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Tourism Business Improvement District Under Consideration

If established, hotels and motels within the district would be required to assess a two percent levy on guests in addition to the city's current 11 percent Transient Occupancy Tax.

A new tourism district may be coming to the city soon and, if a recent 7-0 vote by the is any indication, it could have the city's full backing.

The council's vote approved a resolution to declare intent to establish the Gilroy Tourism Business Improvement District (GTBID). This zone would require hotels and motels within its boundaries to levy a two percent assessment on guests.

Those funds, which staff told the council during its meeting Monday night would total $190,000 annually, would go towards the Gilroy Welcome Center where they would be used for purposes such as marketing.

"The assessment revenue will provide for a sales and marketing plan with the primary purpose of increasing overnight room sales within the GTBID's boundaries," said Christina Turner, city finance director.

The assessment would be separate from the city's Transient Occupancy Tax , which sits at nine percent, Turner explained. GTBID lodging owners would be committed to assessing the levy for five years starting January 1, 2013 with the option to renew the GTBID for up to 10 years after that time.

The city would be reimbursed up to two percent of the collected assessments for administrative costs associated with collection and record keeping.

While GTBID businesses' would essentially be charging an extra assessment to guests, Turner said 69 percent of lodging owners who would fall into the zone have expressed support for the district.

Monday's resolution also approved a public meeting on the GTBID to take place August 6 at 6 p.m. and a public hearing for September 6 at 6 p.m.

Although he voted in favor of the resolution, councilman Peter Arellano said working on a tax or other proposal to help Gilroy kids and schools would "have been a lot better."

Mayor Al Pinheiro, who said he and Arellano have been butting heads recently, took issue with the councilman's statements.

"I wish I was running for mayor again so we could debate," he said. Arellano November 6. "What we did [last meeting] has nothing to do with what we are doing this week."

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