La Jolla merchants hear industry plans to ease vacation rental woes

Board approves $527,460 BID budget for fiscal year 2015-2016

La Jolla Village Merchants Association online: lajollabythesea.com

The La Jolla Village Merchants Association (LJVMA) heard a presentation by representatives of San Diego’s vacation rental industry Jan. 14, who are proposing a permit fee for vacation rental operators.

After grappling with the issue of short-term vacation rentals at length last year, the La Jolla Community Planning Association (LJCPA) asked the city to increase enforcement of vacation rentals. Some residents are frustrated with loud noise, trash and parking issues resulting from private residences that are rented out for short durations and sometimes used for private parties.

Lucas Murdock of the San Diego Vacation Rental Managers Alliance (SDVRMA) said his association is following up on its pledge to the LJCPA to create a system of stronger self-regulation within the industry, and to work with the city to institute a permit fee for vacation rental operators that will be used to increase enforcement, “giving the existing programs some more teeth to hold owner-operators more accountable.”

Murdock said the permit fee would generate revenue that will “ideally go directly to enforcement for better community planning and good neighbor laws and noise abatement laws. We do have (regulations) in place, but they’re not very effective.”

The proposed permitting process would also allow residents to easily discover who the owner-operators of vacation rentals are, so they can contact them directly should problems arise, he said.

“The second component of that is a penalty system so that if there are violations confirmed, there’s sort of a tiered program where (the owner) would be fined, and then risk losing their permit if it’s a consistent issue,” Murdock said, adding there are currently 462 residences listed as short-term rentals in La Jolla.

“Those are guests of ours coming into town, going to your restaurants, going to your shops, buying goods and spending money in the community,” Murdock said.

La Jolla’s short-term rentals generate $4.4 million in transient occupancy tax for the city’s general fund annually and, according to a study commissioned by the short-term rental industry, an estimated $39 million in revenue for businesses in La Jolla each year (or $312 million citywide).

Doing the math, LJVMA board member Richard Walker said, “That’s $85,000 per residence per year (in La Jolla spending). That’s phenomenal if that’s true.”

Jonah Mechanic, founder of La Jolla-based SeaBreeze Vacation Rentals, said the firm the industry hired to do the study used figures provided by the San Diego Tourism Authority, based on an average 5.5 visitors per rental, per stay.

LJVMA trustee Elsie Arredondo and vice-president James Niebling said they would like Murdock and Mechanic to return with a copy of the report and more statistics.

Fortune agreed the LJVMA board would benefit from understanding how those numbers were calculated before it takes any potential action to support the industry’s plans.

“I would suggest you consider coming back and doing a more in-depth presentation.

“I’d like to see more of the stats that you quoted and sources,” Fortune said, questioning whether vacation rental operators are paying their business tax certificate fee, which businesses in the Village of La Jolla are assessed annually to help fund the LJVMA’s mission to boost business in the area.

Elizabeth Studebaker, the mayor’s Business Improvement District advocate, later told La Jolla Light vacation rental operators in La Jolla do not pay BID fees.

“Hotels, motels and bed and breakfasts are paying the BID assessment through the rental tax,” Studebaker reported, via e-mail, adding, “No property classified as single-family residential and paying rental tax is being assessed a BID assessment.”

However, she said operators of short-term vacation rentals (defined by the city as any stay of less than one calendar month) are required to pay an annual rental unit business tax (assessed on all residential rental properties), as well as a Tourism Marketing District assessment and the city’s Transient Occupancy Tax (TOT). (Murdock said that the collection of TOTs has been limited, due to a lack of city resources for collection).

In other Merchants Association news

Budget approved: The LJVMA board approved the association’s budget for the upcoming fiscal year, which begins July 1.

The nonprofit business improvement district (BID) group expects to have $527,460 in income, including $180,000 in annual bid fees assessed on merchants, $105,060 from subleasing its Visitor Information Center on Prospect Street, $44,000 in grant funding, $15,000 from revived Haute La Jolla Nights or new First Fridays events, and $22,500 from a planned La JollaOpoly game. It’s projected expenses are $494,920 and include $177,270 in office and administration (including rent), $160,000 in employee wages and benefits, $47,500 for design and beautification projects, and $43,000 for special events.

Board member feted: LJVMA board member Leon Chow will receive La Jolla-based Prince Chapel by the Sea African Methodist Episcopal Church’s “Pillar of Light” award during the congregation’s third annual ceremony, 7 p.m. Thursday, Jan. 29.

The event honors people who have made an impact on their community, and will include guest speakers and gospel music.

Chow is co-owner of C&H Photo on upper Girard, a member of the Kiwanis Club of La Jolla and La Jolla Elementary School’s Technology Committee, and helps organize several community events throughout the year.

“He’s one of those people who’s always behind the camera taking the picture, but people don’t often realize how much he does around the community,” said Prince Chapel’s Pastor, Chuck Norris.

Also being honored this year is Sharp Hospital cardiologist and researcher Dr. Bob Gillespie. The event will be at the Congregational Church of La Jolla, 1216 Cave St. (princechapelame.org)

Special partnership: LJVMA will partner with Special Olympics Southern California and UC San Diego when the organization hosts its World Games, July 25-Aug. 2 in Los Angeles. The campus will host some of the 7,000 competitors traveling to Southern California from around the globe for the event.

Special Olympics Southern California president and CEO Bill Shumard said the 45-year-old institution, which provides sports competition for intellectually challenged athletes, is the world’s largest sporting organization, offering 5 million athletes around the world “courage, dignity, joy, respect and inclusion.”

San Diego and La Jolla have been chosen as host towns, in which residents cover all expenses for competitors’ food, lodging and recreation during a three-day stay.

“We are partnering with UCSD, which is where the athletes and their delegation will be staying,” Fortune said of the LJVMA’s involvement. “We will be working with the museums and different cultural opportunities to show them La Jolla.”

Free marketing group: Rita Moore, La Valencia Hotel’s director of sales and marketing, discussed the LJVMA’s new Village Marketing Collective, which she is spearheading with assistance from Heather Vrana of the La Jolla Village Information Center.

The free, brown-bag lunch group is open to La Jolla merchant members. It meets 11:30 a.m. the third Tuesday of the month at La Jolla Library, 7555 Draper Ave, to discuss marketing strategies and best practices for merchants.

“Our vision is to provide a platform where current members of the La Jolla Village Merchants Association can gather to learn marketing, promotions, special media skills and ideas to support their unique businesses and create a shared vision for the Village of La Jolla,” Moore said. More at marketing@lajollabythesea.com

Small business loans: LJVMA also heard from Valery Belloso, business development officer of Accion, a nonprofit, San Diego-based micro-lender that provides small business loans of up to $75,000 for inventory, expansion or other business purposes.

“We work with a lot of start-ups (and) … individuals who may have had some challenges, either with mortgages, bankruptcies or some credit challenges in the past that make it difficult to seek that traditional bank financing,” Belloso said.

“Ultimately, the goal is to help you get to a point where the business is strong enough and viable enough to be able to get that traditional financing down the line.” (accionsandiego.org)

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