Title
Consider approving Resolution No. 2024-232 authorizing the City Manager to execute an Economic Development Agreement in the amount of $112,500 with Southwest Airlines; and take appropriate action.
Body
REQUESTOR:
Economic Development, Tourism, and Planning Department
BACKGROUND:
The hotel owner, operator, or manager (bed and breakfasts, condominiums, apartments, and houses) must collect a hotel occupancy tax for any space costing more than $15 a day (local is $2 or more). Hotel/Motel is not charged to anyone staying at any one of these locations for longer than 30 days (the first 30 days are paid but exempt after). The State charges 6% of total room receipts, including taxable receipts. The City charges 7% of just room receipts (not food or beverages that hotels/motels charge).
The incentive encourages companies to come and stay at Farmers Branch hotels so the City can benefit from the tax and tourism.
Southwest Airlines intends to reserve approximately 7,455 hotel room nights during the 2024 calendar year and desires to reserve an additional 20,000 hotel room nights during the 2025 calendar year in specific hotels located in Farmers Branch to support its Southwest Airlines training program.
DISCUSSION:
The City of Farmers Branch offers corporate loyalty incentives to large corporations, which will bring an increase of up to $80,000 to the City after paying the incentive. The total hotel/motel tax will be collected over $190,000 for the number of nights if this agreement is approved.
FISCAL IMPACT:
Unbudgeted Financial Impact to the Hotel/Motel Fund of $112,500.
DISTRICT:
Citywide
POSSIBLE COUNCIL ACTION:
1. I move to approve Resolution No. 2024-232 as presented.
2. I move to approve Resolution No. 2024-232 with modifications.
3. I move to table the issue for further study or take no action.
ATTACHMENT(S):
1. Resolution No. 2024-232
2. Economic Development Incentive Agreement