Agenda

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Item # 11.

Work Session and Regular Meeting

Meeting Date:	03/26/2019
Department:	Public Works

AGENDA CAPTION:

Present, Discuss, and Consider Action on an Ordinance Amending Chapter 22 - Businesses, of the Code of Ordinances by Adding Article IX, Hotel/Motel Maximum Exemptions from the Payment of Hotel Occupancy Tax, in order to Set a Cap on the Number of Room Nights that May be Exempt from the Payment of Hotel Occupancy Tax.

BACKGROUND:

Addison currently has twenty-three hotels. Over the years, the City Council has held numerous discussions regarding both the future of hotel development and the performance of the existing hotels, specifically those that may not meet the community's expectations. Since 2017, the City Council has held a series of Work Sessions where they defined four areas of concern:

Revenue
Zoning Compliance
Code Enforcement
Public Safety

Additional discussions were held to determine what, if any, action the Town should take when hotels are not meeting expectations in these areas. In addition to a number of staff actions related to code enforcement and public safety, Staff has noted that certain hotels are providing long-term housing accommodations rather than short-term hotel stays. This activity is enabled, in part, by the fact that hotels are not required to collect Hotel Occupancy Tax on stays of longer than 30 days. By providing long-term housing, hotels are circumventing zoning requirements for housing developments and occupying hotel rooms that are intended to support Addison's important business and tourism industries.

In response, Staff is proposing to establish a business regulation that would require hotels to operate so that no more than 30% of room nights may claim the permanent resident exemption. Based on a preliminary review of Hotel Occupancy Tax information, it appears that all but two existing hotels in Addison, Budget Suites of America and Residence Inn, currently operate in compliance with the proposed requirement. If adopted, any hotel that operates in violation of these requirements is subject to a fine of up to $500.00 per occurrence. If a hotel continues to operate in this manner for three months within a twelve month period, the City Council may hold a hearing and revoke the hotel's certificate of occupancy.

RECOMMENDATION:

Administration recommends approval.

Attachments
Ordinance - Hotel Business Regulation - Exemption Cap