7C, Mpls North Convention and Visitors Bureau Discussion

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~ ~HILLS MEMORANDUM DATE: March 10, 2008 TO: City Council FROM: Noah A. Simon, Assistant City Administrator SUBJECT: Visit Minneapolis North Convention and Visitors Bureau, the City of Arden Hills and the 3% Lodging Tax Requested Action For Council to discuss whether or not it wishes to continue to participate in this agreement and collect the 3% tax or opt out of the agreement in 2010 (the agreement has specific language regarding termination). Backl!round In 2004, the City entered into an agreement with Visit Minneapolis North Convention and Visitors Bureau to collect the lodging tax enacted by the City of Arden Hills to fund a convention and visitors bureau in accordance with Minnesota Statutes (the agreement is attached to this agenda item). The tax is 3% of the gross monthly receipts minus exclusions. The City retains 5% of the tax for administrative purposes. The mission of Visit Minneapolis North is attached for reference. In December 2007, the Super 8 Motel of Arden Hills sent a letter (attached) to the City requesting the City terminate the agreement. Interim Administrator Jim Willis spoke with Vik Bhartia and he repeated his request for the City to terminate the agreement. Until recently, there were two hotel/motels in Arden Hills-the Holiday Inn has recently closed. The purpose of the lodging tax is to promote and attract visitors and promote spending and economic growth in within the eleven member cities. The eleven communities are: Arden Hills, Anoka, Blaine, Brooklyn Center, Brooklyn Park, Coon Rapids, Fridley, Ham Lake, Maple Grove, Mounds View and Shoreview have all adopted the same tax. In addition, the cities of Bloomington, Minneapolis, St. Paul, Apple Valley, Shakopee and Roseville have their own convention and visitors bureaus. The tax that is collected is added to the total room rate and is not a tax on the business. In the previous 13 months (Jan 07 to Jan 08), the City collected a total of $68,379.88 and retained $3,4l8.98.