The process to create a special district to boost local tourism investment is difficult to navigate. But the payoff could be dramatic from the increased visitors and overnight stays that could be generated via a Tourism Improvement District (TID) being considered for the Quad Cities.
That was the message Tiffany Gallagher, vice president of operations for Civitas, delivered Wednesday, March 30, to about 50 area leaders and tourism officials gathered for The AccelerateVQC Meeting at the TaxSlayer Center in Moline.
Civitas, one of the nation’s leading special district consultants, has helped guide more than 100 of the 194 TID districts that have been created in 19 states across the country. The meeting marked the second presentation in the Quad Cities by Ms. Gallagher, a national expert on TIDs.
Both meetings were arranged by Visit Quad Cities, which has been exploring since November 2019 the creation of a TID to increase tourism spending. The reason, said Dave Herrell, the tourism destination marketing organization’s CEO and president, is so the Quad Cities regional destination can better compete in a marketplace that includes 80 other regional destinations in Illinois and lowa alone.
Two of those direct Illinois competitors, Peoria and Rockford, already are considering creating their own TIDs to increase their tourism investment to attract events, conventions and overnight stays, Ms. Gallagher warned the crowd.
The TIDs are modeled loosely on Business Improvement Districts (BID).
Under a TID, Ms. Gallagher said funding is raised through industry-imposed taxes and fees on hotel-motel stays, within a geographic area. In that way, it is like a bed tax and the organization is like a BID. But there is one major difference: The new dollars raised from the new TID assessment – and added to guests’ bills – must go directly to the district and cannot legally be diverted to other government uses.
Here’s how it works according to Ms. Gallagher’s presentation: Lodging owners collect TID room charges from guests and pay them to local governments, which then remit the funding to the designated destination marketing organization.
That process, Ms. Gallagher said, ensures a level playing field, with no free riders; transparency and reliability; and passes the costs through to customers. The process also calls for renewal every few years so if hotel/motel owners aren’t happy with the arrangement they can end it.
Given that Civitas reports a 98% renewal rate for such districts, Ms. Gallagher said “We know that they work.”
Civitas also knows well that creating a TID is a long and complicated process. That will be further complicated for the Quad Cities region, which straddles two states and multiple municipalities.
On the state level, for example, neither Iowa nor Illinois have passed laws that enable the creation of TIDs. Illinois, however, introduced such a bill in 2021 but it died in committee. Local leaders have said they hope a new law will be approved in 2022.
A number of local governments also will be required to hold public hearings and vote on the TID creation. But before any of that can happen, Quad Cities hoteliers and motel owners must sign onto the effort, a TID steering committee will have to established and stakeholders will have to create a plan.
If all goes well, Ms. Gallagher estimates it could take 12-24 months to make the process happen.
Mr. Herrell said following the March 30 event, “TID’s are proven. They work. And we need our hospitality industry to thrive.”
“Tourism creates local jobs so whatever we can do with our private and public sector partners and stakeholders to develop new tools for the Quad Cities we are going to pursue,” he added. “Tourism is hyper-competitive, and more and more communities are creating TID’s because of the return on investment and results they produce.”
Responding to a question from the crowd, Ms. Gallagher said “Where it doesn’t go right, is when communities are not in sync.”
On the plus side, she added, “I’ve never seen more support for these kinds of things than I’ve seen today.”
“TID’s are not a tax, and those that state that are completely off base,” Mr. Herrell said. “They take time, transparency, robust communication and collaboration and Visit Quad Cities is prepared to take that leap forward for the benefit of our community. We have too much hotel supply in our market and must have demand generators to induce visitation. This is also an opportunity to spark investment as we compete for visitors, talent, investment, and experience.”