Over the last several years, the City has expended a considerable amount of time and resources responding to a variety of public safety and public
health-related concerns at the various hotels and motels within the community. While a number of tactics have been established and acted upon by personnel from both the Public Safety and Community Development Departments to better engage with these businesses, the calls for service have not diminished and in fact, in certain locations, have increased.
Therefore, staff has researched additional measures, including the proposed ordinance language, which would yield enhanced accountability from these
businesses and the better management of their properties resulting in a safer environment. The proposed ordinance is predicated upon a similar ordinance that the City of Brooklyn Center enacted last year.
The proposed ordinance establishes a required business license to operate a transient accommodation site in the City of Plymouth. The purpose is to
ensure that hotels and motels are implementing measures to improve the safety of their properties and to discourage criminal activity within their facilities. Further, a tiered system would be employed whereby those businesses that are compliant with the established standards within the ordinance, and fall within a certain range of calls for service, would not result in additional conditions imposed upon the business. However, for those businesses that are not compliant with the stipulated standards and/or fall outside of the range for calls for service, then additional conditions and fees will be imposed onto the business.
Finally, staff has not initiated any discussions regarding this proposed ordinance with the hotels and motels. Staff wanted to hear from the City
Council first to learn whether there is a desire to move this concept forward. If the direction is to study this notion further, then staff will meet with all of the hotel and motel managers to share the proposed ordinance with them and to seek their input, which would be reported back to the City Council at a later date.
3. BUDGET IMPACT: Staff is seeking direction from the City Council to determine the appropriate licensing fees. For example, in the City of Brooklyn
Center, the fees are as follows: 150 for Level 1, 200 for Level 2 and 300 for Level 3. Staff believes that the license fees for Level 2 and 3 businesses should be higher as the fees would assist in off-setting the required staff time to manage this program and the more problematic properties.
Subd. 7 To account for differences in the number of lodging units among the hotels and motels, and to avoid larger properties being
disproportionately represented, it is appropriate to consider the number of calls for service based on a per-lodging unit calculation for the purposes of determining the level of business license required.
435.05. Purpose. It is the purpose of this Section 435 to ensure that hotels and motels (referred to in this Section as Transient Accommodations) are
taking steps and implementing measures as may be needed to improve safety and discourage the use of their facilities for criminal activities in order to protect the safety of their guests and the public. Those owning and operating transient accommodations that are safe, secure, free from unreasonable noise, nuisances and threats to their safety and security.
A. Any report of criminal activity made to the City from or concerning a Transient Accommodation in connection with an incident occurring at that
transient accommodation property, except calls originating from the owner, manager or other agent of the owner of the Transient Accommodation Property unless they knew or reasonably should have known that such an incident would occur based upon prior experience with the person or group and with that knowledge they nevertheless allowed the person or group to return to the Transient Accommodation; or
C. Only a call for service that is verified by the responding City personnel as being a valid call for service regarding criminal activity by a guest
or employee of the Transient Accommodation or violations of City Code shall be included in the annual calls for service calculation for the purposes of this Section. Criminal activity means conduct which is prohibited by statute or City ordinance and for which the actor may be sentenced to imprisonment.
G. Lodging Unit. One self-contained unit within a Transient Accommodation designated by number, letter, or some other method of identification that
is designed or used for overnight accommodations. A Lodging Unit shall not include areas or rooms not utilized for overnight accommodations such as banquet rooms, meeting rooms, business centers, pool areas, and workout rooms.
Subd. 1. A new Transient Accommodation shall obtain a Transient Accommodation business license prior to opening for business. A new Transient
Accommodation that had not previously operated within the City shall initially qualify for a Level I Transient Accommodation business license. The City may charge a reduced business license fee for a new Transient Accommodation business license based on the number of months remaining in the particular business licensing period.
Subd. 2. On or before February 1st, of each year the City will notify each existing Transient Accommodation in writing of their annual calls for
service for the previous year and the level of Transient Accommodation business license for which they must apply. Applications for a business license renewal shall be submitted to the City at least 30 days prior to the business license expiration date.
Subd. 3. The Transient Accommodations must obtain the required level of Transient Accommodation business license from the City by no later than May
1st each year. All requirements applicable to the particular level of business license and any additional conditions placed on the business license must be completed and fully implemented by the business licensee by August 1st. Failure to comply with the requirements applicable to the business license level, or any additional conditions issued by the City Council, shall constitute sufficient grounds for revocation, suspension, or non-renewal of the Transient Accommodation business license.
435.30. Property Safety Inspection. Pursuant to this Section, the City shall make safety inspections to determine the condition of Transient
Accommodations for the purpose of enforcing the property maintenance code and the standards stipulated in this Section. The City may enter, examine and survey at all reasonable times all Transient Accommodation lodging
units, common areas, and operational areas. Safety inspections of the Lodging Units will occur after obtaining consent from the occupants of the
Lodging Units. In the event that an occupant does not consent to entry by the City, and if there is probable cause to believe that an inspection is warranted, then application may be made to the court for an administrative or other search warrant for the purpose of inspecting the Lodging Unit and premises.
