Tourism Business Improvement District (TBID)
On July 24th, 2013 the Mammoth Lakes Town Council approved the formation of the Tourism Business Improvement Business District or TBID, initially created by Mammoth Lakes Tourism (MLT)
The formation of this Business District proposes to increase the marketing budget for Mammoth Lakes by $4.7 million per year. This means increasing the marketing budget from roughly $2,000,000 to approximately $6.7 Million per year. This will effectively bring the marketing budget for Mammoth Lakes in line with competing resorts.
The TBID has a 5-year initial commitment and will have to be re-approved after it’s sunset in 2018, assuming its voters choose to vote the initiative back into place. TBID’s are voted in place by the members of their respected districts, with votes being allocated based on each voting member’s gross revenues. This said, no one entity can have more than 50% voting power even though they may have greater than 50% revenues generated for that given district.
As of the date of the Mammoth Lakes TBID’s approval, there were approximately 78 TBID’s in existence in the State of California and nearly of all the TBID’s created were re-approved after their 5-year initial term. This is attributed to the success of the TBID’s in their respective communities.
One characteristic particularly attractive to many of the prospective assessment payers is that all funds received are collected using the authority of government for collection, however the funds are not kept or used by government. Instead funds are passed through government hands and allocated directly to Mammoth Lakes Tourism… a privatized entity. Funds from the TBID are to be used strictly for the enhancement of tourism to the district paying into the TBID. In the case of the Mammoth Lakes TBID this will mean increased marketing efforts and commercial air subsidies.
Generally speaking the annual assessment will be placed on the following business types as follows:
Business Type Assessment
Lodging 1% of gross room revenue
Retail 1.5% of sales including equipment rentals
Ski Resort 2% of lift ticket sales and ski school
Retail $50K-$150K $500 per year
Restaurant $50-$150K $500 per year
Retail <$50K $50 per year
Restaurant <$50K $50 per year
Although the TBID assessment is imposed on the respective business owners, most choose to pass this expense through to their customers. While the intent of this assessment is to increase business and tourism for the district, it does have an indirect impact benefiting citizens and customers too. Because the town of Mammoth Lake’s revenue source is greatly dependent on occupancy tax (about 67%), increased tourism visits result in increased revenues to the Town of Mammoth Lakes. This translates into improved funding for snow removal, police services, streets and other essential needs.
There has been much controversy over the passing of the TBID and for this reason TBID’s are given only 5-years to prove themselves. I’m confident that with proper management and execution the TBID will drive new visitations and improve business and customer service within Mammoth Lakes.
Learn more about Mammoth Lakes, current events and real estate opportunities by visiting Matthew Lehman Real Estate. You can also view a 10 year market history on my site by visiting Market Analysis in Mammoth Lakes