The Santa Clara City Council took a step forward Tuesday night to establishing a 2 percent hotel tax to generate revenue for the proposed stadium for the San Francisco 49ers next to the Great America theme park.
The City Council voted 5-1 in favor of resolutions aimed at establishing a community facilities district, which would include the participation of the eight hotels within the vicinity of the theme park.
Councilman Will Kennedy was the sole dissenter.
Guests of hotels in the district would be required to pay an additional 2 percent tax on their bill. The tax would not affect the city's 9.5 percent transient occupancy tax.
However, establishment of the district is subject to the approval of the hotels involved. Hotel owners are required to return their ballots by May 4 and the first reading of the special tax ordinance will occur at a council meeting on May 11.
Steve Van Dorn, president and CEO of the Santa Clara Chamber of Commerce, spoke in favor of the tax and said he believes it will boost the hotel business.
The hotel tax would start with the first game at the stadium and would continue for a period of about 40 years.
The tax would be used to generate $35 million of the $937 million needed for the 68,500-seat stadium. The 49ers have agreed to raise $493 million and another $330 million would be generated by stadium authority and through vendor contracts, deputy city manager Carol McCarthy said.
The tax would be applied to the eight hotels in the vicinity of the proposed stadium, which combined make up 70 percent of the city's 3,800 hotel rooms.
The hotels within the community facilities district are the Hyatt Regency, Santa Clara Hilton, Santa Clara Marriott, Avatar Hotel, The Plaza Suites, Embassy Suites, Biltmore Hotel and Hotel Sierra.
The City Council also approved 5-1 to adopt an amendment to the redevelopment plan for the Bayshore North Project as recommended by the Redevelopment Agency.
The stadium proposal will go before voters in the June 8 primary election. If the vote passes, the hotel tax will go into effect when the stadium opens. If the proposal is not approved, the community facilities district will be terminated.