ORDINANCE _________________

AN ORDINANCE establishing a Seattle Tourism Business Improvement Area; levying special assessments upon hotel businesses within the area; providing for the deposit of revenues in a special account and expenditures therefrom; providing for collection of and penalties for delinquencies; providing for the establishment of a Ratepayers Advisory Board, and providing for an implementation agreement with a Program Manager.

WHEREAS, RCW 35.87A authorizes the City to establish business improvement areas to provide special benefits to business and property owners within a defined geographic area through the imposition of special assessments; and

WHEREAS, RCW 35.87A.010 provides that such special assessments may be used, among other things, to provide, "the promotion of retail trade" within the defined area; and

WHEREAS, leisure tourism includes both individuals and groups traveling for pleasure, cultural enrichment, exploration and adventure; and

WHEREAS, other West Coast cities such as San Francisco, San Diego, Anaheim and Los Angeles have established dedicated funds for tourism promotion; and

WHEREAS, the State of Washington discontinued all funding for tourism promotion in its 2011-2013 Biennial Operating Budget, making Washington the only state not to appropriate any funds for such a purpose; and

WHEREAS, facing acute budgetary pressure, the City of Seattle reduced general fund support for tourism promotion in the 2011 adopted City budget; and

WHEREAS, the tourism industry is a vital and substantial component of the City's economy and tourism promotion will increase visitors to Seattle and grow the local economy; and

WHERAS, the hotel businesses located within the area and subject to sixty percent or more of the special assessments levied by this ordinance filed a petition with the City of Seattle to establish a Business Improvement Area (BIA) pursuant to RCW 35.87A, which is filed in C.F. 311423; and

WHEREAS, pursuant to RCW 35.87A.040, the City on July 25, 2011 adopted Resolution 31309 entitled "A RESOLUTION of intention to establish a Seattle Tourism Business Improvement Area and fix a date and place for a hearing thereon," and declaring its intent to establish the same; and

WHEREAS, the BIA established herein is for the purpose of providing needed resources to increase leisure tourism, which will increase hotel occupancy rates among participating hotels within the defined area and provide family-wage jobs in the hotel industry; and

WHEREAS, the promotion of Seattle to increase leisure tourism will also provide economic benefit to the retail, restaurant, entertainment and cultural industries that are closely connected to the hotel industry and critical to the health of Seattle's downtown economy; and

WHEREAS, as provided by Resolution 31309, the City Council, through its Regional Development and Sustainability Committee, held a public hearing thereon on August 8, 2011 at 5:30 p.m. in the City Council Chambers, City Hall, 600 Fourth Avenue, 2nd Floor, Seattle, Washington; and

WHEREAS, the testimony received at that hearing resulted in the Council determining that establishing a new BIA is in the best interest of the hotel businesses and hotel employees within the BIA's boundaries;

NOW, THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. Area Established. As authorized by Chapter 35.87A RCW, there is hereby established a Business Improvement Area ("BIA"), to be known as the "Seattle Tourism Improvement Area" or "STIA," within the following boundaries as shown on the map attached as Exhibit "A" (when a street or alley is named, the area boundary is the centerline of the right-of-way including vacated portions unless otherwise specified in the description):

Beginning where Puget Sound meets W. Galer Street, continuing east as if Galer Street continued to 12th Avenue, south to South Royal Brougham Way, west as if South Royal Brougham Way continued to Puget Sound, continuing along the shore of Puget Sound to W. Galer Street.

In case of a conflict between the description of the area and the map, the map shall control.

Section 2. Programs. Special Assessment revenues shall be used solely and exclusively for domestic and international tourism promotion, advertising, sales and marketing activities (including, without limitation, the creation of a standing limited reserve solely to fund any such activities that arise unexpectedly from year to year) intended to encourage leisure tourism in Seattle in order to increase area hotel occupancies and for no other purpose. Promotion, advertising, sales and marketing services include, but are not limited to, strategic planning, market research, creative development, media placement, sales activities, hosting tourism industry events relating to promotion and marketing, and administrative and management support for such services. No funds raised by the special assessment authorized by this ordinance may be used to take, support or oppose any position taken by any entity in a labor dispute.

