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New City America has rapidly become a national leader in the consulting on, and formation of these new financial mechanisms established to stabilize the marketing of local and regional destination management corporations.

Known as “TIDs”, these new Tourism Improvement Districts are the alternative to the dwindling resources allocated by City governments to their struggling Visitor’s Bureaus. TIDs are assessment districts established to fund new and improved marketing programs to bring more “heads on beds” to cities in an increasingly competitive visitor industry.

Marco Li Mandri, led the panel of experts at the recently held “Destination Management Association International” conference held in Atlanta Georgia in late July.

Currently, New City America has formed, or is under contract to form the following TIDs:

• San Francisco Tourism Improvement District, adopted December 2008. The SFTID will generate approximately $27 million dollars during its first year, making it the largest TID or BID ever formed in North America. New City America was the consultant company that worked with the San Francisco Convention and Visitor’s Bureau to lead this effort;



• New City America has been hired by the Baltimore Convention and Visitors Association to form a new TID for Baltimore. This TID will need state legislation to be implemented, but once formed in the Spring of 2010, should bring an additional 2 – 3 million dollars in new revenues to the “Visit Baltimore” destination management corporation. This district is scheduled for establishment in the summer of 2010.



• New City America is in the final stages of establishing two new TIDs for the Orange County Visitors and Convention Bureau. These two new TIDs for the cities of Anaheim and Garden Grove, will funnel their estimated 9 million dollars in new revenue to the Visitor’s Bureau. The current contribution from the City of Anaheim to the Visitors bureau will be redirected to improving and expanding the Anaheim Convention Center. It is scheduled that these two new districts will be established in the Winter of 2010.



• As part of its review for the needs for Downtown Coronado, a new Coronado TID has been considered to be a realistic funding mechanism for promoting both the major hotels of Coronado as well as the business community at large. This proposed TID, if established in the Winter of 2010, would generate almost 1 million dollars in new revenues to market and promote Coronado nationally and regionally.



• Other cities seeking information on TIDs that New City America has advised since the July DMAI conference include: Milwaukee, Wisconsin, Fort Worth Texas, Dallas Texas and the State of Connecticut,

TID LETTERS:

 Hotel Del Coronado - TID Letter
 San Francisco Visitors Bureau - TID

CURRENT TIDS IN PLACE:

Based upon its research, it appears that two states, California and Montana currently have legislation on the books that would allow for creation of these business based Tourism Improvement Districts. This does not preclude the creation of districts in the other states, however, this is where TID experts such as New City America’s Marco Li Mandri, can help the Visitor’s bureau to determine what is possible.

TIDs have been formed in the following cities: California:

• San Francisco;
• Anaheim (in formation)
• Garden Grove (in formation
• LA (under investigation)
• San Diego
• Sacramento
• San Jose
• South Lake Tahoe
• Monterrey
• Carlsbad
• Morro Bay
• South Placer
• Vallejo
• Coronado (under investigation)
• Santa Clara
• Marin County
• Tiboron
• Sonoma County

• Missoula
• Billings
• Glasgow
• Bozeman
• W. Yellowstone

• Baltimore (under formation)

ARTICLE ON TIDS

At the July 28th DMAI International Conference in Atlanta, a workshop was held on a new concept in financing DMOs – the Tourism Improvement District (TID). Initiated in California, these TIDs are demonstrating that an independent, reliable source of funding for your marketing, promotions, and administrative programs, is the most constructive way in which to deal with the fiscal crisis faced by DMOs throughout the nation.

The TID concept is based upon the old Business Improvement District (BID) concept. That is, benefiting stakeholders fund programs through special assessments that are used to enhance and improve a certain area or industry, and most importantly, those funds are controlled by the contributing group.

The panel on financing DMOs through TIDs was moderated by New City America and included Dan Fenton the CEO of Team San Jose, and the new Chairman of the DMAI, as well as Dan Goldes from the San Francisco Convention and Visitors Bureau and Ken Fischang from the Sonoma County Visitors Bureau. Each of these gentlemen’s organizations are benefiting for TIDs that were established under California state law.

The TID concept is simple: members of a DMO determine that they cannot rely on public funding or declining Hotel tax revenue to fund their operations and remain competitive. They work with the local DMO and a TID consultant to figure out an alternative financing mechanism that is independent from the increasingly squeezed general funds of the local government. Normally, those TID funds take the form of an assessment levied on each occupied hotel room. These TID funds can be used to supplement existing local funding or replace that funding and have the dedicated local funds be reallocated to improvement in the visitor industry infrastructure, such as Convention Center upgrades. The hotel owners and operators themselves determine the rate of TID assessment needed to fund the DMO operations.

The TID funds are generated from, and controlled by the local DMO or an affiliate organization. Those funds are then used to expand marketing programs, buy down conference costs, cover administrative costs or fund satellite offices.

New City America recently worked with the San Francisco CVB to form the largest district of its kind in the United States. The TID in San Francisco is estimated to generate approximately $24 – 27 million during its first year of operation. New City America is also under contract to form TIDs in Anaheim and Baltimore.

What you need to look for in determining if a TID is right for you is the following:

1. Demand for independent funding from your membership or Board;
2. Legislative tools to allow for a levy of assessments on occupied hotel rooms;
3. Timing and the political will to see it through the public hearing stage and adoption of a TID ordinance;

As cities are facing increasing financial hardships throughout the country, the choice of political leaders will increasingly be between libraries and parks vs. DMOs. Unfortunately, DMOs may be on the losing end of this battle for funding due to the constituent base.

The TIDs assures DMOs reliable, stable and independent funding so you can remain competitive in a rapidly changing market. This is the wave of the future in an increasingly changing visitor industry.