City Eyes Possible Hotel Tax Increase

Hermosa Beach city officials are considering increasing the city's transient occupancy tax from 10 percent to 12 percent, according to the agenda for the Tuesday night City Council meeting. The 10 percent tax has been in effect since 1990.

City Council will decide Tuesday night if they'd like staff to draft a resolution  to place the increase on Council's July 23 agenda. If council supports the resolution, it would require a two-thirds approval vote from council.

If the hotel tax increase is approved by council Tuesday night and on July 23, the hotel tax would be placed on the Nov. ballot for city voters to decide.

The staff report for Tuesday night's agenda reports that the city would nearly $400,000 based on the 2013-2014 revenue estimate, according to the document. At the existing 10 percent tax rate, the revenue estimate for 2013-2014 is $2 million.

The potential tax increase is the result of council's May 21 budget workshop, at which council members asked city staff to bring forward new revenue ideas.

The city is expecting to receive a project application for a new beachside luxury hotel on the property currently occupied by Good Stuff on The Strand, Poop Deck, The Mermaid, Cantina Real, Pier Surf and Tiki Mon Creamery and Cafe, according to reports.

Provenance Hotels and Bolour Associates, Inc. purchased the land on May 31 for $19.5 million under the name of Strand and Pier Holding Company, LLC, and say their hotel will be completed in 2016.

Businessman and real estate agent Raju Chhabria, with partners, is in the process of building a 30-room boutique hotel downtown and expects to open in 2014.

Transient occupancy tax rates range from a low of 8 percent in El Segundo and 9 percent in Carson and Lawndale to a high of 14 percent in Santa Monica, Culver City, Beverly Hills, Inglewood and West Hollywood. Neighboring city Redondo Beach has a 12 percent tax in place and is considering an increase to 14 percent. Manhattan Beach has a 10 percent tax rate with authority to increase it to 12 percent, according to the agenda document.

The occupancy tax is placed on hotel guests staying in the city at accommodations for 30 days or less.

What do you think of the idea to increase the hotel occupancy tax from 10 percent to 12 percent?