Subd. 7. Inspect rooms of guests who refuse maid service or behave suspiciously.
435.55. Level I Transient Accommodation. A Level I Transient Accommodation is eligible for a Transient Accommodation business license without needing
to comply with any special requirements beyond complying with any conditions the City Council may impose on the business license. The business license shall be issued upon application, payment of applicable fees, safety inspection, current certificates for fire and elevator inspections, and proper licensing with all applicable government agencies, including the Minnesota Department of Health.
Subd. 2. A decision to revoke, suspend, or not renew a Transient Accommodation business license shall be preceded by written notice to the applicant
or business licensee of the alleged grounds therefore and the applicant or business licensee will be given an opportunity to request a hearing before the City Council before final action is taken to revoke, suspend, or not renew the business license. An applicant or business licensee waives its right to a hearing by failing to submit a written request for a hearing to the City within ten (10) days of the issuance of the written notice. If a timely request for a hearing is received, the City Council shall conduct a hearing at the next regularly scheduled City Council meeting and provide the applicant or business licensee an opportunity to be hear.
Subd. 3. The written decision to revoke, suspend, or not renew a Transient Accommodation business license shall identify the specific grounds for the
decision. Upon issuance of the written decision, no Lodging Unit within the Transient Accommodation may be offered or used for any period of time by guests until a new Transient Accommodation business license is issued.
Subd. 2. A Transient Accommodation business license revoked or not renewed by the City Council will not be reinstated or issued until the owner has
applied for and secured a new Transient Accommodation business license and complied with all conditions imposed at the time of revocation or non-renewal. In no case shall a Transient Accommodation business license revoked or not renewed be allowed to be reinstated or issued for a period of ninety (90) days. The City Council may impose a period following the revocation or non-renewal of the owner's previous business license during which a new Transient Accommodation business license may be submitted. A decision not to renew a Transient Accommodation business license may take the form of a suspension or revocation.
Subd. 4. The conditions of approval of any subsequent application for a business license to operate a Transient Accommodation on the same property
following a period of revocation or denial of renewal of a Transient Accommodation business license shall be based upon the Transient Accommodation property's history or annual calls for service prior to the revocation or non-renewal.
Subd. 5. No subsequent application for a Transient Accommodation business license on the same property following a period of revocation or
non-renewal shall be approved unless the applicant presents a corrective action plan that is approved by the City to help ensure the conditions and causes of the prior revocation or non-renewal are appropriately addressed. Implementation of, and compliance with, the corrective action plan shall be a condition of the license.
Subd. 1. Any person, firm, or corporation who violates any provision of this Section is, upon conviction, guilty of a misdemeanor. The penalty that
may be imposed for a misdemeanor is a sentence or not more than ninety (90) days or a fine of not more than 1,000, or both. Each day upon which a violation or this Section occurs constitutes a separate offense.
435.90. Initial Business Licenses. Persons, firms, and corporations currently operating a transient accommodation within the City of Plymouth shall
obtain a Transient Accommodation business license from the City within forty-five (45) days from the effective date of this ordinance. The level of Transient Accommodation business license will be calculated based on the annual calls for service from the previous year. Business licenses for subsequent years must be obtained in accordance with the timelines established in this Section.
Plymouth has a significant hotel presence that includes seven hotels, 986 rooms and a total property valuation of over 43 million. The hotel market
represents one of the main places visitors, either for work, recreation or pleasure, experience Plymouth. It is essential that the city s hotels provide a safe experience to the traveling public, both for the sake of the visitors and for the community s reputation and quality of life. Unfortunately, there have been a number of well documented incidents that merit a deeper review of the city s hotel market. This report provides city officials trend information that will be useful in further consideration or development of new policies regulating the market, all with the intent of protecting public safety and other community interests.
The first step in this process was to analyze data from the Police Department regarding police incidents to each of Plymouth s seven hotels. In
October, at my request, Jared Gilbert, Public Safety Analyst, began gathering historical data on all reported police incidents at Plymouth hotels. This data breaks down in detail the types of incidents at each hotel from 2011 through 2015. The Plymouth Hotels Incident History Report as prepared by Plymouth Public Safety is included as a supplement to this report.
1. How many rooms does each hotel have? 2. What is the market value of each hotel? 3. What is the market value of each hotel room? 4. What amount
does each hotel pay to the city in annual property taxes? 5. What is the police call distribution per hotel? 6. Do the city property taxes collected from each hotel cover the cost of providing annual police services? 7. Is there a correlation between hotel room rates and the number of police calls? 8. Have the hotel owners reinvested in their buildings and if so, how much has been reinvested?
