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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 TiDs Operating Per Year a state law. <br /> 63 <br /> 80 <br /> 8o California's TMDs collectively <br /> 72 raise more than $150 million for <br /> 70 - <br /> 63 local destination marketing. <br /> so — With competitors raising their <br /> budgets, and increasing rivalry <br /> 50 --- 45 <br /> for visitor dollars,it is important <br /> 40 -- - ----- - --- 37 that the TriValley lodging <br /> 31 businesses invest in stable, <br /> 30 24 as lodging-specific marketing <br /> 20 19 programs. <br /> 12 <br /> 9 <br /> II 10 TMDs utilize the efficiencies of <br /> 0 1 (♦ I ' ' private sector operation in the <br /> ' N N N N Al Al N N N N N N N Al N ' <br /> 0 0 0 0 0 0 o a o 0 0 0 market-based promotion of <br /> ® 8 s s 8 s st s 8 $ G 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-profit corporation governing the district. <br /> There are many benefits to TMDs: <br /> • Funds must be spent on services and improvements that provide a specific benefit only to those <br /> who pay; <br /> • Funds cannot be diverted to general government programs; <br /> • They are customized to fit the needs of payors in each destination; <br /> • They allow for a wide range of services; <br /> • They are designed, created and governed by those who will pay the assessment;and <br /> • They provide a stable, long-term funding source for tourism promotion. <br /> Management District Plan 6.H,..,.N <br /> April 21, 2015 <br />