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In January, the Sedona City Council gave its blessing for staff to move forward with a new contract with the Sedona Chamber of Commerce.

And while council members expressed their confidence in the chamber’s abilities to serve as the city’s destination marketing organization, they have since expressed a desire to have a little more say in how the nearly $2 million from the city is spent.

At a March 1 work session, council and the chamber decided that beginning in 2018 a joint meeting would be held every January with council and the chamber prior to development of the upcoming year’s program of work, budget and marketing plans. This would be an opportunity for the two parties to “engage in dialogue regarding current year goals and objectives, assess the state of the tourism industry at that time and respond to changing needs,” a city report states.

The report goes on to say that since the last contract was developed three years ago, the state of tourism in Sedona has changed. The chamber has seen success with its destination marketing efforts and by all accounts, visitation to Sedona is at an all-time high. With this success has also come challenges, including striking the right balance between the needs of visitors and the quality of life of residents, and dealing with the overall strain on city infrastructure. In light of these changing conditions, and as part of the contract renewal, council has expressed the need and desire to:

  • Structure the contract to promote more involvement from the council in annual decisions related to desired outcomes and policy level objectives relating to the program of work, marketing approach and product development programs and projects.
  • Develop more sustainable tourism that considers and addresses the need to better balance the interests of residents and tourists to mitigate the unintended consequences of such a robust tourist economy. In addition, while the chamber will continue to market the area as a vacation destination — focusing more on quality over quantity — product development will continue to be an area of emphasis. And because product development has not been defined, funding can be used for a variety of sources that enhance the visitor experience — traffic and parking mitigation and trail maintenance — while benefiting the city.

“That product development piece has given us some flexibility to do things that would otherwise have no dedicated funding source,” Assistant City Manager Karen Osburn said. “In our conversations about this year’s budget, council said pump the brakes on marketing and put more into product development.”

She went on to add, “As far as we can tell, there is an unlimited number of possible programs and projects. There is a long list so I don’t think we’re going to be in a situation where we say, ‘What are we going to do with product development money?’”

Later in the meeting, Councilman Jon Thompson asked chamber President and CEO Jennifer Wesselhoff if she has any concerns when it comes to allocating product development funds for city projects or any other aspects of the contract with the city. One of her concerns is the perception among chamber stakeholders that the city is going to want more and more of the 55 percent of the bed tax that may be allocated for city projects.

“They may not be privy to the relationship and how we work so well together,” she said in regard to the city and chamber. “It’s their understanding — especially the lodging industry — when they increased the tax on themselves [3 to 3.5 percent for bed tax] that this money would be used for marketing, sales and product development. At that time, product development wasn’t clearly defined and it’s still very broad. I think it’s safe to keep it broad in order to do a lot of the things we want to do under that umbrella.

“I don’t want them to feel that through this agreement that the rug is getting pulled out from under them. Every year it’s a little less and a little less and more is going to product development. Is product development money really just another way for the city to use that already-allocated money for capital improvement projects that you don’t have money to fund? That’s the only thing that gives me a little worry.”

The meeting concluded with a lengthy discussion regarding the chamber’s proposed purchase of a vacant building on Jordan Road. The idea would be to pay upward of $250,000 a year over the next four years and then deed the property to the city. This money would come from product development. The building immediately would add 33 additional free parking spaces in Uptown, Wesselhoff said. While the city would eventually determine its use, in the interim, she said it could be used in many ways, including a community gathering room.

Because of the complexity of this purchase — and timeliness due to it being in escrow — council has asked Wesselhoff to return for the Wednesday, March 15, council meeting beginning at 3 p.m.

“We feel this is a win-win situation for everyone,” she said. “We want to be seen as part of the solution as it relates to parking, congestion and traffic. We feel this is a good way, especially if this area were to become a transit hub.”


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