Judge's ruling on hotel room assessment puts Tourism Improvement District in doubt

A city of Tulsa hotel assessment intended to bring in millions of dollars a year to market the city and participating hotels is invalid because it did not follow state law, a Tulsa County District Court judge ruled on Thursday.

The ruling casts doubt on the future viability of the city’s Tourism Improvement District, which the Tulsa Regional Chamber and city officials had argued was a much-needed tool for the future development of the city.

The proposed 3% assessment applied to hotels with 110 rooms or more. It was expected to raise $3 million to $4 million a year, with the funds administered by a private nonprofit organization created by the Tulsa Regional Chamber.

In her ruling, Judge Linda Morrissey found that the city arbitrarily set the threshold for participating hotels at 110 rooms or more.

“The Legislature did not grant the city of Tulsa the authority to legislate the number of rooms a hotel must have in order to be subject to the TID,” Morrissey wrote. “The level set by the Legislature, ‘50 or more rooms’ is ‘perfectly clear’ and unambiguous.”

Morrissey also notes that both the city and the plaintiff in the case, TOCH LLC, presented evidence showing that the threshold for hotels to participate in the TID was increased to 110 after the city could not get a majority of hotels with 50 or more rooms to support the assessment.

Attorney Lee Levinson, representing the plaintiff, said he was pleased with the ruling.

“It is a bright light that the court would render its decision based solely on the facts and law concerning the case, rather than all the outside pressures placed on the court by the issuance of false and misleading press releases, in today’s times being called ‘fake news.’ ”

Levinson was referring to claims made by the Tulsa Regional Chamber that it had lost the chance to bid on the BassMaster Classic because the TID assessment had not been collected as expected.

An attorney representing Tulsa Hotel Partners LLC said the judge’s ruling will be appealed.

“We are disappointed,” attorney Kyden Creekpaum said. “We continue to believe that the facts and the law are entirely on our side and that we will eventually prevail. In the interim, the result hurts all Tulsans and will result in the potential loss of additional events and opportunities such as the NCAA Tournaments and Major League Fishing.”

Jack Blair, the mayor’s chief of staff, said the city respects the judge’s decision and will review it to determine the city’s next steps.

“Regardless, the city will continue to be aggressive in pursuing convention and tourism business through our annual contract with VisitTulsa,” Blair said. “Over the last few years, the city’s normal hotel/motel tax allocation to VisitTulsa — not including TID funds — has increased by more than 50%, from $2.2 million in 2014 to $3.4 million this year. We still have high expectations for results from the increased public investment.”

Morrissey in June issued a temporary injunction in the case, at which time the city ceased collecting the assessment.

John Snyder with TOCH LLC filed the lawsuit seeking to stop the TID. Snyder and about two dozen other hotel operators and hotel owners vehemently opposed the assessment as it was making its way through the city approval process.

TOCH is made up of Brickhugger LLC and investors Neal Bhow, Bruce Taylor and Levinson. Brickhugger principals John and Tori Snyder, along with their daughter, Macy Snyder-Amatucci, redeveloped the historic Mayo Hotel and the Detroit Lofts.

Featured video