Bed tax windfall bodes well for BID

The Laguna Beach Visitors Bureau and other art and cultural groups that attract tourists got a whopping windfall this fiscal year.

Revenue of almost $1.8 million earmarked for Business Improvement District participants exceeded expectations by $100,000. BID funds are derived from an assessment on the transient occupancy tax, commonly called the bed tax, levied by the city on local motels and hotels.

Beneficiaries include the Laguna Beach Conference & Visitors Bureau, the Laguna College of Art & Design, Laguna Playhouse, Laguna Art Museum, city Arts Commission programs and City Council grants to community arts organizations.

“I notice that the Visitors Bureau [allocation] went up $62,500, and others went up by $10,000,” Councilman Kelly Boyd said. “I would like to see if sooner or later they could throw a carrot to the Chamber of Commerce.”

The bureau will receive a total of $875,000 to publicize the city from fiscal year 2007-08 district revenue. Other organizations and programs will be allocated $175,000 each.

Not surprisingly, the City Council voted unanimously Tuesday to continue the district for another year. However, with the current economy, staff is reluctant to assume the same robust level of business next year, according to the staff summary, and is estimating no increase over this year’s assessment.

All hostelries were notified of the meeting, but no opposition was reported.

The district was created in 2001 after former Mayor Paul Freeman and businessman Sam Goldstein negotiated an understanding with local hostelry owners to hike the bed taxes to fund tourist-attracting organizations. The agreement was approved by the council.

An advisory board was appointed, consisting of the mayor, mayor pro tem, the city manager and four members to be named by the Visitors Bureau. State law requires the board to report on district activities annually at a public meeting.

The boundaries of the district encompass the city limits. Within the district, each hotel — as defined by the municipal code — is obliged to pay 2% of the rent charged by the operator. The assessment is due and payable in the same manner as the transient occupancy tax, but is deposited in a separate account.

Fifty percent is allocated to the Visitors Bureau.

Thirty percent is reserved for arts organizations that meet specified standards:

 Principal place of business in Laguna Beach for a minimum of five consecutive years prior to funding by the district;

 501 (c) (3) nonprofit status;

 Professional management;

 Full-time, paid employee artists, curator and or educators;

 Property ownership or a ground lease within city limits;

 Full-time operations and programming throughout the year;

 Gross revenues of at least $850,000 excluding BID funds, verified by audited financial statements provided annually;

 Accreditation — full membership in national accrediting bodies or associations.

Ten percent of the funds go to Arts Commission activities approved by the council and the last 10 percent is for community arts organizations selected by the council.

Grants funded in 2007-08

 $25,000 each to Gallimaufry and Laguna Beach Alliance for the Arts

 $20,000 each to Laguna Beach Live! and First Thursday Art Walk

 $16,000 to Laguna Outreach Community Arts

 $15,000 to No Square Theatre

 $12,500 to Sawdust Festival

 $11,000 to the Community Concert Band

 $10,000 to the Festival of Arts

 $7,000 to CaDance

 $4,000 to Laguna Plein Air Painters Assn.

 $2,000 to My Hero Project

Fiscal year 2008-09 allocations will be made when the new fiscal year budget is approved. in June.

All approved grants require any written materials to state that “Funds for this program are provided by the lodging establishments and the City of Laguna Beach.”

BARBARA DIAMOND can be reached at (949) 494-4321 or coastlinepilot@latimes.com.