It has been a landmark year for the North Lake Tahoe Resort Association. The entity — which was founded in 1954 as the North Lake Tahoe Chamber of Commerce and later joined forces with the North Tahoe Visitors and Convention Bureau in 1995 — is not only shifting its funding structure but its basic mission.
“Traditionally, the NLTRA has been a destination marketing organization, and we’re becoming a stewardship organization,” said Tony Karwowski, who was announced as the NLTRA’s president and CEO on Jan. 31. “These two things [stewardship and marketing] are symbolic because they need each other to function. We need to get the messaging out there about how both residents and visitors can share ownership of what is ultimately going to create a sustainable experience in North Lake Tahoe.”
Karwowski’s leadership comes six months after the association made a significant step towards this transition by establishing the North Lake Tahoe Tourism and Business Improvement District (NLTTBID) or TBID, which is estimated to bring $6 million annually to the region located within the eastern portion of unincorporated Placer County.
TBIDs have a more than 30-year history with iconic California tourism destinations. The first-ever TBID was established in West Hollywood in 1989, and more than 100 California destinations have followed suit, including Truckee.
And North Lake Tahoe is about to join that list, with the NLTRA just two fiscal quarters away from being fully switched over to TBID. This means their mission of funding projects with a lens of sustainability and stewardship will both come to fruition and be put to the test.
To learn more, we spoke to Karwowski about the nuances of the organization’s TBID, what exactly we’re voting on with Measure A in the June election, and what the future of North Lake Tahoe looks like through the eyes of the NLTRA.
For much of its history, the NLTRA has been funded by transient occupancy tax (TOT). What does this shift in funding structure look like, and what is the difference between TOT and TBID?
The NLTRA is transitioning from being funded by the transient occupancy tax (TOT) and is now being funded by a Tourism Business Improvement District (TBID).
Formerly, we were funded by about $4 million annually of TOT, which is generated from overnight short-term stays in our community — both in short term rentals and hotels. It’s a lodging tax that traditionally funded our marketing and sales program here at the NLTRA.
So a TBID is an assessed fund that goes out to lodging, restaurant, retail, activities, and attraction businesses in North Lake Tahoe. The fund generates a 1% assessment from all those businesses. Except in Zone 1, which is roughly the lakeside communities from Homewood to Kings Beach, there is an extra 1% on the lodging facilities, so they are paying 2%.
This shift gives the NLTRA an annual assessment collection of about $6 million. So we’re up $2 million from our previous budget. The marketing and sales program still gets roughly the same amount of money, but now we’ve got an additional bucket of funding that is split up into eight different categories that we can now distribute back into the community for things like tourism impact mitigation, workforce housing, and transportation.
Those TOT funds that previously funded the NLTRA have now been freed up. Through an agreement with Placer County, the NLTRA will convene a committee called the TOT Workforce Housing and Transportation Committee to put those dollars back into projects and programs that support improvement in workforce housing and transportation regionally. So that’s a $4 million annual bucket that the committee will be looking at and recommending projects to the [Placer County] board of supervisors for approval.
When will the NLTRA begin using TBID funds, and what committees were established to help allocate these funds?
We started collecting business assessment funds in July 2021, and as of April 1, 2022, by design, the NLTRA is operating off of those TBID funds. So we’re no longer operating exclusively off of TOT funds. It’s a big moment of transition. In order to do that, our management district plan, the guiding document for the TBID, required that we stand up two committees, which we did this month. One is called the TBID Advisory Committee, and the second is called the TBID Zone 1 Committee.
Zone 1 is the separate geographical region of the lakeside communities from Homewood to Kings Beach, and they pay an extra 1% lodging tax into the TBID. So there’s an actual committee that oversees that 1% of extra lodging assessment and gives direct input to the NLTRA Board of Directors on spending of Zone 1 money. The TBID Advisory Committee also advises the NLTRA Board of Directors on spend, budget items, and projects.
That’s the big key between being TOT funded and being TBID funded. The final decision maker in all of the TBID spend is now the NLTRA Board of Directors. Whereas under TOT, the Placer County Board of Supervisors is the final authority on the spend.
The TBID was established in July 2021, but the NLTRA just began operating off those funds last month. Has the NLTRA been able to allocate any TBID funds yet?
The board has allocated funds for operations at this point. We have not allocated funds for projects as of yet. We do have Q4 funds to spend on some projects here. The fiscal Q4 will be the first quarter we operate [fully] under TBID. So we have an appropriate amount of money — one quarter’s worth — for funding projects in the area. This could be anything from tourist impact mitigations to workforce housing and transportation solutions.
We have a TOT request in for our board to [recommend] TOT funds for a workforce housing project we’re calling Lease to Locals and works in the way that the Town of Truckee is working with Landing Locals to incentivize current homeowners to rent to locals.
About 15% of the annual TBID budget goes to business advocacy, economic development support, transportation, sustainability, and tourist mitigation. What are some of the longer-term projects TBID will fund that fall into those buckets?
The great thing about the TBID is that it has a wide range of buckets we can pull from. It can be anything from increasing the frequency of our existing public transit system to lobbying for increased air service into the Reno-Tahoe International Airport. We can create programs that reduce congestion during our peak periods. For instance, something like supporting a program to [implement temporary] three-lane roads [using the shoulders] on Highway 89 and Highway 267 during peak periods.
It looks like about 50% of the TBID annual budget will go to marketing. With the organization’s new focus on stewardship, how will the NLTRA market sustainable tourism to visitors?
Correct, 52.2% of our annual budget will go to marketing, events, and promotions. A lot of events in this category are things like supporting Spartan Race and Tahoe Trail 100, these large events that come during non-peak periods that fill in visitation. These events are a great example of filling visitation when we need it the most — off-peak and mid-week. They can create a more steady and well-rounded economic impact from tourism for our community.
And we want to change how we message the guests, so that during peak periods we aren’t generally going to say, “Hey this is when you need to attract tourism to North Lake Tahoe.” The messaging is going to be about stewardship, sustainability, and outreach to the people who are coming here so we can prepare them how to travel responsibly in our region.
What will the popular weekend of July Fourth look like under this new model?
Even though it’s in a peak period, we will continue to support [the event] because the people who come to our community, and the community in general, expect us to provide a Fourth of July celebration. So what we decided to take a look at — with our flag firmly planted in the ground on stewardship and resource management — is a drone performance. We found that these performances cost just about as much as traditional fireworks and they are, environmentally, way more friendly. There is almost no impact on the lake, on air quality, no auditory impacts on animals in the region, and they remove the potential risk of wildfire.
Switching gears back to TOT and Measure A, which is on the ballot in June. Can you explain the history of this tax on the Placer County ballot?
In 1996, the residents of Placer County voted to install an additional 2% tax to the countywide 8% TOT tax that would go back to infrastructure and tourism-related projects in eastern Placer County. The additional 2% tax re-upped in 2002 and 2012, so this is a 10-year re-up. However, there is no sunset this time, it doesn’t need to be renewed again [if passed] and can only be repealed.
If Measure A does not pass, the region will lose $4 million in annual project improvement funding and matching project funding. The $4 million in freed up TOT funds generated by the TBID currently set to fund workforce housing and transportation projects in the region would be jeopardized. The annual impact of locally controlled self-help project funds would amount to tens of millions of dollars in lost opportunity and locally prioritized projects that improve infrastructure, quality of life, and sustainability of our community.
This Q&A has been edited for length and clarity.