Council Hears Hours of Debate Over New Newport Tourism Marketing District; Motion Fails

Newport City Council members heard more than an hour of public comment and council discussion on a proposed Tourism Marketing District (TMD) that would assess lodging properties and direct marketing funds through Discover Newport.

The Tourism Marketing District proposal would create a locally administered assessment on lodging properties (the packet and presenters described approximately 20 hotels in the district) and authorize Discover Newport to function as the district’s management/owners association, including forming a majority business-owner district management committee. The proposal refers repeatedly to the state enabling statute (identified in testimony as the TID Act) and said the district would levy assessments that are collected along with hotel tax remittances. Discover Newport staff said the assessment is a $1.50-per-room-night-type fee assessed on guests and that the money would be used primarily for off-season marketing and destination development.

Why it mattered: Councilors and members of the public pressed the city and Discover Newport on how the assessment would be collected, which businesses would pay, whether collection could create additional city liability, and how costs for Discover Newport staff time would be assigned between existing hotel-tax-funded activity and the new district. Several councilors said they were reluctant to have the city take on a new collections role or to have the city perceived as running operations that normally would be managed by a nonprofit trade association.

Discover Newport’s new executive director, Vicky Cimino, introduced the district plan and described the organization’s role as the district’s owners association. Discover Newport staff and counsel told the council that state law gives the state exclusive jurisdiction to issue certain beverage licenses (raised in a separate licensing hearing in the same meeting) but that the city retains control over where and when licenses can be used inside Newport. Councilors also asked whether Discover Newport would charge the district for salaries or use existing hotel-tax revenue; Discover Newport representatives said the district plan permits charging staff time to the district but the budget and final allocations would be set when the district’s first budget is presented.

Public comment split the room. Joanna Salvo and other small-inn owners opposed aspects of the plan, arguing small inns and bed-and-breakfasts are treated as outsiders and that the district benefits larger lodging operators; she provided financial figures comparing a Newport Hotel Collection investment and Discover Newport’s larger budget. Brian Young, managing director of Castle Hill, spoke in favor, saying destination marketing benefits many local businesses and that a steady revenue stream helps planning through downturns. Several councilors pressed Discover Newport on indemnification for the city and on clarifying whether city staff time or collections would be paid from district funds; Discover Newport agreed to indemnify the city and to provide more explicit budget language about collections and staff charges.

The council’s action: The council proceeded to a vote after lengthy discussion. The motion to adopt the authorizing resolution for the Tourism Marketing District failed during the meeting (members recorded both voiced and hand-vote counts). The public record shows both formal motions and follow-up show-of-hands votes but the final action on the proposed district at this meeting was recorded as failed.

What happens next: The transcript records several substantive follow-up points the council asked Discover Newport to provide — a clearer budget showing whether and how district revenue would pay staff time, language clarifying the city’s collection fee and indemnity terms, and explicit procedures about which businesses are assessed and how protests are handled under the state enabling act. Discover Newport representatives and the city solicitor indicated they would return with answers or amended documents.

Ending: The Tourism Marketing District debate highlighted questions about the boundary between nonprofit destination marketing groups and municipal roles in collections and enforcement. Councilors said they remain open to the concept if outstanding questions about accountability, collection mechanics and benefit to small businesses are resolved.