Section 3. Levy of Special Assessments. To finance the programs authorized in Section 2, there is levied upon and shall be collected from the owners of all transient accommodations ("Ratepayers") with more than 60 rooms located within the boundaries of the Business Improvement Area described in Section 1, monthly special assessments in an amount equal to $2 per night per occupied hotel room for each such Ratepayer.

The special assessments shall not be imposed on rooms (a) where the occupant has stayed 30 or more days, (b) that are provided by a Ratepayer to guests without charge for promotional purposes, (c) that are available exclusively to members or guests of members of a private member-owned club or its reciprocal clubs or (d) that comprise facilities where accommodations are generally marketed and sold on a per bed, shared room basis (e.g. hostels).

Section 4. Rate Changes. Changes in the assessment rate shall only be made by ordinance and as authorized in RCW 35.87A.140 upon the City Council's receipt of a written request from the Program Manager submitted with the approval of the Ratepayers Advisory Board and shall not occur more than one time per year.

Section 5. Collection Schedule. Special assessments for the preceding month shall be collected on a monthly basis and shall be due on the 10th of each month. The Director of Finance and Administrative Services, or the Director's designee ("Director") may change the billing frequency by directive to an interval no less frequent than quarterly. A copy of a directive issued under this Section shall be mailed to all Ratepayers not less than 90 days before the new billing cycle is to take effect.

Section 6. Deposit of Revenues. There is in the City Treasury's Business Improvement Area Fund, a separate subaccount designated the Seattle Tourism Improvement Area Account (called "the Account"). The following monies shall be deposited in the Account:

(a) All revenues from special assessments levied under this ordinance;

(b) All income to the City from public events financed with special assessments;

(c) Gifts and donations;

(d) Interest and all other income from the investment of Account deposits;

(e) Restitution moneys for expenditures made from the Account; and

(f) Reimbursements due to the Account.

Section 7. Delinquent Payments. If an assessment has not been paid within thirty (30) days after its due date, the Director shall send a reminder notice and add a Five Dollar ($5.00) processing fee. If the assessment is not paid within sixty (60) days after its due date, a delinquency charge shall be added in the amount of ten percent (10%) of the assessment. All assessments that are not paid within sixty (60) days of the due date shall also bear interest from the due date at twelve percent (12%) per annum. The Director is authorized to refer any unpaid assessments to a collection agency or to bring an action to collect any unpaid assessments in any court of competent jurisdiction in King County.

Section 8. Notices. Notices of assessment, installment payments, or delinquency, and all other notices contemplated by this ordinance may be sent by ordinary mail or delivered by the City to the address shown on the records of the Director, and, if no address is shown there, to the address shown on the records of the County Assessor. Failure of the Ratepayer to receive any mailed notice shall not release the Ratepayer from the duty to pay the assessment and any interest and delinquency charges on the due date.

Section 9. Disputes. Any Ratepayer aggrieved by the amount of an assessment or delinquency charge may on request obtain a meeting with the Director or the Director's designee. If not satisfied, the Ratepayer may appeal the matter to the City's Hearing Examiner in the manner provided for a contested case under Chapter 3.02 of the Seattle Municipal Code. The Ratepayer has the burden of proof to show that the assessment or delinquency fee is incorrect.

Section 10. Audit. The City may conduct random audits of Ratepayers to ensure that assessments are being properly calculated and reported.

Section 11. Expenditures. Expenditures from the Account shall be made upon demand and presentation of documentation of allowable expenses to the Director by the Program Manager and shall be used exclusively for the statutory purposes as defined in Section 2, including the reimbursement of costs reasonably incurred for the benefit of the STIA by the Ratepayers or the Program Manager in the formation and creation of the STIA and its initial work program, respectively. Demand for payment and presentation of documentation of allowable expenses may also be submitted by the Program Manager to the Director on a monthly basis based on pro rata allocation (1/12) of the annual work plan and budget approved by the Ratepayers Advisory Board.

