Tourism marketing organization to boost downtown Laguna Beach under new agreement

Downtown Laguna Beach received a boost on Tuesday, as the City Council approved a deal with Visit Laguna Beach, a tourism marketing organization, to secure up to an estimated $5.5 million over the next decade.

Under the agreement the city would receive an annual contribution of approximately $500,000 each fiscal year through June 30, 2035, provided the tourism marketing district is extended beyond next year.

The initial $500,000 contribution will be broken down into two parts, with $200,000 going toward space for artists to both live and work upon signing. The remainder will be paid out in March.

“This investment is going to hurt,” said Karyn Philippsen, founding chairman of Visit Laguna Beach. “It’s not going to be easy for our organization, but it’s the right investment. It’s the right investment to bring us up to the next level of the quality of tourism that this community’s looking for. That’s our goal. We’re doing it with you.

“We are the hotels. The hotels are dedicated to making this happen and pulling in the artists, which are such a fundamental part of our historical component, and making sure that they are protected and have a place in this community.”

Contributions made as part of the deal will go into a special fund for improvements and services to the downtown area. The amount would fluctuate each year based on the percentage increase or decrease in revenue from the prior fiscal year.

“By committing to these enhancements, we’re fostering an environment that supports both our local businesses and the wellbeing of our residents,” Councilman Mark Orgill said in a statement. “Visit Laguna Beach’s involvement in this effort highlights the strong collaboration we share and sets the stage for sustained improvements that will serve the community for years to come.”

The tourism marketing district is designed to fund activities that promote tourism through a 2% self-assessment paid for by overnight visitors at lodging establishments in town. Half of that money supports the local arts organizations, while the other half goes to Visit Laguna Beach. The latter will be contributing the $500,000 from its share. Those funds are separate from transient occupancy tax collected.

“Talking to the hotels, they want something for this money,” Mayor Sue Kempf said. “They’re not just giving it to us for us to do whatever we want. They’re looking for a better experience for the visitors. What they frequently say is, ‘When are you going to do something about your downtown?’ That happens all the time.”

A handful of public speakers, responding to the funding being earmarked for the downtown area, had called for other parts of town to be considered. Some called the allocation of funds “inequitable,” noting that there are also hotels in South Laguna, while others argued that visitor impacts are felt throughout town.

“It is true the agreement is limited to downtown, but it does include the ability to enhance services, including public safety measures, so the enforcement type of measures could be funded out of this,” Councilman Bob Whalen said.

“We’re going to be in negotiations with the tourism marketing district anyway,” continued Whalen, who added the agreement would terminate if the district wasn’t extended in the spring. “... This is an offer they made to us, and we’re accepting, but we can explore with them whether to expand it to other areas that will still satisfy the legal requirement [of providing a benefit to overnight stays].”