Art or cheaper hotels?

Just as understanding art falls to a matter of perspective, so too does deciding how to fund it.

Two Newport Beach council members disagree about whether to spend a possible $150,000 annual allocation on the arts – as the giver intended – or on reducing the cost of hotel stays for some visitors.

Visit Newport Beach, a group that works to draw large bookings to the city’s hotels, originally offered up the sum as a donation intended to promote arts and culture in the city.

The money would come from assessments charged to patrons at member hotels in the Newport Beach Tourism Business Improvement District, or TBID, whose budget Visit Newport Beach oversees.

The proposed donation came as part of a pitch for city renewal of the TBID for 10 years, plus a requested approval of the addition of the Island Hotel to its membership and the increase of its assessments from 2% to 3%.

As such there would be extra money to spend.

Council members seemed all for the idea of directing the $150,000 to arts during an initial November study session, especially Councilman Mike Henn.

“It’s an investment in the city,” Henn said at the time, saying that the money ought to be used for arts programming rather than for art acquisitions. “By providing the fulsome mechanism to improve the arts and cultural programming and facilities in our city, we enrich the city of Newport Beach.”

Then came the skeptic, seated a few chairs to his right: Councilman Ed Selich.

First, Selich questioned the funding source.

“Why do we have to have a TBID?” he asked.

In theory, member hotels could join together independent of the city to collect the assessment, he said.

But the tides did not turn his way.

Most council members seemed poised to renew the TBID as requested.

The majority also didn’t seem opposed to extending the Transient Occupancy Tax agreement with Visit Newport Beach, which sends 18% of the bed tax from the city to Visit Newport Beach.

So Selich picked a new battle: the $150,000.

“Well, just seeing where this is heading, the negotiator in me always comes out in the end,” Selich said to laughter.

“Admit you’re wrong,” said Councilman Rush Hill, who has since become mayor.

“In regard to the $150,000, I’d just say this: The first offer isn’t always the best offer,” Selich said. “And given where this is headed, I think we ought to look at sweetening that pot a little bit.”

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An option involving hotels

Selich thought up a possible sweetener: Use the funds to expand the affordable hotel options in Newport Beach.

One of the California Coastal Commission’s directives is to keep existing hotels affordable and require new hotels to provide affordable rooms, Selich explained in an interview Thursday.

Options include giving incentives to keep an affordable hotel in place or to put out a bid for new, affordable accommodations, he said.

“Not every hotel in town is a Pelican Hill Resort,” he said. “My idea may not be feasible, but I’d like to have us explore it.”

Although the $150,000 had been initially designated for the arts, Visit Newport Beach would be open to other suggestions, President and Chief Executive Gary Sherwin said in a separate interview Thursday.

Henn had suggested the idea for the arts designation to Visit Newport Beach during an earlier one-on-one meeting, while Selich’s remarks had not been expected, Sherwin added.

The councilman had identified the possible funding as a way to support efforts of an arts and culture master plan in the works for the city.

“They’re going to slug it out and figure out what they want to do with it, and I’m going to let them,” he said.

“This was almost like a little throwaway,” he continued. “Not that $150,000 is meaningless, but when we’re talking about a 10-year contract, that’s the big thing.”

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Issue remains unresolved

The council approved the TBID and bed tax extension during Tuesday’s meeting, but how to spend the $150,000 remains unresolved.

The council, at city staff’s request, agreed only that the money would need to be drawn from bed tax funding, rather than the TBID assessment, due to rules already in place around that assessment.

How to designate $150,000 for now labeled “public benefit funding,” will return to the council in June.

“I’ve thought about it some more and, well, I think I’m right,” Henn said of his proposal to use the funding for the arts. “I’m pretty sure Councilman Selich thinks he’s right too.”

Henn moved to wait on the specific determination for the use of the $150,000.

Selich seconded the motion.

“Mr. Mayor, can I comment on that?” he asked.

“You may,” Hill said.

“I think my idea is a good idea,” Selich said.

“I’ve never known you to be any different,” Hill said.

“Is that your comment?” Councilwoman Nancy Gardner asked.

“No,” Selich said, and then he continued by offering support to Henn’s idea of waiting a little longer to decide.