Opponents say timing couldn't be worse to raise rates
 

By Henry K. Lee, Chronicle Staff Writer
Copyright 2001 The Chronicle Publishing Co.
Article date: October 26, 2001
 

Tax-rich Emeryville will get even richer if voters approve ballot measures to increase rates for hotels and their guests to raise money for public services.

City officials say taxing the city's four hotels will help maintain and improve city services, including the police and fire departments, streets, parks and programs for seniors and youths.

But hoteliers say the economic downturn is a bad time to raise local taxes, and they insist that the measures will only hurt business in a city known as a welcoming enclave for corporate headquarters, shops and business parks.

At issue are Measure D, which would increase the hotel tax on occupants to 12 percent from 10 percent and generate $500,000 a year, and Measure E, which would tax hotels for guests who stay longer than 30 days. Voters in the city of 7,200 residents, which is flush with tax revenue from giant retail centers built in the past decade, will decide on the measures Nov. 6. They won't see any arguments against the measures on the ballot -- opponents did not draft them in time to meet the county registrar's deadline.

City council members who put the measures on the ballot acknowledge that they will probably pass because Emeryville's visitors -- not its citizens -- would be taxed. Both measures require a two-thirds majority to pass.

"I would hope the citizens enjoy the services they get and want to keep them going," said Councilman Ken Bukowski. "These are realities."

Dan Zerbonia, general manager of the new Courtyard by Marriott Hotel on Shellmound Street, countered: "Most hotels, in the situation that we are in financially, see this as an inappropriate time to be raising any kind of taxes on customers."

De Davies, general manager of the year-old Woodfin Suites Hotel on Shellmound Street, said Measure E is unfair -- and unfairly targets his business because none of the three other hotels are geared for long-term stays.

Davies said the city is upset that the production crew and cast members making the "Matrix" movie sequels in the Bay Area did not pay additional taxes during their stay in 100 rooms at Woodfin from April to June this year.

Emeryville Finance Director Pauline Marx acknowledged that the "Matrix" visit "does have something to do" with the tax measure, but said Woodfin won't be affected so long as it keeps stays there fewer than 30 days long.

"We're trying to make it fair for everybody by giving everybody the same incentive to act the same way," Marx said.

The measures are just one way to increase revenue for the city, she said. "Expenses grow with city governments even when revenues don't," Marx said. Hotels aren't the only ones that could face tax increases in the future, she said.

The tax proposals come as the city plans for Bay Street, a new destination center near the giant Ikea home-furnishings store that will include a 200-room hotel, a 16-screen AMC theater, a Barnes & Noble bookstore and restaurants such as California Pizza Kitchen and Prego. Opening date is October 2002.

Councilman Richard Kassis said the city's hotel taxes have lagged behind those of other cities.

"We're just coming to market with what's going on around us in terms of taxes," Kassis said. "It's a revenue source, and we've been below market for a long time."

That's the same pitch the city made in 1997, when voters overwhelmingly approved a 38 percent tax increase on Emeryville's card rooms.

But Davies said if the long-term occupancy tax is implemented, his short-term rates will go up, too. Davies said the taxes could cast a pall for other hotels that might be interested in coming to the city.

"They're going to make it hard for us to bring nice services to the citizens of Emeryville," he said. "Who would want to come here and build a beautiful hotel in your neighborhood if we knew this was going to happen? I would plead to the citizens of the city that just plain old fairness is the issue."
 

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