Pasadena’s Economic Development and Technology Committee approved the proposal by a Steering Committee composed of hotel managers to increase by 2% the Tourism Business Improvement District assessment rate as a means to support the Rose Bowl and in, in the long run, drive more revenue to the city’s hotels and motels.
The Tourism Business Improvement District is a collection of lodging properties (inns, hotels and motels) in Pasadena that pay an assessment on individual room night stays. The assessment—a nominal fee passed onto the customer—provides funding for the Convention and Visitors Bureau which provides marketing and sales efforts to bring more visitors to the city.
In Pasadena, the Tourism Business Improvement District tax is currently 2.89% on every hotel stay. Local Tourism District collections raised in 2022 reached $3.2 million, according to Mike Ross, CEO of Pasadena Center Operating Company (PCOC).
“Our current rate is 2.89% [of room rental]. What we would like to do after a lot of discussion along with the Rose Bowl team is that we want to raise that assessment by 2% over the next two fiscal years. The 2% will go directly to the Rose Bowl stadium to help market and fund their efforts which bring events to Pasadena that generate hotel room nights and obviously economic impact,” said Ross.
“It’s no secret that the Rose Bowl over the past year, with all of their music festivals and their soccer matches, [has] done a great job and we are thrilled to work with them and we want them to continue to be strong. We need a strong Rose Bowl.”
According to Ross, the proposed increase was recommended by a Steering Committee, which includes the PCOC Board Chair and hotel general managers.
1% of the increase would be implemented in July 2023 while the additional 1% would be implemented in July 2024, for a total of 4.89% after adding in the current base assessment, Ross described.
Ross said the gradual increase in the Tourism Business Improvement District collections will assure that the city “is not placed at a competitive disadvantage to a number of other communities.”
He said the planned increase will generate $4.3-$5.1 million in its first year and $5.4- $6.4 million in year two and the succeeding years of implementation.
Aside from the increase in the Tourism Business Improvement District assessment rate, the Steering Committee is also proposing to collect Tourism Business Improvement District monies from short-term rentals (STRs). An estimated $300,000 per year will be generated by including STRs, according to Ross.
The Steering Committee has also asked for Tourism Business Improvement District to be renewed for a term of 10 years as opposed to the current five years.
Prior to voting unanimously on the matter, Members of the Committee agreed further discussion by the City Council is needed on the proposal to increase the Tourism Business Improvement District term to 10 years.
“I just feel like this is not a small change,” Vice Mayor Andy Wilson said “5 years is more reasonable given the magnitude of this change.”