Hoteliers in Chula Vista Petition to End Special Tax

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    NEWSLETTERS

    Here’s a question about a self-imposed tax: How hard is it to un-impose?

    Representatives of 12 Chula Vista motels are petitioning the city to dissolve the special tax district aimed at promoting tourism to the South Bay after taking issue with how the funds are being spent.

    In 2009, a majority of motel and hotel owners agreed to self-assess a 2.5 percent tax on room rates “to help fund marketing and sales promotion efforts for Chula Vista lodging businesses.”

    A recent financial review of the tourism marketing district found the money was mostly paying salaries and benefits of Chamber of Commerce staff.

    That discovery angered many of the hotel and motel owners who were collecting funds and paying out the special tax on room rates in hopes of bringing in more guests through marketing.

    A San Diego County Grand Jury investigation released in May took issue with the accounting methods of the special district and with marketing efforts that were concentrated mostly locally.
    Specifically, the grand jury report noted:

    “Most of the TMD marketing efforts to date have promoted spending locally in two local publications – The Star News and My Hometown Chula Vista. The Grand Jury does not believe these advertisements are narrowly tailored to increase lodging occupancy.”

    Today, a group of Chula Vista motel representatives who together pay more than 50 percent of the assessments are asking the city to dissolve the special tax district, which draws in more than $400,000 annually.

    Apparently, these special tax districts are easier to set-up than dissolve. City officials set a higher bar of verification on the petitioners than they originally required for the 2009 vote in favor of the district.

    City leaders have also set forth a lengthy and bureaucratic series of steps that must be taken before the dissolution is complete with a timeline that stretches into early November - all the while continuing to collect the funds.

    Director of Finance Maria Kachadoorian sent a memo to City Manager Jim Sandoval on Thursday verifying the petitioners are valid representatives and current on their dues, provisions that weren’t required when the tax was first implemented.

    Palomar Inn owner Raj Jaiswal said he received a phone call the very next day after the 2009 vote to establish the district. He said he was told to start collecting the funds immediately. He’s frustrated dissolution of the district will take so long.

    “This is a waste of tax dollars and manipulating tax dollars for their own special interests and that’s not right,” Jaiswal said. “The mayor and city used motel owners to pay the Chamber staff because the city no longer had the funds to pay. Now they want to delay ending it when we’ve already voted to do so.”

    Tourism marketing districts, such as the one in Chula Vista, are designed to put “heads in beds,” according to Chula Vista Chamber of Commerce CEO Lisa Cohen.

    Cohen said several months ago that the tourism marketing district was still in its early stages and that the efforts of the Chamber overlap with the goals of the tourism marketing district. She could not yet be reached for comment early Friday.

    At least two council members say they plan to try to expedite the process of dissolving the district. The council is set to vote Sept. 11 on a resolution of intent to "disestablish" the Chula Vista Tourism & Marketing District.  The meeting begins at 10 a.m. at City Hall, 276 Fourth Avenue.

    For Chula Vista hotel and motel guests, it may mean a 2.5 percent decrease in room rates, effective Oct. 17.

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