Costa Mesa Creates Agency to Promote Arts, Tourism

The Costa Mesa City Council voted early Tuesday to create a new agency intended to provide continuous, stable funding for the arts and tourism that city officials say could substantially increase cultural subsidies.

At a regular meeting, the City Council voted unanimously to establish the Costa Mesa Tourism, Arts and Promotion Council, a nonprofit public corporation to be run by a five-member volunteer board of Costa Mesa residents yet to be named.

“I am confident we can come up with (a structure for the corporation) that one, promotes hotel-motel business, and two, provides greater support for the arts,” Mayor Peter F. Buffa said at the meeting.

“The whole intent of this was not to have arts grants dependent on what we can squeeze out of the general fund and to increase arts funding,” he added in an interview.

Even while sharing funds with the tourism industry, the agency, initially conceived to address a rise in requests for arts subsidies, “will amount to substantially more for the arts,” Buffa said.

Current municipal arts subsidies are generated through a 6% transient occupancy tax, also known as a bed tax, imposed on hotel and motel guests. These monies however, drawn from the city’s general fund, are subject to spending restrictions imposed by the 1979 Gann initiative. These tax revenues are also used to fund other city expenditures.

Financing for the new agency is to be raised through a proposed 6% visitor-service fee that would replace the hotel bed tax. This money will not be part of the general fund and would therefore be free from Gann-initiative restrictions and would be earmarked exclusively for arts and tourism, city officials said.

The agency’s fee could generate as much money as the hotel bed tax does annually, Buffa said. Last year, bed-tax revenues from 36 area hotels totaled more than $2 million, and city arts grants to 11 groups and one cultural event totaled $159,000, the officials said.

A vote to establish the visitor-service fee is scheduled for Aug. 21. Revenues from the fee would have to benefit the tourist industry, but details about how these revenues will be used--if indeed the fee is enacted--have not been decided.

Once the visitor-service fee is resolved, the agency will not be in operation for at least one month, the time it will take to have its nonprofit status certified by the state.

The council on Monday postponed a vote to determine critical details of how the overall agency will function, such as what sorts of cultural events or groups will be funded, after arts administrators voiced worries that its initial guidelines were too vague or did not sufficiently stress support for the arts.

“The arts are addressed in the title of the agency, but nowhere else” in the guidelines, said Debra L. Steckel, annual fund director for South Coast Repertory. “We would like to see that more specifically addressed.”

Vice Mayor Mary Hornbuckle agreed: “My understanding was that the intent of the corporation was to provide a continuous, stable source of arts funding. But (the guidelines) could mean almost anything.”

The new agency won backing from hotel representatives during Monday night’s marathon meeting that stretched past 2:45 a.m.

“It is very encouraging to see the council put forth funding and support for arts and tourism,” said Michael J. Deighton, general manager of the Westin South Coast Plaza hotel.