A TPID is a specific type of public improvement district created under state law designed to enhance and promote tourism and hotel-related activities within a designated area. The primary aim is to fund enhanced marketing and sales initiatives which draw convention and group business to a city.
Recently, Addison’s Marketing and Tourism Department discussed with local hoteliers the possibility of establishing a TPID in order to be more competitive with area cities when soliciting group business. Dallas, Arlington, and Frisco have had TPIDs for several years. A total of seven cities across Texas have created TPIDs, and a number of other cities are considering the creation of their own TPIDs as well.
In 2019, the Texas Legislature amended state law to provide all Texas municipalities with the authority to create a tourism public improvement district within their city. A petition to create the TPID and the service plan must be signed by owners of over 60 percent of the total appraised value of hotels within the proposed district and one of the two following criteria:
60+% of the surface area of hotels within the district; OR
60+% of the number of hotels within the district
Addison and the Texas Hotel and Lodging Association held informational meetings with Addison hotels and did individual outreach. Support of the proposed TPID among the Addison hotel community is strong.
The Proposed Addison TPID Parameters:
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Hotels in Addison with 50 rooms or more will be assessed a 2.0% fee on all taxable hotel room sales.
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Any new hotels constructed after the creation of the District with 50 rooms will be added to the District pursuant to state law.
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The District Service Plan is for a 10-year period.
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Estimated to generate $12.6 Million during the 10-year period.
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The improvements funded by the TPID will be overseen by a non-profit management corporation, the Board of which will be composed of hoteliers within the district.
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TPID funds may only be used as set forth in the service plan and as provided under state law. State law restricts TPID expenditures to those relating to “advertising, promotion or business recruitment […] directly related to Hotels (Local Government Code Chapter 372.0035(e)).
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Addison tourism staff will serve as the administrative entity responsible for implementing the decisions and recommendations of the Addison TPID corporation Board.
The TPID assessment is collected under the same schedule and process now in place for local hotel tax collections. An annual budget and service plan will be implemented by Addison Marketing and Tourism under the oversight of the Addison TPID Board. State law requires that City Council review and approve the service plan annually throughout the term of the District.
Revenue from the assessment would be focused on four service categories: marketing (35%), sales (50%), administrative (15%), and tourism research (5%). A copy of the proposed service plan and petition are included with the agenda item. Once the Town approves of the service plan and petition document, petitions will be gathered from hoteliers within the proposed district. The Town may not edit the petition or the service plan once the petition drive has commenced. Once a complete petition is submitted to the Town, the Town will review it to validate the sufficiency of the signatures, and to determine whether the 60% threshold has been met.
After validation of the petition, the City Council will order two public hearings as required by state law to create the district, set the assessment rate, and approve assessment roll.
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