In January, 2013, the Pier South Resort hotel opened on the sand in Imperial Beach after more than a decade of delays. The project got a $7 million push from the city, enough to cover 25 percent of the $28 million price tag.
Supporters argued that the city's investment — which came from the redevelopment fund — would spur the transformation of a funky beach town into a vacation destination. Besides, it would be paid back, at least eventually, from a 10 percent room tax, formally known as a transient occupancy tax.
The rosiest projections had the ante coming back at the rate of $500,00 per year and paid back in full in as few as 14 years; on the least rosy side, predictions called for the $7 million to be recouped in 20 years.
According to records from the city clerk, the worst-case scenario — and then some — had been realized during the hotel's freshman year of 2014. The total revenue from the room tax soared more than $300,000 from the year before, with Pier South being the sole new source for any appreciable room taxes.
At $300,000 a year, it would take not 14, not 20, but 23 years to see that $7 million again.
How things change. In 2015, the room taxes brought $680,000 into municipal coffers, a jump of 25 percent compared to the year before, with the hotel being the source of some $440,000 of it.
So, at $440,000 a year, how long will it take to collect $7 million at this latest rate? Divide $7 million by $440,000, and see how the pace quickens. If the tax yield stays at an annual level of $440,000, the coffers will fill back up in 16 years, seven years faster than the reckoning gleaned from 2014.
The revenue stream to the city from the tax more than doubled after the hotel's first year in business, going from $240,000 to $542,000. Then, last year, it went up to $680,000.