Section 12. Ratepayers Advisory Board. The Director shall appoint an interim Ratepayers Advisory Board comprised solely of Ratepayers from the Area within thirty days of the effective date of this ordinance. The Director shall solicit recommendations from the Ratepayers with the assistance of the then current presidents of the Seattle-King County Convention and Visitors Bureau and the Seattle Hotel Association, and shall appoint the interim board solely from that list. Within ninety days of the effective date of this ordinance, the interim Ratepayers Advisory Board will recommend to the Director a permanent Ratepayers Advisory Board ("Board") comprised solely of Ratepayers. The Board shall consist of an odd number of Ratepayers (no less than nine and no more than eleven members) reflecting the diversity of location, size and type of Ratepayers, whose initial terms shall be for one, two, or three years in accordance with bylaws which shall be adopted by the interim Ratepayers Advisory Board. Individuals serving on the Board must possess the legal authority to represent, and act on behalf of, their respective hotel properties in all STIA board matters. Subsequent appointments to the Board shall be made in accordance with bylaws adopted by the Board, subject to review and approval by the Director to ensure adequate representation of Ratepayers reflecting the diversity of location, size and type of Ratepayers.

The Ratepayers Advisory Board shall be responsible for adopting policy guidelines, providing advice and consultation to the Department of Finance and Administrative Services initially, and to the Program Manager, on all matters related to the operation of the program.

The Board shall meet at least once quarterly; approve an annual work program and budget; address and discuss Ratepayer concerns and questions regarding the STIA district and program; review all reports submitted to the Department by the Program Manager; and sponsor an annual Ratepayers' meeting.

At the annual Ratepayers' meeting, the Board shall submit for approval its proposed work plan and budget for the next year, and its recommendation regarding whether to continue with the current Program Manager if the Program Manager's contract is scheduled to expire at the end of the current year. The work plan, budget, and a decision on the Program Manager contract must be approved by a vote of the Ratepayers attending the meeting.

Section 13. Administration. The Director shall administer the program for the City with authority to:

(a) Collect the special assessments; refund special assessments when overpaid or otherwise improperly collected; extend the deadline for payment and waive delinquency charges and interest whenever the delinquency results from extenuating circumstances beyond the Ratepayer's control, such as a casualty loss causing premature closure of the business or bankruptcy or the total payment due to the City (exclusive of penalty and interest) is Ten Dollars ($10.00) or less.

(b) Calculate and collect the interest for late payments;

(c) After receiving the recommendation of the interim Ratepayers Advisory Board, execute a program management contract with a Program Manager for a term no less than seven years;

(d) Accept and deposit advance payment of assessments by ratepayers; accept donations from governmental agencies, the public, and owners and operators of businesses on land that is developed or redeveloped during the existence of the STIA for STIA programs.

Section 14. Contract for Program Management. The Director is authorized to contract with any local non-profit entity experienced in tourism marketing to act as the Program Manager whose duty shall be to manage the day-to-day operations of the STIA and, after receiving the approval of the Ratepayers at each annual meeting, to administer the projects and activities. The entity acting as Program Manager shall have on its governing Board of Directors an advisory member representing the interests of organized labor within the STIA. It is the intent of the City Council that the Director contract with the Seattle-King County Convention and Visitors Bureau as the initial Program Manager. The selection of a Program Manager upon the recommendation of the Ratepayers Advisory Board acting on behalf of the Ratepayers shall obviate compliance with the consultant selection procedures of Seattle Municipal Code Chapter 20.50 and Section 20.42.050.

Section 15. Commencement of Assessments. Assessments shall commence as of November 1, 2011.

Section 16. Request to Disestablish. Upon a petition signed by Ratepayers that would pay sixty percent of the proposed special assessments, the Ratepayers Advisory Board shall request the City Council to disestablish the STIA in accordance with Chapter 35.87A RCW.

Section 17. Ratification and Confirmation. The making of contracts and expenditures and the sending of assessment notices pursuant to the authority and prior to the effective date of this ordinance are hereby ratified and confirmed.

Section 18. This ordinance shall take effect and be in force 30 days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten days after presentation, it shall take effect as provided by Seattle Municipal Code Section 1.04.020.

Passed by the City Council the ____ day of ________________________, 2011, and signed by me in open session in authentication of its passage this

_____ day of ___________________, 2011.

_________________________________

President __________of the City Council

Approved by me this ____ day of _____________________, 2011.

_________________________________

Michael McGinn, Mayor

Filed by me this ____ day of __________________________, 2011.

____________________________________

City Clerk

(Seal)

Exhibit A: Seattle Tourism Improvement Area Map

Carlton Seu/Nate Van Duzer LEG Tourism Improvement Area ORD July 21, 2011 Version #1