City of Adelanto Hotel Transient Occupancy Tax (TOT) Rebate Incentive Program

The City of Adelanto has passed a resolution, Resolution No. 22-34, to launch the Hotel Transient

Occupancy Tax (TOT) Rebate Incentive Program. This program is specifically designed to attract the development of new hotels (four- or three-star/diamond hotel rating or higher) and promotes reinvestment in existing hotels in the City.

Program Description:

- The City's current Transient Occupancy Tax (TOT) is 10%, with 8% allocated to the City and 2% for economic development.

- The TOT Rebate Incentive Program offers eligible hotel developers a rebate of up to 5% of the TOT for 10 years.

- This rebate will be funded through 2% from economic development and 3% from the City’s general fund.

- The City will still receive at least 5% of the TOT until the agreement expires.

Eligibility:

- Applicable to hotels within the City limits that meet four or three star/diamond hotel ratings or higher, under rating criteria established by the American Automobile Association (AAA), JD Power and Associates, or comparable hotel rating entity.

- Existing hotels are also eligible for the Program. Existing hotels must measurably improve the quality of

the hotel through either increased capacity or ability to charge higher room rates and/or enhancements to the hotel’s ratings by AAA, JD Power and Associates, or comparable hotel rating entity.

- Hotels must have 50 or more rooms and operate 24/7, providing services such as housekeeping, food and beverage, room service, and more.

- Eligible hotels must provide independent, third party, certification acceptable to the City indicating the

level of the quality of the hotel as four or three stars/diamond or higher on a yearly basis, during the

incentive time period.

Requirements:

- A feasibility analysis demonstrating a funding gap is required, subject to independent review.

- Actual rebates are based on TOT remitted, not estimated amounts.

- Subsidies exceeding $100,000 require a public hearing and report; subsidies over 1.75% of project cost require prevailing wages.

- Hotels must receive a Certificate of Occupancy within 18 months of development plan approval unless otherwise specified.

- A binding agreement with the City is required prior to or at the time of development application approval.

- The rebate is limited to 5% of the TOT for a fixed term of 10 years.

- The hotel must demonstrate financial need, and the rebate amount will not exceed the funding gap.