TO: Board of Supervisors
FROM: Ryan J. Alsop, Chief Executive Officer
REPORT BY: Becky Craig, Assistant Chief Executive Officer
SUBJECT: Napa Valley Tourism Corporation Agreement
RECOMMENDATION
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Approve and authorize Agreement No. 250463B with Napa Valley Tourism Corporation to serve as the Owner’s Association for the Napa Valley Tourism Improvement District (NVTID) for July 2025 through June 2035. (No Fiscal Impact)
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BACKGROUND
The Napa Valley Tourism Improvement District (“NVTID”) is a benefit assessment district that funds valley-wide marketing and sales and local jurisdiction destination marketing efforts for Napa Valley lodging businesses. This approach has been successful in Napa Valley for fifteen years and in other destination areas throughout the state to improve tourism and drive additional room nights to assessed lodging businesses. The renewed NVTID includes all lodging businesses, existing and in the future, available for public occupancy located within the boundaries of the cities of American Canyon, Calistoga, Napa, and St. Helena, the Town of Yountville, and the unincorporated area of the County of Napa.
Lodging business owners requested renewal of the NVTID to continue this self-assessed revenue source devoted to marketing Napa Valley as a tourist, meeting and event destination. The NVTID is projected to generate approximately $11,000,000 annually for promotion of travel and tourism specific to Napa Valley.
Tourism Improvement Districts (TIDs) utilize the efficiencies of private sector operation in the market-based promotion of tourism. These special assessment districts allow lodging business owners to organize their efforts to increase tourism. Lodging business owners operating within the TID fund the TID, and those funds are used to provide services that are desired by and benefit the lodging businesses within the TID.
The Management District Plan (MDP) adopted by the Board of Supervisors in December 2024 extended the term of the NVTID for an additional ten years from June 2025 to June 2035. The MDP includes the proposed boundary of the District, a service plan and budget, and a proposed means of governance. All jurisdictions consented to include all lodging businesses, existing and in the future, available for public occupancy located within the boundaries of the cities of American Canyon, Calistoga, Napa, and St. Helena, the Town of Yountville, and the unincorporated area of the County of Napa. The MDP envisions the possibility of a successor destination marketing entity to the current destination marketing provider (Visit Napa Valley (VNV)) and reclassifies the VNV designated board seat on the Napa Valley Tourism Corporation (“NVTC”) as non-voting if it is filled by the VNV Executive Director.
The annual assessment rate is two percent (2%) of gross short-term (30 days or less) sleeping room rental revenue. The assessment rate may be recommended to be increased periodically by the Visit Napa Valley Board of Directors, or successor destination marketing entity, and then brought to the Napa Valley Tourism Corporation Board for final approval. The maximum increase shall be one half of one percent (0.5%) at certain intervals and the total assessment rate may not exceed three percent (3%) of gross short-term (30 days or less) sleeping room rental revenue. Based on the benefit received, assessments will not be collected on stays of more than thirty (30) consecutive days.
Each jurisdiction will collect the assessment on a basis that mirrors the collection of transient occupancy tax from each lodging business located in the NVTID boundaries. Each jurisdiction shall forward the assessments to Napa Valley Tourism Corporation, which has the responsibility of managing NVTID programs as provided in this Management District Plan. Each jurisdiction’s tax collector will retain a fee of up to one percent (1%) of the amount of the assessment collected prior to remitting funds, within their respective jurisdictions, to cover their costs of collection and administration.
The proposed County Agreement with NVTC sets forth the roles and responsibilities between the County and NVTC in accordance with the MDP. The Agreement acknowledges that NVTC contracts with VNV and is expected to contract with a destination marketing agency for some of the services required under the MDP. Additionally, it includes provisions for the local governing committees and the destination marketing agency to remit various reporting, for the non-voting status of the member seat on NVTC if filled by VNV’s Executive Director, and a requirement for NVTC to provide an annual report to the Board of Supervisors each fiscal year.
In its Resolution 24-142 adopted December 17, 2024, the Board of Supervisors made various recommendations to the NVTC regarding formation of a governance committee, bylaws changes, reallocation of assessment funds to the local governing committees, and increasing committee representation for Upvalley small hoteliers or chambers. These recommendations were not included in the Agreement as they were recommendations to NVTC. NVTC will determine whether these or other changes are warranted to effectively oversee the TID.
With the renewal of the NVTID, NVTC has approved a new agreement with Visit Napa Valley (attached) for destination marketing services.
Recommended Actions: Approve and authorize Agreement No. 250463B with the Napa Valley Tourism Corporation.
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
No |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.