Guest view: Hotels are good for the economy

By Mayor Rich Constantine

Over the past week, there has been much back-and-forth and misguided information on social media regarding the city council’s decision to approve the land use for two hotels in the Madrone Village Shopping Center. Because of this, I thought it was important for me to share the reasons behind the council’s decision and the benefits to Morgan Hill. I hope this information is useful to you as you discuss among your family and friends your opinions about what is happening in our community.

First, let me make a broad statement before getting into specifics. Hotels are good for the Morgan Hill economy. Hotels provide needed revenue to the city. Currently, the city collects a 10 percent Transient Occupancy Tax (TOT) that annually generates $2.7 million from hotels and lodging facilities in Morgan Hill. Starting March 1, the TOT will increase to 11 percent and the city is projected to collect almost $3 million in TOT every year to support the general fund.

Additionally, a healthy supply of hotel rooms supports local businesses and visitors, and that is also good for the economy. Many of our existing businesses in Morgan Hill have expressed the need for more hotels to support their business travelers. In fact, several of Morgan Hill’s businesses must provide lodging for their business travelers in San Jose because Morgan Hill’s hotels cannot accommodate them.

Perhaps the most important thing to note is that the hotel developers have gone through an extensive review process with city staff, the planning commission and their own research, which indicates Madrone Village would be a successful location for new hotels. Due to the proximity to the freeway, this location provides excellent access for visitors without impacting local traffic.

As a city, we are fighting to preserve our ability to control residential growth as the state of California continues to pass legislation limiting our ability to control growth locally. Due to these ever-increasing limitations, we know that housing will continue to be constructed even if we oppose it.

Businesses, including hotels, are a net positive in tax revenue, which in turn provides funding for essential city services such as police, fire and road maintenance. The hotels are not only new businesses; they will also support our current and future businesses. Without future business growth in Morgan Hill, the state-mandated residential growth, even if minimal, will continue to strain our ability to provide basic services to you.

Morgan Hill is special. Residents and visitors alike notice this and comment on it all the time. Maintaining this special feel is all about the delicate balance of meeting the needs of our residents, businesses and visitors while maintaining fiscal sustainability.

A variety of revenue sources, like the tax from hotel stays, are important to our fiscal health and contribute to our ability to provide essential city services. We support the hotels because they are a good complement to our business community; they support our vision for tourism; and they support our plan for fiscal sustainability.

Rich Constantine is the Mayor of Morgan Hill. He can be reached by email at [email protected]

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