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HomeMy WebLinkAbout10/5/2005 - STAFF REPORTS (23) OF PALM SA U C, �`aRn C-It/FOVV� 'x City Council Staff Report DATE: October 5, 2005 NEW BUSINESS SUBJECT: APPROVAL OF SPONSORSHIP OF THE SENIOR SOFTBALL WORLD SERIES BIDS FOR 2006 FROM: David H. Ready, City Manager BY: Department of Parks and Recreation SUMMARY Staff is seeking approval from City Council to submit a bid proposal in an amount not to exceed $35,000 to the North American Senior Circuit Softball (NASCS) to consider having Palm Springs host the 2006 Senior Softball World Series (SSWS)Tournaments. The City of Palm Springs successfully bid on and hosted the SSWS in 1995 and 1998. The City's former Finance Director estimated the impact of those tournaments to be over $100,000 in direct TOT revenue to the City, with a community-wide impact of about $2.8 million in gross sales. Projected revenues, for the 2006 event based upon conservative hospitality association estimates and the Finance Department's evaluation of previously hosted events, indicate that there is a net TOT and sales tax gain of between $29,000 and $65,000 to the City, while the estimated overall economic impact to the local economy is about $2 million to $2.8 million. RECOMMENDATION: 1. Adopt Resolution No. "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS CALIFORNIA SUPPORTING THE SPONSORSHIP OF THE SENIOR SOFTBALL WORLD OF SERIES FOR 2006." STAFF ANALYSIS: NASCS is a Michigan based nonprofit, 501(C)(3) organization founded in 1985. NASCS previously produced the SSWS Tournament in the City of Palm Springs in both1995 and 1998. The minimum acceptable bid by NASCS to host the SSWS is $50,000. Of the $50,000 bid, $35,000 will be coming from the City of Palm Springs and the remaining $15,000 is pledged by Palm Springs Riviera Resort and Racquet Club, which assists the City in reducing its costs. //�� Item No. 5 *A o NASCS is an independent softball association and is the producer of the SSWS. NASCS strives to be the premier organization for senior softball throughout North America and through its production of the SSWS. NASCS does not "sell' its tournament to host organizations and it independently organizes, directs and produces the tournament in conjunction with the host community. The SSWS is now in its 171h year. The organization conducts 15 Regional Tournaments each year and draws over 120 teams to the world series. The organization has teams in 35 states, the District of Columbia and four Canadian provinces. Attendance is expected to be between 140 -160 teams, depending upon how many qualify from the regional finals. Each team has an average of 18 players per team. The tournament is segmented into two groups of players, men 65-80 years forthe first five-day segment and both men and women in the 50-60 age group for the second five-day session.With the total tournament duration of roughly 10 days,staff has projected a room block at various resorts and hotels to be roughly 4,300 per year. Based on an analysis of Tax and Economic Impact report prepared by former Finance Director Tom Kanarr, in 2000, the direct tax benefit from both sales tax and TOT to the City was estimated at$100,373, while the total economic benefit to the community was calculated at $2,862,675 as shown below. Economic Tax 2000 ANALYSIS Benefit Benefit Number of teams: 150 Number of players/guests: 4,590 Percentage staying in P.S. hotels: 88% Average length of stay: 5 nights People per room: 1.9 Expected room nights: 10,629 Average daily rate: $75 Hotel rental $ 797,175 TOT collections (@10%) $ 79,718 Avg. spending (daily/per person): $90 $2,065,500 Sales Tax (@1%) $20,655 TOTAL $2,862,675 $100,373 A current analysis by Ed Svitak, Vice President, Sales & Marketing, Palm Springs Rivera Resort and Racquet Club, estimates the direct tax benefit for the City to be $64,852, with the total economic benefit to the community of approximately $2,200,000 as shown below. Economic Tax 2006 SSWS Benefit Benefit Number of teams: 150 Number of players/guests: 3,825 Percentage staying in P.S. hotels: 70% Average length of stay: 4 nights People per room: 1.9 Expected room nights: 5,640 Average daily rate: $85 Hotel rental $ 479,400 TOT collections (@10%) $ 47,940 Avg. spending (daily/per person): $90 $1,721,250 Sales Tax (@1%) $17,212 TOTAL $2,200,650 $64,852 As noted in Mr. Svitak's figures, the average daily rate (ADR) shown is slightly higher than the City's estimate in 2000, the number of players has been adjusted downward to account for players staying in adjacent cities and the length of stay is more conservatively reported. Even with the much lower and more conservative estimates, the event still generates revenue to the City of Palm Springs in excess of their $35,000 contribution. The recommended action requests the City Council approve the Sponsorship and submission of a bid proposal. Staff will return to the City Council for approval of a final contract. FISCAL IMPACT: A total of $35,000 has bp4n allocated in the current Community Promotion Fund budget in Account 112-2618-45649,SeniorSoftball World Series,to coverthe City's cost. The projected tax revenue to the City from combined TOT and sales tax is estimated to be between$64,852 and$100,373 forthe event. Despite the City's bid contribution of$35,000 per year, staff estimates the NET tax revenue to the City to be between $29,852 and $65,373, while the total economic benefit to the community is estimated to be between $2,200,650 and $2,862,675 per year. Scott`Mikesell, Director David H. Ready, City Maw r Department of Parks and Recreation Attachments: Proposed Resolution RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA SUPPORTING SPONSORSHIP OF THE SENIOR SOFTBALL WORLD SERIES FOR 2006 WHEREAS, the City Council desires to obtain community events that bring a positive impact on the City; WHEREAS, the 2006 Senior Softball World Series would support the mission of the City Council and the tourism industry; WHEREAS, the City Council has appropriated $35,000 in the Fiscal Year 2005-06 Budget to sponsor the 2006 Senior Softball World Series. THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Support the Sponsorship of the 2006 Senior Softball World Series in the City of Palm Springs. SECTION 2. Authorize the City Manager to submit a bid proposal to the North American Senor Circuit Softball Association for the City of Palm Springs to be a sponsor of the 2006 Senior Softball World Series in an amount not to exceed $35,000. ADOPTED THIS 5th day of October, 2005. David H. Ready, City Manager ATTEST: James Thompson, City Clerk Resolution No. Page 2 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. _ is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on October 5, 2005, by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California