Frisco wants out-of-towners to fund special district that would bring even more visitors to town

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The Frisco City Council gave the OK on Tuesday night for staff to pursue the creation of a tourism public improvement district, a tool used by only a handful of Texas biggest cities. If approved, the district would allow participating hotels to collect a 2 percent fee on each room night sold. The revenue generated would then be used to market Frisco as a destination and boost hotel occupancy citywide. 

Its all about economic impact, said Marla Roe, executive director of the Frisco Convention and Visitors Bureau. Theres a ripple effect from hotel stays because visitors also eat out, shop and spend their entertainment dollars while in town. 

In 2011, Dallas became the first Texas city authorized to create a tourism public improvement district. In 2015, Fort Worth, Arlington, Austin and San Antonio got the go-ahead. Frisco hopes to be among the cities authorized during the legislative session that starts in January. 

Since Dallas tourism public improvement district started in 2012, the city has seen a 16 percent increase in overall hotel occupancy rates, according to a Frisco memo on the proposal. And the conversion rate for securing citywide conventions increased in Dallas from 23 percent of bids to 41 percent, Friscos memo stated. 

Dallas collects about $15 million each year from hotels with at least 100 rooms to fund the improvement district, records show. 

Fort Worths tourism public improvement district received final approval in October 2017. The district is expected to generate about $3 million in its first full year. 

Friscos proposal calls for creating a district with hotels that have at least 75 rooms. If state lawmakers give the OK, the city would  next need buy-in from hotels. The Frisco City Council would also have to hold two public hearings on the proposed district before calling a vote. 

A board of directors consisting of hotel operators would be named to draft a service plan and an annual budget and decide how to spend the money each year with help from the Frisco CVB. 

Sixteen of Friscos 17 hotels are eligible to participate. But that number will soon increase. Seven hotels are under construction, and several more have announced plans to build. 

By the end of this year, Frisco will have 2,781 hotel rooms at 19 properties. Within a few more years, the city is projected to have 4,423 hotel rooms. 

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