Hollister officials are weighing whether to use transient occupancy tax revenue to help local hotels finance new construction or refurbishment projects.
Council members at their 6:30 p.m. Monday meeting at Hollister City Hall, 375 Fifth St., are set to consider the new program with the use of TOT funds. Voters in November will decide whether to increase the city’s hotel tax from 8 percent to 12 percent as well.
A staff report for the item on Monday’s council agenda mentions the city has four overnight lodging establishments and that studies have shown demand for increased hotel inventory here, especially in light of having Pinnacles named a national park and the revival of the Hollister motorcycle rally.
Investors interested in building lodging businesses in Hollister, though, have experienced difficulty obtaining adequate financing.
According to the agenda item:
The city would sign a participation agreement pledging 50 percent of TOT revenue received by the city from the business on an annual basis if the lodging establishment – or a new motel/hotel – is willing to invest at least $1 million in refurbishing projects. Each deal would include a maximum term of 15 years and a contribution cap from the city of $1 million as well.
The program’s goal is to have those businesses use the pledge of future TOT revenue to help them secure financing, according to the staff report.
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