STRATEGIC PRIORITY: Economic Development
AGENDA DATE: August 28, 2024
COUNCIL DISTRICT(S): 1, 2, 3, 5, 6, 7, 9, 10, 11, 12, 13, 14
DEPARTMENT: Office of Economic Development
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
Dallas Tourism Public Improvement District
A public hearing to receive comments concerning: (1) the proposed levy of assessment for the Dallas Tourism Public Improvement District (the “District”), in accordance with Chapter 372, Texas Local Government Code, for the purpose of providing supplemental public services to be funded by special assessments on Dallas hotels with 100 or more rooms; and at the close of the public hearing, (2) authorize an ordinance approving and adopting the proposed and final FY 2024-25 Service Plan, the final FY 2024-25 Assessment Plan and the FY 2024-25 Assessment Roll (to be kept on file with the City Secretary), and FY 2024-25 Notice of Obligation to Pay Improvement District Assessment (to be filed with Dallas County); (3) establishing classifications for the apportionment of costs and the methods of assessing special assessments for the services and improvements to property in the District; (4) closing the hearing and levying a special assessment on Dallas hotels with 100 or more rooms for services and improvements to be provided during FY 2024-25; (5) providing for reimbursement of city administrative costs for operational oversight of the District; (6) establishing charges and liens against the property in the District and against the owners thereof; (7) providing for the collection of the FY 2024-25 assessment; (8) authorizing the receipt and deposit of assessments; (9) authorizing the disbursement of assessments and interest to Dallas Tourism Public Improvement District Corporation; and (10) providing for an effective date - Not to exceed actual collections estimated at $21,330,581.00 - Financing: Dallas Tourism Public Improvement District Fund (subject to appropriations) (see Fiscal Information)
Body
BACKGROUND
Annually, the City Council calls and holds a public hearing to consider the proposed assessment for property in the District and authorizes the Service Plan for the District. Upon adjournment of the hearing on the proposed assessments, the City Council must hear and pass on any objections to a proposed assessment and may amend a proposed assessment on any parcel. After hearing and passing on objections, the City Council by ordinance shall levy the assessment as a special assessment on Dallas hotels with 100 or more rooms. The adopted Service Plan will be filed with the Dallas County Clerk within seven days of the City Council approval pursuant to the Chapter 372, Texas Local Government Code “Act”.
As the entity with which the City contracts to manage the District, the Dallas Tourism Public Improvement District Corporation provided City staff with the proposed District Service Plan for FY 2024-25 and the proposed FY 2024-25 Assessment Plan for review, and staff found the services and improvements to be advisable and recommends approval subject to the public hearing on August 28, 2024.
The District Service Plan consists of:
(a) Nature of the Services and Improvements. The purpose of the District will continue to be to enhance services, undertake certain improvements, in particular, special supplemental services relating to District marketing, business recruitment, and promotional activities authorized by the Act for improvement and promotion of the District, including the provision of incentives by contractual agreement with VisitDallas to organizations to encourage them to bring their large and city-wide meetings to Dallas and to fund additional marketing by contractual agreement with VisitDallas to increase hotel stays within the City. The District will continue to supplement and enhance services within the area of assessment.
(b) Estimated Cost of the Services and Improvements. During the next five-year period, the estimated annual cost of the improvements and services provided by the District is expected to be $25,946,624.00 in FY 2024-25 and decrease to approximately $25,446,001.00 in FY 2028-29. The total estimated net assessments to be collected during the next five-year period is approximately $116,760,453.00. The District shall incur no bonded indebtedness.
(c) Boundaries. The boundaries of the District are located wholly within the City of Dallas, Texas. The boundaries of the District are attached to the ordinance as shown in Exhibit A and shall solely include non-contiguous hotel properties with 100 or more rooms within the City of Dallas as shown on the attached list marked Exhibit A-1.
