REPORT TO COUNCIL
SUBJECT
Title
Update and Action on the Formation of a New Destination Marketing Organization (DMO) entity and Appointment of a Board of Directors
Report
BACKGROUND
On April 9, 2019, City Council directed the City Manager to commence work efforts to form a new destination marketing organization (DMO) to provide convention and visitor services such as a Convention-Visitors Bureau (CVB). Council actions included approval of: a governance model whereby the City contracts directly with a nonprofit DMO and Convention Center operator; the configuration of the initial Board of Directors with added direction to increase the number of board members from seven to nine; and the approval of the DMO to be fully supported with public funds from the Tourism Improvement District (TID) and use of General Fund dollars to advance implementation and seek reimbursement when TID reserves are available for expenditures (Fall 2019, 1 Year term).
The purpose of this report is to provide the Council with an update on the organization's formation and to appoint the Board of Directors for the new entity.
DISCUSSION
Section 501(c)(6) of the Internal Revenue Codes provides a federal tax exemption for business and other professional leagues that are not organized for profit. The Chamber which used to have a contract to perform convention and visitor services currently has a fictitious business name statement on file with the County Recorder under the name "Santa Clara Chamber of Commerce and Convention-Visitors Bureau". Staff has not determined whether use of the name Santa Clara Convention and Visitors Bureau (CVB) will be an issue or whether some other name for the organization should be used.
A new entity will be incorporated as a California nonprofit mutual benefit corporation and obtain IRS designation as a 501(c)(6) nonprofit organization whose mission would be focused on promoting the long-term development and marketing of Santa Clara, with emphasis on conventio...
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