Claremont Insider: It's the Branding, Stupid

Sunday, November 9, 2008

It's the Branding, Stupid

Boy were we wrong! We thought that the city of Claremont and its economic development projects were facing the same problems as the rest of the country, but Tony Krickl reported in yesterday's Claremont Courier that the folks in City Hall have figured out that our economic woes are simply a matter of packaging:

Businesses are slowly trickling out of Village West, leaving behind empty storefronts and leasing signs on their doors.

Red Line Leather in the Packing House is long gone. Boutique Peyton Gray and children’s clothing store Chloe & Hunter recently closed down. Celley’s on Indian Hill Boulevard will follow in the coming weeks, said Storeowner Marcelle Sanam. The owners of Stone Cold Creamery and Maui Wowi are looking to sell, while others are barely staying afloat.

While much of the hardships of the $22.5 million redevelopment project are blamed on the dismal economy, some shopkeepers have complained that the city has not done its part to promote the area as a vibrant shopping destination.

In response, city officials are in the process of discussing a “branding study” that they hope will re-define the city and draw in visitors and their sales tax dollars from around the region. City staff estimated the project would cost $50,000 to hire an outside consulting firm to come up with the brand and another $50,000 to promote and advertise the new brand.

“We have a lot to offer,” said Assistant City Manager Tony Ramos, speaking at a meeting of the Economic Development Committee on Tuesday. “We’re a very unique town. This is not a marketing plan for businesses, it’s a branding of the community.”

Phew! What a relief! We thought we were in real trouble there for a second. It's a good thing the city paid the Rose Institute of Claremont McKenna College to conduct that survey of local businesses.

The Claremont City Council received the Rose Institute survey at their last meeting on October 28th. The staff's survey summary, by the same Assistant City Manager Ramos quoted in the Courier yesterday, painted a sunny picture of today's business scene that didn't seem to square with the Courier's article :
Claremont business owners reported a relatively stable year in gross receipts. The survey asked owners whether their gross receipts increased or decreased over the past yea.r An overwhelming 60 of businesses reported an increase or said their receipts were about the same as the year before. 33 of businesses indicated their receipts had decreased while 7 did not know whether their sales were up or down or refused to answer the question. There was very little difference between Village and non-Village business sales in gross receipts over the past year.

Since Claremont's city staff directed the parameters of the survey, it was also unsurprising to see the Rose Institute polling businesses about and increase in the city's Transient Occupancy Tax - the tax charged to guests at hotels and motels within the city limits:

The Rose Institute of Claremont McKenna College conducted a business climate survey. The purpose of the survey was to determine how Claremont's businesses are fairing in today's economy; if businesses have plans for expanding or relocating, what role businesses believe the City should play in marketing businesses within the City; and, if businesses would be willing to provide financial support for funding a citywide marketing campaign. The ad hoc survey committee has reviewed the survey results and is recommending that additional education be provided to the business community regarding transient occupancy taxes (TOT) and business improvement districts (BID).

Why a TOT increase? Because the city wants to use the money raised to pay for its efforts at marketing (branding) the city. It would be unpopular to tax businesses for that, so they decided to find people can't vote and charge them instead.

The transient occupancy tax gets passed on to folks like the parents of students at the Claremont Colleges, who presumably will get to help pay for marketing the city of Claremont without necessarily receiving commensurate benefits.

Typical of Claremont city staff's thinking is the fact that although the Rose Institute survey showed that only 16% of the 283 businesses contacted indicated they would support an increase in the TOT, staff did not conclude the tax increase was a bad idea. No, instead Assistant City Manager Ramos wrote:
In addition, survey results suggest that many business owners may not understand what the transient occupancy tax is and how it mayor may not affect their business. A greater effort at clarifying the exact nature of the transient occupancy tax and how that tax would fund future marketing campaigns to the benefit of all the businesses in Claremont may be an option well worth further consideration by the City and the Chamber of Commerce.

To translate into English: Business owners are to stupid to realize how much City Hall will benefit from this tax. We need to manipulate them a little more. They'll come around like they always do.

The Rose Institute's survey carries this conclusion about the city's proposed TOT increase
It is possible that business owners would be more likely to support such a measure if it was clear that the tax burden would fall on transient visitors who stay in local accommodations. It should also be noted that many local hotels cater to visiting parents or relatives of students at the Claremont Colleges and this clientele is unlikely to be strongly discouraged by city tax rates.

In other words: Let's stick it to the college families. They can afford it.

When are we ever going to figure this out? It's the credibility, stupids.