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Home My WebLink AboutCC 2025-07-22_09g Resolution of Intention AGTBID Authorized UsesItem 9.g. MEMORANDUM TO: City Council FROM: Sheridan Bohlken, Director of Recreation Services SUBJECT: Resolution of Intention to Amend AGTBID Authorized Uses DATE: July 22, 2025 RECOMMENDATION: 1) Adopt a Resolution of Intention to amend the authorized improvements and activities funded by assessments imposed through the Arroyo Grande Tourism Business Improvement District, initiate the process to amend the City’s Municipal Code, and take other actions related thereto; and 2) Find that the recommended actions to support the Arroyo Grande Tourism Business Improvement District are not subject to the California Environmental Quality Act (“CEQA”) because these efforts have no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060 (c)(2) and (3), 15378). IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: Amending authorized improvements and activities (the “Authorized Uses”) to be funded with assessments collected through the Arroyo Grande Tourism Business Improvement District (“AGTBID”), and to amend the Municipal Code accordingly, will not impact the current AGTBID budget but may shift futu re funding toward different project types. Staff time will be required to draft ordinance language, update policies, and oversee project implementation and alignment with tourism goals. BACKGROUND: The AGTBID was established to fund activities that promote tourism and increase overnight stays, specifically to benefit lodging businesses. Currently, AGTBID funds are restricted to uses such as marketing, advertising, and administrative activities that directly promote tourism or otherwise put “heads in beds.” On October 15, 20241, a majority of AGTBID Advisory Board agreed to hold a future discussion about the potential for expanding eligible uses of assessment funds. At the 1 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=13245 Page 153 of 440 Item 9.g. City Council Resolution of Intention to Amend AGTBID Authorized Uses July 22, 2025 Page 2 December 17, 20242, regular meeting, the Advisory Board voted unanimously to recommend the City Council amend the AGTBID Authorized Uses and to amend the Arroyo Grande Municipal Code to allow greater flexibility in the use of these funds. The proposed amendments to the Authorized Uses would include the following categories, as authorized by State law:  Improvements, including the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following: o Parking facilities, benches, trash receptacle, street lighting, decorations including public art and cultural enhancements and decorations, parks, and fountains; and o Activities which benefit businesses located and operating within the AGTBID.  Promotion and furnishing of, but not limited to, the following activities: o Promotion of public events which benefit businesses within the AGTBID and which take place on or in public spaces within the AGTBID ; and o Furnishing of music in any public place within the AGTBID; and o Promotion of tourism within the AGTBID. The proposed amendment aligns with practices in other regional jurisdictions, including Pismo Beach, San Luis Obispo, and Paso Robles. ANALYSIS OF ISSUES: Expanding the Authorized Uses of AGTBID assessment funds is a strategic and research- supported approach to increase Arroyo Grande’s competitiveness as a visitor destination while enhancing public amenities that benefit both tourists and residents. Broadening the Authorized Use of these funds aligns with proven models in peer communities and reflects national tourism and economic development trends. Regional Comparisons and Economic Impact Several cities in San Luis Obispo County have successfully implemented broader TBID spending authorities, demonstrating measurable improvements in tourism performance and community impact: City of Paso Robles  Uses: Streetscape improvements, public art installations, wayfinding, and infrastructure to support large-scale tourism events.  Impact: TOT revenues increased by 25% from 2017 to 2022. The internationally acclaimed Sensorio light installation has attracted over 1 million visitors since 2019, extending stays and increasing overnight bookings. 2 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=13247 Page 154 of 440 Item 9.g. City Council Resolution of Intention to Amend AGTBID Authorized Uses July 22, 2025 Page 3 City of San Luis Obispo  Uses: Public art (murals, sculptures), pedestrian-scale lighting, wayfinding, tree planting, and sustainability-focused programs like Keys for Trees.  Impact: Achieved record TOT collections exceeding $11 million in FY 2022 -23 — surpassing pre-pandemic highs. Investments have enhanced downtown vibrancy and visitor experience. City of Pismo Beach  Uses: Beautification projects, murals, ADA-accessible beach infrastructure, public restrooms, and eco-tourism enhancements.  Impact: Improved infrastructure has supported longer visitor stays and increased repeat visitation, as noted in TBID evaluations. Events like the Clam Festival are better supported with modern, visitor-ready amenities. Why It Matters for Arroyo Grande Currently, AGTBID funds are restricted to uses such as marketing, advertising, and administration. While essential, these activities alone do not fully leverage the destination’s physical potential. Broadening the Authorized Uses would allow the AGTBID to: 1. Invest in event-supporting infrastructure, such as public art and accessibility improvements; 2. Activate and enhance public spaces through beautification, lighting and signage; 3. Incorporate sustainability and placemaking efforts such as tree planting and wayfinding, benefitting the AGTBID businesses, visitors and residents. These enhancements could amplify the effectiveness of marketing campaigns by improving the physical environment experienced by guests, increasing visitor satisfaction and a likelihood of return. ALTERNATIVES: 1. Adopt the Resolution of Intention; 2. Modify and adopt the Resolution of Intention; 3. Do not approve the Resolution of Intention, or 4. Provide other direction