Apr 17, 2008

City tallies Tour of California costs

Hotel tax could help defray event's $167,000 price tag

By Kristina Peterson / Daily News Staff Writer

Palo Alto hotels may help the city break even on hosting the prologue of the Amgen Tour of California, city staff said this week.

The costs associated with the bicycling event have been a closely guarded secret in the two months since Palo Alto and Stanford University co-hosted the 2.1-mile time trial. But this week City Manager Frank Benest said the prologue's organizers may have succeeded in covering its costs when tax from hotels is added into the calculations.

Running the Feb. 17 event cost Palo Alto $67,000 - mostly police, public works and overtime costs, Benest said. On the Stanford side, the tab was slightly more than $100,000 for public safety and security costs, as well as permits, insurance, clean-up of Palm Drive, parking staff and equipment for a bike valet service, said spokesman Matthew Bahls.

To offset the bill, a local organizing committee raised a net sum of $76,000, said lead organizer Alison Williams. The committee actually raised more than $100,000, but had to spend $15,000 on hotel rooms for race officials and some cyclists, in addition to other expenses, she said.

That leaves Palo Alto, Stanford and race organizer AEG with a bill of roughly $91,000 to split three ways, as stipulated in the original contract. But Benest said the city's third likely will be covered by the 12 percent tax local hotels pay on room rates.

With an estimated 2,200 room nights generated by the race, the city could rake in another $95,000 to $125,000, depending on individual hotel rates, Benest said.

Jim Rebosio, general manager of the Palo Alto Sheraton and Westin hotels, said local lodging establishments saw a flood of business in the days leading up to the race.

According to a local hotel occupancy database, Palo Alto's most popular hotels saw their occupancy rise from 49 percent last year to nearly 90 percent during the same weekend this year, Rebosio said.

"That event sold out hotels in the city on a weekend that otherwise would not have been sold out," he said.

And some local restaurants benefited from the influx of healthy eaters. Fay Khan, owner of a Togo's in Menlo Park, said she made roughly 900 sandwiches over a period of three days for the cyclists.

"We are a small business," she said. "If I make a sale like that, it's a big thing for me."

Whether the city and Stanford will host the event again next year remains an open question, both sides said.

Joe Manning, a member of the local organizing committee, said the area has been asked to bid again on the prologue or perhaps the finish, if the race organizers decide to start in the southern part of the state next year and move north.

"I'm extremely optimistic about being involved next year and making it even more successful," Manning said.

But while most spectators and local planners agreed the event was enjoyable and well-organized, the race may not be the vital promotional tool its national sponsors make it seem.

"Worldwide recognition for Stanford? You know, I think we might have what we need already," said university spokeswoman Jean McCown. She said the university was evaluating whether it wants to co-host the race next year.



E-mail Kristina Peterson at kpeterson@dailynewsgroup.com.