(d) Method of Assessment. The District assessment will be levied on hotels with 100 or more rooms (“qualifying hotels”) located within the District. The proposed cost of the services and improvements to be provided shall be assessed in a manner that results in imposing equal shares of the cost of the services qualifying on hotels that are similarly benefitted. Under the Act, the apportionment of the cost of the services against property in the District territory must be made on the basis of special benefits accruing to the property because of the services and improvements provided. The total cost of the services and improvements to be provided shall be apportioned at a rate of 2 percent of room-nights sold at qualifying hotels located within the District territory until the collective total budget for the renewal period is reached. Accordingly, those qualifying hotels that sell more rooms will pay a greater portion of the assessment since those properties benefit more from the promotion and marketing services provided by the District. Rooms that are not subject to the City’s hotel occupancy tax shall not be included for the District assessment. The total assessment must be reviewed and approved annually by the Dallas City Council. The future cost of services and improvements that are budgeted in the FY 2024-25 Service Plan may be increased in amounts indicated in subsequent Service Plans, beyond the amount shown subject to an enhancement in value of property in the District and a corresponding increase in the services and improvements to be provided, and subject to the limitations on the assessment per occupied room and the aggregate amount approved in the petition.
(e) Apportionment of costs between the District and the Municipality as a Whole. The District shall continue to pay the cost of the supplemental services described in the Service Plan by assessment against the hotels with 100 or more rooms within the District, including City-owned qualifying hotels located within the District territory, such as the Omni Hotel.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On September 11, 2019, the City Council authorized an ordinance approving and adopting the District’s final 2020 Service Plan, 2019 Assessment Plan, and the 2019 Assessment Roll by Resolution No. 19-1444 and Ordinance No. 31325.
On March 25, 2020, the City Council authorized the expansion of the District boundary to include 14 additional hotels pursuant to Section 372.007 of the Act by Resolution No. 20-0520.
On September 9, 2020, the City Council authorized an ordinance approving and adopting the District’s final 2021 Service Plan, the 2020 Assessment Plan, and the 2020 Assessment Roll by Resolution No. 20-1358 and Ordinance No. 31634.
On August 25, 2021, the City Council authorized an ordinance approving and adopting the District’s final 2022 Service Plan, the 2021 Assessment Plan, and the 2021 Assessment Roll by Resolution No. 21-1415 and Ordinance No. 31972.
On June 8, 2022, the City Council authorized the expansion of the Tourism Public Improvement District boundary to include 6 additional hotels by Resolution No. 22-0897.
On August 24, 2022, the City Council authorized an ordinance approving and adopting the District’s final 2023 Service Plan, 2022 Assessment Plan and the 2022 Assessment Roll by Resolution No. 22-1257 and Ordinance No. 32278.
On May 24, 2023, the City Council authorized the expansion of the District boundary to include 2 additional hotels pursuant to Section 372.005(b-1) of the Act by Resolution No. 23-0740.
On August 23, 2023, the City Council authorized an ordinance approving and adopting the District’s final 2024 Service Plan, 2023 Assessment Plan and the 2023 Assessment Roll by Resolution No. 23-1176 and Ordinance No. 32528.
On May 22, 2024, the City Council authorized the expansion of the District boundary to include one (1) additional hotel by Resolution No. 24-0816.
The Economic Development Committee was briefed by memorandum regarding this matter on August 5, 2024. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=13223063&GUID=7979BAC0-150D-4763-BF0A-3E8FDE1D2A5F>
On August 14, 2024, the City Council authorized a public hearing to be held on August 28, 2024, to receive comments on the District’s final 2025 Service Plan, 2024 Assessment Plan and the 2024 Assessment Roll by Resolution No. 24-1078.
The City Council was briefed by memorandum regarding this matter on August 23, 2024. <https://dallascityhall.com/government/citymanager/Documents/Council%20Materials/Upcoming%20Agenda%20Items%20PH4-PH16%20Public%20Hearings%20for%20Public%20Improvement.pdf>
FISCAL INFORMATION
|
Fund |
FY 2024 |
FY 2025 |
Future Years |
|
Dallas Tourism Public Improvement District Fund |
$0.00 |
$21,330,581.00 |
$0.00 |
Cost consideration to others - For designated hotel properties, the total cost of the services and improvements to be provided shall be apportioned at a rate of 2 percent of room-nights sold at qualifying hotels located within the District territory until the collective total budget for the renewal period is reached.