1. City Council meeting July 11, 2016, Item 15
Amendment to Operating Agreement between the City and the Pasadena Center Operating Company establishing a maximum amount of Transient Occupancy Tax (TOT) revenues to be transferred to the PCOC annually
City Council meeting
July 11, 2016, Item 15

2. Pasadena Center Operating Company
PCOC serves as managing agent for Civic Auditorium and conference center
Pursuant to Municipal Code Chapter 2.165
Operating Agreement 12,380-2
Current provisions provide that PCOC receives
60% of Base TOT (first 10.18%)
100% of Incremental TOT (>10.18% %)
No current contractual cap
Other provisions not being followed: annual payment of net revenues to City and exemption/reimbursement for state and local taxes

3. New and potentially new hotels
dusitD2 Constance Hotel
Residence Inn
Opening soon
Hyatt Place
At Paseo
Kimpton/YWCA
Hill & Colorado – potentially two
Northwest corner
Southwest corner

4. Goal & Approach
Implement a cap on total annual amount of TOT transferred to PCOC to provide for additional General Fund revenues
Working cooperatively with PCOC GM and Board Chair
Ensure PCOC’s ability to meet debt service and operational needs and maintain first rate facilities
Eliminate provision of Operating Agreement dealing with payment of net revenues to City
Operationalize agreed upon exemption for local and state taxes

5. Proposal Maintain current split 60% of base and 100% of increment
Establish a cap equal to annual debt service for expansion project + $500k for maintenance, repair, capital and/or debt service
Address other elements of Operating Agreement
Payment of net revenues to City
Exemption from state and local taxes
Approved by PCOC Board on June 22nd
Agreement to review the amendments in two years time (July 2018)

6. Possible TOT revenue growth

7. Recommendation
Find that the proposed action is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA guidelines section 15061(b)(3), the General Rule; and
Approve an amendment to Operating Agreement 12,380-2 between the City of Pasadena and the Pasadena Center Operating Company (“PCOC” or “Center”) that: (1) establishes a maximum amount of Transient Occupancy Tax revenues to be transferred to the PCOC annually; and, (2) removes the requirement that PCOC pay the City its net revenue, as further described in this report; and
Request the PCOC Board of Directors to approve the same consistent with the PCOC Board action of June 22, 2016.