodging business <br /> owners within the TMD pay an assessment and those funds are used to provide services that <br /> increase room night sales. <br /> In California, TMDs are formed pursuant to the Property and Business Improvement District Law <br /> of 1994. This law allows for the creation of a benefit assessment district to raise funds within a <br /> specific geographic area. The key difference between TMDs and other benefit assessment districts is that funds <br /> raised are returned to the private non-p fit corporation governing the district. <br /> There are many benefits to TMDs: <br /> o Funds must be spent on services and improvements that provide a specific benefit only to those <br /> who pay; <br /> o Funds cannot be diverted to general government programs; <br /> o They are customized to fit the needs of payors in each destination; <br /> o They allow for a wide range of services; <br /> o They are designed, created and governed by those who will pay the assessment;and <br /> o They provide a stable, long-term funding source for tourism promotion. <br /> Management District Plan 6 <br /> December 15, 2014 <br />