Supervisors Approve Changes in the Business Improvement District for Lodging, as Innkeepers Address the “Baby Elephant” in the Room

Leisure-focused marketing dollars are not driving business for inland lodging providers

Tax revenues from tourism added up to more than $27 million last year. (Screenshot courtesy of VisitMendocino.com)

The Mendocino County Board of Supervisors moved forward with proposed changes to the county’s Lodging Business Improvement District ordinance, including a request from Visit Mendocino County, also known as the Mendocino County Tourism Commission, to reduce or eliminate a longstanding 3% county administrative fee charged against tourism assessment revenues.

At the most recent May 19 meeting, the board unanimously approved the commission’s annual report, set a June 23 public hearing on next year’s assessment, and directed staff to begin work on ordinance revisions that would shift more operational authority from the county back to the tourism organization itself.

Interim executive director Scott Schneider told supervisors the organization wants county officials to relinquish several governance functions currently embedded in county ordinance.

Those proposed changes include allowing the tourism organization to control its own board elections and internal board composition, rather than relying on county-administered processes handled through the auditor-controller’s office.

Existing Structure Has Contributed to Board Vacancies

Schneider argued the current structure has made it difficult to fill vacancies and maintain quorums.

“We are asking the supervisors to consider changing the BID ordinance … to give those powers and rights back to the organization itself,” Schneider said.

The organization also renewed its annual request for relief from the county’s 3% administrative fee, which is deducted from the tourism assessment collected from hotels, motels and short-term rentals countywide. The amount is roughly $36,000.

Visit Mendocino representatives argued the county already benefits from approximately $9 million annually in transient occupancy tax revenue while reinvesting “nothing” directly into tourism promotion.

“This organization now without the match is up to $1.2 million,” Schneider said, referring to the assessment-funded tourism budget. “The county brings in $9 million a year in transient occupancy tax, of which the county reinvests nothing into tourism.”

County Says Actual Administrative Costs Are Nearly Double the Fee

But Auditor-Controller/Treasurer-Tax Collector Chamise Cubbison pushed back against eliminating the fee, warning supervisors that the county’s actual costs already exceed the amount being recovered.

Cubbison told the board that administering the tourism district — including elections, collections, quarterly reporting and accounting — currently costs closer to 6% annually, leaving county taxpayers effectively subsidizing the tourism district.

“Even though we are getting 3% back, there is still an additional minimum of about $30,000 that the county is contributing,” Cubbison said.

Supervisors ultimately stopped short of eliminating the fee immediately, instead approving a modified report that keeps the 3% charge in place for now while county staff investigates the cost of outsourcing collections and administration to a third-party vendor.

Inland Communities Again Raise Concerns About Tourism Inequity

The meeting also addressed long-running tensions between coastal and inland tourism interests. Visit Mendocino board chair Cally Dym, owner and operator of the Little River Inn, addressed what she called “the baby elephant” in the room — a plan to direct marketing dollars to the areas where they are collected.

Dym said marketing Mendocino County as a destination for personal enjoyment, relaxation, or vacation is not driving visitors to inland hotel rooms. “The leisure market just does not move the needle for inland anymore,” Dym told supervisors.

Dym said newly available tourism spending data by ZIP code had revealed the need for a substantially different inland marketing strategy, though few specifics were presented Tuesday.

Supervisors repeatedly requested more detail about what that inland strategy would actually look like.

Supervisor Madeline Cline, whose inland district spans Redwood Valley, Potter Valley, and Hopland said she remained unconvinced the organization had presented a concrete plan for inland communities.

“I just feel unsatisfied at this point that the true investment — not the dollar amount but the actual strategy — will happen for inland,” Cline said.