Cities, counties OK new joint funding effort to promote region

[caption id="attachment_20981" align="alignleft" width="126"] Rick Swig of the Harvest Inn in St. Helena says broad support for improvement district will make the county more competitive.[/caption]

NAPA — Long-standing efforts to establish a regional destination marketing fund in Napa Valley cleared yet another procedural milestone as the county Board of Supervisors voted unanimously last week to adopt a resolution supporting the Napa Valley Tourism Improvement District.

The county board in February urged the various city councils to approve what will be known as the tourism business improvement district. Each council did so by a county-wide margin of 22 members voting in favor to only one opposing vote and two abstaining, according to Clay Gregory, chief operating officer of the Napa Valley Destination Council, which played a central role in getting the TBID to this stage and will work in conjunction with a governing board to oversee the funds generated from it.

With each city approving the TBID, a 2 percent assessment will be applied to visitors fees at hotels throughout the county. It will then be distributed into a marketing fund that will promote all of Napa Valley. Each municipality will contribute 75 percent of revenue generated from the TBID assessment to the county-wide effort, and 25 percent of such revenue will be distributed among each city for its own marketing campaigns.

Mr. Gregory said the assessment could raise as much as $4 million, thereby putting the Destination Council on par with Sonoma County, which operates a similar business improvement area with an annual budget of $3.8 million overseen by the Sonoma County Tourism Bureau.

“One of the things that was clear is that we were severely underfunded in getting our message out to the people we wanted to address,” Mr. Gregory said, noting that the Destination Council’s current annual budget of $437,000 was dwarfed by other destination areas. There are 45 similar TBIDs throughout the state.

The fact that Napa Valley has now voted in unison to support the initiative will enable it to be even more competitive, said Rick Swig, a board member of the Destination Council who owns the Harvest Inn in St. Helena and who was instrumental in forming the TBID.

Convincing each city council to approve the measure was the most difficult aspect of the nine-month effort, proponents said.

But each eventually agreed, and each stands to receive significant annual dollars for individual marketing efforts as such: American Canyon, at $23,000; Calistoga, at $125,000; Napa, at $300,000; St. Helena, at $50,000; Yountville, at $160,000; and unincorporated parts of the county at $350,000.

The impetus to enact the TBID was twofold, said Mr. Swig, who also helped San Francisco adopt a similar measure in 2008.  The economic collapse and subsequent drop in occupancy rates in Napa Valley played a role in motivating hoteliers to support the TBID, but it wasn’t the sole factor.

“I’m sure the economy and the significant reduction in business activities made it easier to get attention,” Mr. Swig said. “But there is a notion that other destinations, such as Sonoma, have done this and have poached a significant market share from Napa Valley.”

Mr. Gregory echoed such a notion, noting that despite the prestige associated with Napa Valley wines and vineyards, hoteliers and politicians alike could ill-afford to rest on the region’s laurels.

“We decided that was the only way to get funding to put us on the level with other wine destinations,” he said.

Mr. Swig also noted that public funding for tourism has dwindled significantly. “The tendency has been over the last decade to take transit occupancy taxes and apply those to core services, as opposed to recycling those funds to generate more tourism,” he said. The TBID seeks to correct that by providing private funding for marketing purposes that by law cannot be used for any other purpose.

More than 70 percent of all responding hotel and lodging owners in the county supported the TBID, according to Larry Florin of the Napa County Community and Intergovernmental Affairs office, which tabulated the petitions needed to pass the TBID. Each city needed to meet a simple majority threshold for a city council to approve, and a simple majority was needed at the county level to move forward. Mr. Swig and Mr. Gregory both said hoteliers overwhelmingly supported the initiative because everyone stands to benefit.

“They realize that it goes to supporting the branding of Napa Valley, which is their livelihood,” Mr. Swig said.

Each municipality will be required to form an oversight committee, and a countywide oversight committee will consist of eight hoteliers, a representative from each city, one person from the county and one representative from the Destination Council.

The TBID is on pace to go into effect by June 15, Mr. Florin said. The original goal by the Destination Council was to have it in place by July 1. A public meeting will be held May 25 on the matter, and a final meeting will occur on June 15.