Report concludes project will generate annual revenues of $3.0 million to $4.1 million
An independent report, commissioned by the City of Pacific Grove, was prepared and delivered to the City on April 6, 2016 by Applied Development Economics (ADE). The report is intended to estimate the potential cost/revenue balance for the City government of the proposed Hotel Bella project. The analysis evaluates the proposed project at full development and operation and compares the resulting tax revenues and City service costs to the existing retail use in the American Tin Cannery Building.
Prior to preparing the report, ADE met with City staff and received data from local authorities in the tourism industry, including the Monterey County Convention and Visitor Bureau, the Monterey Bay Aquarium and the Pacific Grove Chamber of Commerce.
In the report ADE estimates a high and low range of City revenues and costs depending on what level of market performance is achieved. At full operation the report concludes the project would generate $2.5 to $3.6 million in annual Transient Occupancy taxes (TOT) for the City of Pacific Grove. The report states the project would also produce $443,100 in annual property taxes and between $209,400 and $294,000 in annual sales tax, depending on how much ancillary shopping the hotel guests do in Pacific Grove.
The project would be replacing an active retail use on the site and according to the report it is anticipated that there would be very little increase in City service demands from the proposed project. In addition, while there may be an increase in calls for service for certain City functions, no City departments would need to add staff to address the service increase.
The report states the net fiscal effect of the project would be an annual surplus of General Fund revenues of $3.0 million to $4.1 million. In comparison, the existing retail use is estimated to produce net revenue of about $301,100 per year. The proposed project would increase City General Fund revenues by at least 16 percent while increasing City costs less than two percent.
The full report is also available on the City of Pacific Grove website: http://www.cityofpacificgrove.org/living/community-economic-development
PDF link to full report: http://tinyurl.com/gr7p2hv