to staff. ADVANTAGES: Modifications to the Authorized Uses would e nhance destination appeal, aligns with regional and national best practices, and provides additional benefit to the AGTBID businesses, visitors, and residents. DISADVANTAGES: Modifying the Authorized Uses would shift spending from solely marketing and advertising focus, potentially increase administrative oversight, and require clear criteria and guardrails. Page 155 of 440 Item 9.g. City Council Resolution of Intention to Amend AGTBID Authorized Uses July 22, 2025 Page 4 ENVIRONMENTAL REVIEW: The recommended actions to support the Arroyo Grande Tourism Business Improvement District are not subject to the California Environmental Quality Act (“CEQA”) because these efforts have no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060 (c)(2) and (3), 15378). PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2. ATTACHMENTS: 1. Resolution of Intention to Amend the AGTBID Authorized Uses and City’s Municipal Code Page 156 of 440 ATTACHMENT 1 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DECLARING ITS INTENTION TO AMEND THE AUTHORIZED IMPROVEMENTS AND ACTIVITIES FUNDED BY ASSESSMENTS IMPOSED THROUGH THE ARROYO GRANDE TOURISM BUSINESS IMPROVEMENT DISTRICT, INITIATE THE PROCESS TO AMEND THE CITY’S MUNICIPAL CODE, AND TAKING OTHER ACTIONS RELATED THERETO WHEREAS, the Arroyo Grande Tourism Business Improvement District (the “AGTBID”) was established to promote tourism and increase overnight stays in the City of Arroyo Grande pursuant to California Streets and Highways Code section 36500 et seq., known as the Parking and Business Improvement Area Law of 1989 (the “Act”); and WHEREAS, the AGTBID is also codified pursuant to Chapter 3.46 of the Arroyo Grande Municipal Code and the use of AGTBID assessment funds is currently limited to activities including marketing, advertising, and administration in support of tourism promotion ; and WHEREAS, on December 17, 2024, the AGTBID Advisory Board voted unanimously to recommend that the City Council amend the authorized improvements and activities funded by the assessments (the “Authorized Uses”) to benefit the businesses located within the AGTBID pursuant to the Act and to amend the Arroyo Grande Municipal Code to broaden the allowable uses of AGTBID revenues; and WHEREAS, the proposed amendment to the Authorized Uses seeks to authorize the use of assessment funds for additional purposes that enhance the tourism experience and improve the quality of public amenities, including public art projects, beautification efforts, event infrastructure, and sustainability-related initiatives located within the boundaries of the AGTBID for the benefit of businesses included in the AGTBID, as further described below; and WHEREAS, the City Council finds that expanding the AGTBID’s Authorized Uses of the assessment funds is in the best interest of the businesses located within the AGTBID, the City, and its residents and will further the goals of tourism development and economic vitality; and WHEREAS, the recommended actions to support the Arroyo Grande Tourism Business Improvement District are not subject to the California Environmental Quality Act (“CEQA”) because these efforts have no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060 (c)(2) and (3), 15378). Page 157 of 440 RESOLUTION NO. PAGE 2 NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande does hereby declare the foregoing recitals are all true and correct and are incorporated herein by this reference, the City Council further declares its intention to amend the AGTBID Authorized Uses and to amend Chapter 3.46 of the Arroyo Grande Municipal Code to expand the Authorized Uses of AGTBID assessment revenues. The proposed amendments to the Authorized Uses would include the following categories, as authorized by State law:  Improvements, including the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful live of five years or more including, but not limited to, the following: o Parking facilities, benches, trash receptacle, street lighting, decorations including public art and cultural enhancements and decorations, parks, and fountains; and o Activities which benefit businesses located and operating within the AGTBID.  Promotion and furnishing of, but not limited to, the following activities: o Promotion of public events which benefit businesses within the AGTBID and which take place on or in public spaces within the AGTBID; and o Furnishing of music in any public place within the AGTBID; and o Promotion of tourism within the AGTBID. BE IT FURTHER RESOLVED by the City Council of the City of Arroyo Grande shall provide notice of a public hearing on the question to amend the AGTBID Authorized Uses pursuant to section 36523 of the Act. BE IT FURTHER RESOLVED, the City Council of the City of Arroyo Grande has scheduled a public hearing on the question to amend the AGTBID Authorized Uses for August 12, 2025 at 6:00pm, or as soon as practicable thereafter, in the City Council Chamber located at 215 E. Branch Street, Arroyo Grande, CA 93420 where all protests against the amendments of the Authorized Uses shall be heard and considered. BE IT FURTHER RESOLVED by the City Council of the City of Arroyo Grande that upon the conclusion of such public hearing, absent a majority protest, it is the intention of the City Council to approve the amendment to the Authorized Uses pursuant to the Act. BE IT FURTHER RESOLVED by the City Council of the City of Arroyo Grande that the City Council directs staff to prepare and present a draft ordinance language amending Chapter 3.46 of the Arroyo Grande Municipal Code consistent with this Resolution. BE IT FURTHER RESOLVED by the City Council of the City of Arroyo Grande this Resolution shall become effective immediately upon its adoption. Page 158 of 440 RESOLUTION NO. PAGE 3 On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this th day of , 2025. Page 159 of 440 RESOLUTION NO. PAGE 4 CAREN RAY RUSSOM, MAYOR ATTEST: JESSICA MATSON, CITY CLERK APPROVED AS TO CONTENT: MATTHEW DOWNING, CITY MANAGER APPROVED AS TO FORM: ISAAC ROSEN, CITY ATTORNEY Page 160 of 440