Laguna Hotels May Infuse Arts

The Laguna Beach Visitors Bureau wants local hotels to increase their bed tax and use the proceeds to benefit the painters, poets, playwrights, performers and other creative types who shape the city’s personality.

Mayor Paul Freeman, who plans to present the proposal to the City Council on Tuesday, said it would increase off-season tourism by lengthening a cultural calendar that now revolves mainly around the eight-week summertime Festival of the Arts.

In a city that proclaims itself as artist-friendly but nearly lost possession of the highly popular Festival of the Arts to nearby San Clemente last year, Freeman said a marriage between the hotel industry and art community would send an important message.

“I think we brag about being a city of the arts,� he said. “At the same time, there is no dedicated revenue stream for performing arts, for culture, for public art. And now there can be. And it’s not even at our own expense. So I think this is huge in that context.�

Under the proposal, a special business district would be created encompassing the city’s 26 hotels, motels, inns and bed and breakfasts. Each of the establishments would agree to raise their bed taxes from 10% to 12%.

The new rate would be the highest of any coastal city in Orange County. But it would remain lower than Anaheim’s 15%.

Technically, the tax would be self-imposed, allowed under state statutes enacted in 1989 that authorize cities to levy assessments on businesses to promote economic revitalization and tourism, among other things.

The Laguna Beach City Council would have to set up a special election, and a majority of the community’s hotel owners would have to approve the tax increase.

The idea is new in Orange County but not elsewhere. Bonnie Hall, executive director of Arts Orange County, a nonprofit arts council, cited San Diego and San Francisco as two cities that apportion bed taxes to the arts.

Freeman, who has been discussing the notion for more than six months in informal meetings with hotel officials and arts activists, says the tax would initially generate $640,000 a year. That amount would double once the Treasure Island resort is complete.

Half the new funds would go to the Visitors Bureau, to market Laguna Beach as a destination for cultural tourism. The city Arts Commission, Art Institute of Southern California, Laguna Art Museum and Laguna Playhouse each would get $80,000. The $157,000 a year that the Visitors Bureau already gets from the city would go back to the city, to be used for the arts or other critical needs.

“This is one of those rare, serendipitous opportunities to do something of truly broad public benefit,� Freeman said. “It creates a dynamic between the hotel industry and arts groups to collaborate.�

The proposal has a clear opponent in City Councilman Wayne Baglin, who says the city should not use taxes to effectively subsidize hotel advertising, through the Visitors Bureau, or provide operational funds for nonprofit organizations. He said increased tax revenue could be devoted to other pressing needs such as improving the city’s storm drains and increasing funding to the police and fire department.

“We may need to use an increase in the bed tax funds just to pay for essential services in Laguna Beach,� he went on. “We should be saving that for a rainy day.�

But arts supporters are embracing the proposal.

“It sounds exciting,� said Alan Barkley, director of the Art Institute, a four-year college with 260 full-time students from around the globe. “I think the hotels who’ve discussed this have to be credited for being very imaginative for supporting the arts of Laguna, which are sort of the hallmark of the city itself.�

Linda Dietrich, chairwoman of the Arts Commission, echoed those sentiments, saying the funds would go a long way to helping the hodgepodge of arts programs the commission has been trying to support on a budget of $14,000 a year, not including special grants.