This report gathers data regarding property valuation, tax impacts, service demand, and room counts to provide a broader perspective. While much of
the information draws correlations, there are questions of causation which are not directly addressed here. While no single measure should be used to infer action be taken, the data, in its totality, begins to demonstrate trends that may merit further consideration and action.
What is the market value of each hotel? Per the Hennepin County Assessor, the total market value for 2016 for all seven hotels is just over 43
million, an average of 6.1 million per hotel, with a high of 13 million for the Crowne Plaza and a low of 2 million for the Red Roof Inn. The market values for Plymouth hotels have been stable since 2010. Exceptions to this include the Country Inn Suites which has average annual market value increases of 4.4 and the Comfort Inn with average annual value increases of 3.1 .
What is the market value of each hotel room? The 2016 market values are broken down per hotel room which illustrates that the city has a wide range
of product in its hotel room inventory. The market value per room ranges from a low of 16,931 for the Red Roof Inn to a high of 87,714 for the Residence Inn. The age and type of construction for each hotel has some correlation with market value as does the amount of reinvestment or lack of reinvestment (maintenance/upgrades) in each property.
What amount does each hotel pay to the city in annual property taxes? The amount of city property taxes per hotel was calculated and divided by the
number of rooms, resulting in a total city property tax per hotel room. Each room in the Red Roof Inn paid 57 in city property taxes in 2016. Each room in the Days Inn paid 69 in city property taxes in 2016. The highest city property taxes paid per hotel room was the Residence Inn at 303.
What is the police call distribution per hotel? The following charts compare the percentage of the total hotel rooms city-wide versus the percentage
of police calls for each hotel. For example, the Red Roof Inn has 12 of the total hotel rooms in the city while they received 43 of the total police calls to hotel properties. Conversely, the Residence Inn has 12 of the total hotel rooms and received only 5 of the total police calls in 2015.
Do the city property taxes collected from each hotel cover the cost of providing annual police services? In order to obtain a general idea of the
cost of each police call, we created a simple formula to calculate the cost of each police call in Plymouth. This was done by taking an average of the total annual police budgets from 2011 to 2015 and dividing by the average annual city-wide police calls from 2011 to 2015. This calculation results in a cost of 247 per police call which was then multiplied by each hotel s average annual police calls from 2011 to 2015. The estimated cost for annual police calls varies from a low of 3,832 at the County Inn Suites to a high of 45,460 at the Red Roof Inn. There are many variables that are not accounted for in this methodology, but this ratio illustrates a simple means of relative cost allocation.
The next step calculated the five year average of city property taxes collected from each hotel to determine whether or not the cost of providing
police services exceeds the amount of city property taxes collected. The result of this exercise is that two hotels greatly exceed what is collected in property taxes versus police services received (calls). The Red Roof Inn has a negative variance of 43,404 and the Days Inn a negative variance of 19,041. For example, the Red Roof Inn received 22 times more in police services than what they paid towards police property taxes. Similarly, the Days Inn received nine times more in police services than what they received. Two hotels (Ramada, Comfort Inn) also had small negative variances while the Residence Inn, Country Inn Suites and Crowne Plaza had annual positive balances, meaning the cost of providing police services was less than what the city received in property taxes for this purpose.
Is there a correlation between hotel room rates and the number of police calls? When reviewing police calls and hotel room rates, there appears to be
similar trends as illustrated in earlier questions. Based on daily room rates, the graph below shows a direct correlation between lower priced hotels and higher volumes of police calls. Conversely, there is also a direct correlation between higher priced hotels and lower police calls.
Have the hotel owners reinvested in their buildings and if so, how much has been reinvested? Building permit data from 2006 through 2016 was reviewed
to determine the amount of reinvestment in each hotel over this time span. For comparison purposes, we have excluded the Residence Inn because almost all of the permits issued were for new construction in 2007 ( 10.8 million). One hotel, the Comfort Inn has spent 957,000 on improvements to its adjoining restaurant (Axel s and Lucky s 13 Pub). We have excluded restaurant related permit values to obtain a better idea of reinvestment amounts spent strictly on hotel rooms and common areas.
Each hotel has reinvested at different rates over the last 10 years. Certainly, the age of the building as well as how well it has been maintained
are both factors that have some correlation to how much or how little is reinvested. The Comfort Inn has reinvested 948,793 ( 8,179 per room) since 2006 while the Days Inn has reinvested only 148,562 ( 1,338 per room) during this same period. Of the 148,562 in total permit value for the Days Inn since 2006, 77,200 or 52 , has been issued in 2015 and 2016 for repairing water damage and mold, permits for what most would consider emergency repairs, not reinvestment in the property.
At this time, the data presented is for informational purposes only and includes data for all Plymouth hotels. The council may wish to review
additional information, discuss this matter further or consider amending the nuisance ordinance to include a system based on tracking and penalizing the number of violations. There may be other ideas to explore that would address hotel management behavior and encourage reinvestment with the ultimate goal of making our hotels and community safer. Please let me know if you are interested in scheduling a future study session on this topic.