Coachella Municipal Code Ch. 4.49 Hotel Operations Incentive Program

The purpose of this chapter is to provide an incentive program for the operation and maintenance of quality and first class hotel facilities which enhance the tourist and travel experience for visitors to the city of Coachella, provide attractive and desirable visitor serving facilities and experiences, and assist the city in achieving its tourism goals. In the implementation of this program, the city council finds:

A. The general welfare and material well-being of the residents of the city of Coachella depend in large measure upon the growth and expansion of the tourism and travel industries in the city.

B. The operation, maintenance, and expansion of the inventory of quality hotels and first class hotels in the city of Coachella will create desirable visitor serving facilities that will contribute to the growth and expansion of tourism and travel opportunities in the city, provide employment opportunities for the residents of the city, and promote and enhance the economy of the city.

C. It is in the best interest of the city of Coachella to induce and encourage the, operation, and maintenance of hotel facilities that would not otherwise exist, thereby creating new sources of tax revenues for the city's general fund which supports the public services that the city provides its residents.

D. The authority granted and the purposes to be accomplished by this chapter are properly local governmental and public purposes for which public funds can be expended and that the operation, maintenance, and expansion of the inventory of quality and hotels is of paramount importance to the city of Coachella, its residents, and businesses.

(Ord. No. 1106, 5-24-17)

For the provisions of this chapter, the following definitions shall apply:

"Adjusted tax rate" means the hotel operations incentive program tax rates which shall be exclusively utilized for the calculation of the operating assistance to be paid by the city to qualified operators of hotels participating in the hotel performance incentive program.

"Comfort hotel" means a hotel which provides appropriate standards of physical features and operational services established for hotels by the American Automobile Association, J.D. Power & Associates, Forbes, or Smith's Travel Research Service.

"Existing hotel" means a property that was constructed, occupied, and used as a hotel on or before January 1, 2018.

"First class hotel" means a hotel which provides standards of physical features and operational services which meet or exceed the higher rating criteria established for hotels by the American Automobile Association, J.D. Power & Associates, Forbes, or Smith's Travel Research Service.

"First class hotel standard" means standards of physical features and operation which qualify a hotel as a first class hotel and which include operation of the hotel on a twenty-four (24) hours per day/seven days a week basis with housekeeping services, food and beverage services, room services, banquet and meeting services, concierge and bellman services, and parking services.

"Fully entitled" means a hotel that has received and/or been issued all discretionary permits and entitlements from the city required for the construction of a new hotel.

"Hotel" means any property containing four or more guest rooms used by four or more guests for compensation and where the guest rooms are designed and intended as transient occupancy accommodations.

"New hotel," "first class new hotel," and "comfort new hotel" means a first class hotel or comfort hotel that is or was fully entitled as a hotel after January 1, 2018, but before December 31, 2025. The term "new hotel" does not include all, or any portion of, or addition to, an existing hotel.

"Operating covenants" means the covenants described in Section 4.49.050 of this Code.

"Operator" means the person who is proprietor of a hotel, whether in the capacity of owner, lessee, sub-lessee, mortgagee in possession, licensee, franchisee, or any other capacity, or the assignee or designee of such proprietor.

"Transient occupancy" means an uninterrupted stay of no more than twenty-eight (28) consecutive calendar days.

"Transient occupancy tax base" means the existing transient occupancy rate in place at the adoption of this ordinance, nine percent.

(Ord. No. 1106, 5-24-17; Ord. No. 1182, § 2, 8-25-21)

A. To qualify for the hotel operations incentive program for any hotel, the operator shall:

1. Complete and submit to the city manager, the city's application for the hotel operations incentive program and outline the following expected from the hotel:

a. New full time and part-time jobs to be created;

b. New hospitality uses to capture share of regional tourism economy and attract additional hospitality uses to city;

c. Local tax generation from uses (transient occupancy tax, sales taxes, and increased level of property taxes) to improve the quality of life in the city.

2. Provide free use of meeting facilities in the hotel for city events and Coachella-based public entities, not-for-profit charities, and community organizations.

3. Provide independent, third-party, certification acceptable to the city of the level of quality of the first class hotel or comfort hotel.

4. Execute the operating covenants which shall include provisions regarding continuing use, maintenance, non-discrimination, and such other provisions as the city council in its sole discretion, may reasonably determine are necessary or appropriate to preserve the goals and intent of this chapter.

(Ord. No. 1106, 5-24-17)

A. First Class New Hotels. The city shall pay to an operator of a first class new hotel an amount equal to fifty (50) percent of the adjusted tax rate. Such payments shall be made for twenty (20) years from the certificate of occupancy for the hotel or until the operator has been paid twenty-five million dollars ($25,000,000.00), whichever event occurs first.

The city and a qualified participant under this section may enter into an agreement, at the sole discretion of the city, to receive an increase in the percent of the adjusted tax rate, for no longer than the first two years of the qualified participant's incentive program.

Without regard to any preceding conditions of this section, the program shall terminate at any point the first class new hotel is not operated as a first class hotel.

B. Comfort New Hotels. The city shall pay to an operator of a comfort hotel with one hundred twenty-five (125) or more rooms an amount equal to fifty (50) percent of the adjusted tax rate and such payments shall be made for twenty (20) years from the certificate of occupancy for the hotel or until the operator has received twenty-five million dollars ($25,000,000.00), whichever event occurs first.

1. The city shall pay to an operator of a comfort hotel with fifty-one (51) to one hundred twenty-four (124) rooms an amount equal to fifty (50) percent of the adjusted tax rate and such payments shall be made for ten (10) years or until the operator has received ten million dollars ($10,000,000.00), whichever event occurs first.

2. The city shall pay to an operator of a comfort hotel with fifty (50) or fewer rooms an amount equal to fifty (50) percent of the adjusted tax rate and such payments shall be made for five years or until the Operator has received five million dollars ($5,000,000.00), whichever event occurs first. Without regard to any preceding conditions of this section, the program shall terminate at any point the hotel is not operated as a comfort hotel.

(Ord. No. 1106, 5-24-17)

Each operator eligible to participate in the city's hotel operations incentive program shall execute operating covenants approved by the city council, and recorded with the county of Riverside recorder's office.

(Ord. No. 1106, 5-24-17)

All transient occupancy tax revenues remitted to the city by an operator of a hotel covered by operating covenants as provided in this chapter shall be deemed general fund revenues of the city and shall be deposited in the city's general fund and subject to an annual appropriation by the city council.

(Ord. No. 1106, 5-24-17)

Consistent with the intent and goals of this chapter, the city manager may adopt administrative rules and regulations for implementation and furtherance of the requirements of this chapter.

(Ord. No. 1106, 5-24-17)