It’s called a Tourism Public Improvement District and the San Antonio City Council voted to approve one for the Alamo City in a 10-1 vote Thursday.
The TPID allows some large hotels in San Antonio to levy a fee on stays. The money generated will go to Visit San Antonio, the city’s tourism bureau, for marketing. However, its creation received opposition from District 4 Councilman Rey Saldana, who wanted some of the money to go to homelessness initiatives.
The 1.25 percent per night fee would be levied on stays in hotels that have at least 100 rooms or more. Participation is optional for stays at hotels with less than 100 rooms. The fee is expected to generate about $10 million in revenue for the first year.
Casandra Matej, president and CEO of Visit San Antonio, told the council Thursday the fee was necessary to create new revenue for Visit San Antonio which, she said, has seen a flat budget for the last seven to 10 years.
“Couple that with the competitive landscape when you look at Dallas and Houston, in particular. They doubled their budgets within that time frame and they started marketing in our key market segment, the leisure market,” said Matej, who added San Antonio was losing part of the tourism market share in Texas.
The fee is different than the current hotel occupancy tax, which in San Antonio,is a tax of 16.75 percent collected for stays. The city gets about 7 percent of that tax, and the rest goes to the state, county, and convention center. The city uses its portion for Visit San Antonio, arts, historic preservation, and convention facilities.
The TPID money, Matej said, would go directly to promoting San Antonio.
“Immediately, what we will look at is adding to our marketing for this upcoming summer,” she said. “So we will grow or buy or try new markets.”
The creation of the district was pushed by large hotel owners in San Antonio. Managers and owners of 106 large hotels signed petitions signaling their approval. Liza Barratachea, president of the San Antonio Hotel and Lodging Association, said attracting more visitors means more employment opportunities in San Antonio.
“When our industry is doing better, we’ll grow. So, that means more jobs, it means promotions, it means … enhanced opportunities for employees in hotels, and really across the market and … the entire industry,” she said.
The Texas Legislature provided the ability to generate this tax in 2011. Similar districts have been created in Dallas, Ft. Worth, and Arlington.
Saldana, who cast the lone dissenting vote, pushed for a portion of the money collected from the TPID to go toward dealing with homelessness. It was an idea, he said, he received from officials in Austin.
“They weren’t doing the TPID transaction to support homelessness but the idea had come up through (Austin) Mayor (Steve) Adler,” Saldana said. “And I said, ‘You know what, that is an excellent idea maybe we can discuss it with the industry.’ "
Saldana’s push received support from groups like the Texas Organizing Project, which asked the council to not approve the TPID until homelessness funding could be added.
“It’s never too late to do what is right and it’s always the right time to take those right steps,” said Joleen Garcia with TOP. “If we are to have an equitable and just city, then corporate handouts without tangible community benefits need to end.”
In November, a memo sent out by San Antonio City Manager Sheryl Sculley highlighted potential funding allocation for Haven for Hope, the city’s homeless and assistance shelter. In the memo, she said changing the initial agreement on how TPID funds would be used require the process to be restarted and signatures to be gathered again and could jeopardize its creation.
While Saldana’s request for homelessness support from the TPID failed, it generated discussion amongst council members on alternate funding for Haven for Hope and other initiatives.
“I do believe that we can partner with the tourism industry in San Antonio for the benefit of all our citizens, for those who have the least and those who are most vulnerable — the homeless — who should not be voiceless and for those who have the most,” District 1 Councilman Roberto Trevino said. “I want to thank Councilman Saldana for bringing attention to this issue and how we can creatively collaborate to help those in need.”
San Antonio Mayor Ron Nirenberg said funding for homelessness programs merited more in-depth discussions. He asked Sculley to return to the City Council with recommendations before a midyear budget review next spring.
The TPID will last until 2027. It’s expected to start generating revenue by this spring.
Joey Palacios can be reached at Joey@TPR.org and on Twitter at @Joeycules
