Huntington Beach Council May Use Bed Tax to Offset Bond Costs

The City Council will consider a plan Monday that may help defray the cost of a $20-million bond for which the city is obligated to help pay for a sprawling seaside redevelopment resort project.

City planners have proposed that the city hire a consultant to study how much bed-tax revenue can be raised at four hotels planned at the ongoing Waterfront project to help repay such a bond.

A 10% tax is charged on all hotel and motel rooms in the city, of which 6% goes into the Redevelopment Agency fund.

Under the Waterfront proposal, the redevelopment portion of the tax would go toward repaying the bond.

The proposed method of payment “is rather unusual,” Deputy City Administrator Robert Franz said.

But city officials favor it as a way of trimming the amount of money the agency will have to pay from tax-increment revenues to repay the bond.

The bed-tax study, which would take a month or two to complete, would determine how much the agency could save on the bond, Franz said.

Council members will also consider a plan to enable the Waterfront owners to lease Zack’s concession stand, located on the beach across from the development, for the next 10 years.

The 45-acre hotel project at Pacific Coast Highway and Beach Boulevard, which also will include 800 condominiums, restaurants and shops, calls for a walkway to connect the facilites with the beach, so owners want to tie the snack shop into the development.