Gig Harbor council hears plan to raise Pierce County tourism fee; consultant says proposal would quadruple revenue

The Gig Harbor City Council on Feb. 12 heard a presentation on a proposed change to the Tacoma–Pierce County Tourism Promotion Area (TPA) interlocal agreement that would raise the per-night charge hotels pay into a regional tourism fund.

Consultant Kelly Rankin of Civitas told the council the proposal would create a new top tier at the $5-per-night legal ceiling, a $3 middle tier for downtown Tacoma properties, and leave Gig Harbor in the $1.50 tier. "That averages to just under a dollar a night in comparison to their competitive set other destinations, which are closer to $2 and some up to $5 a night," Rankin said, describing the region's fee landscape. Rankin said the current TPA charges raise roughly $1,000,000 a year and the proposed modifications would bring that figure to about $4,200,000 annually.

City Administrator Katrina Knudsen summarized local impacts and outreach: she said Gig Harbor's hotels have withdrawn earlier opposition and confirmed Gig Harbor has two hotels with 40 or more rooms (which matters for program eligibility). Knudsen and Rankin emphasized that this is a Pierce County charge separate from Gig Harbor's local lodging tax; the city would receive promotional "fringe benefits" from county marketing that could draw visitors to Gig Harbor restaurants, ferries and attractions.

Council members raised policy questions about zone assignments, representation on the hotel commission and how revenue allocation is governed. One council member argued that the current zone mapping and commission appointment rules "might underrepresent Gig Harbor" and asked whether a geographic-impact analysis or a minimum number of affirmative votes from smaller-city representatives should be required for future boundary or rate changes.

Rankin and Knudsen responded that the county's DMO judged Fife no longer aligns with the TPA services and that the agency proposing the change is seeking a supermajority (two-thirds) recommendation from the hotel commission rather than the prior unanimous threshold to reduce gridlock. Rankin also described the procedural path: petition collection requiring 60% weighted support by amount paid, signature of the amended interlocal agreement by participating cities, County Council public hearings and an ordinance to modify the TPA.

Mayor Pro Tem Lee Rodenberg indicated he perceived consensus to advance the item to a regular City Council meeting for formal consideration, where council could vote on participating in the amended interlocal agreement. The item will return to a future regular meeting for a formal decision.

A next step noted by staff is petition circulation and signature collection; no formal ordinance vote occurred at the study session.