Farrell’s Backing Gives Lift to Bed Tax Proposal : Finance: The plan calls for using a portion of funds raised to promote tourism in San Pedro.

A plan to use a portion of hotel bed taxes collected in San Pedro to promote tourism in the waterfront community cleared its first hurdle Monday, winning strong support from Los Angeles Councilman Robert Farrell, chairman of the Community and Economic Development Committee.

The proposal, conceived by the San Pedro Peninsula Chamber of Commerce and supported by harbor-area Councilwoman Joan Milke Flores, would redirect to the chamber’s Tourism Council 9% of hotel transient occupancy taxes collected by the city.

Chamber of Commerce officials, who had waited months for a hearing on the matter, were elated and surprised at Farrell’s enthusiastic endorsement of the idea.

“It’s great. We didn’t anticipate he would take such a strong interest in this,” said Leron Gubler, executive director of the chamber. “Getting it through the whole council may be another story.”

Farrell, the only committee member present Monday, not only approved the concept of the program, but also extended the length of the proposed pilot project from two to five years.

A City Accounting Office official and a legislative analyst told Farrell that giving the money back to San Pedro would cut into funds needed for vital city services. But Farrell agreed with arguments by chamber representatives that the plan could potentially put more money in city coffers by bringing more tourists to the area, thereby increasing tax receipts.

As chairman, Farrell was able to approve the motion without the consent of the other two committee members. Without full committee approval, however, the proposal will require a two-thirds vote of the council. If the measure had cleared the full committee, it would have required only a simple majority.

Farrell said the issue could come before the full council within two months.

Los Angeles annually collects about $70 million through a 12% hotel transient occupancy tax. Almost 60% of that money is used to improve public safety, public works and recreation citywide. No money is earmarked for local entities.

About $6 million is given to the Greater Los Angeles Visitors and Convention Bureau, which spends it to promote tourism. However, the bureau does not divide up taxes to highlight specific areas, such as San Pedro, and uses the money instead to showcase the entire city.

In 1988, chamber officials say, $386,000 was collected by the city in hotel bed taxes in San Pedro. But with the opening of several new, large hotels, chamber officials anticipate that San Pedro could contribute nearly $1 million in bed taxes to city coffers. The chamber wants to spend 9% of that, potentially as much as $90,000, just promoting the San Pedro area.

Gubler told Farrell that the bed tax money would be used to produce promotional videos, print brochures and attend travel industry trade shows.

San Pedro has seen the loss of thousands of blue-collar jobs in the last decade at shipyards and canneries, many of which have closed, and the chamber is promoting tourism as the economic hope of the future. Echoing the arguments that inspired the chamber to propose the bed tax idea, several San Pedro hotel representatives Monday said their community gets short shrift when it comes to promotion.

“People don’t even know where San Pedro is,” said Bertha Huang, owner of the San Pedro Grand Hotel. “I had a recent phone call--somebody wanted to find out how close San Pedro is to Hearst Castle,” in San Luis Obispo County, more than 100 miles to the north.