County confirms hotels exempt from Measure A constraints

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Editor’s note: A previous version of this article included inaccurate or misleading information. San Benito County has had a Transient Occupancy Tax (TOT) since 2018. What the Board of Supervisors is considering is a temporary tax exemption—based on the level of investment—to attract new hotels. In addition, Supervisor Kollin Kosmicki has clarified that he did not take a position on the Measure A ballot initiative and remained neutral, though he supports allowing voters to decide where development occurs. He added that he favors slower housing growth and commercial development “in the right places,” principles that overlap with some of Measure A’s supporters.

A hotel built in San Benito County’s rural areas wouldn’t trigger Measure A, which now requires a countywide election for most commercial development projects in unincorporated zones, according to county officials. 

The clarification came during a Sept. 28 San Benito County Board of Supervisors meeting, as the county explores exemptions to its hotel tax, designed to boost revenue.

Director of Planning, Building, and Code Enforcement Abraham Prado said that hotels are exempt from Measure A because they don’t require rezoning. Instead, they can move forward under a conditional use permit, which follows the regular planning process: first reviewed by the San Benito County Planning Commission and, if denied and appealed, sent to the Board of Supervisors.

That means Measure A wouldn’t stand in the way of the county’s broader goal: using the proposed hotel tax exemptions to attract new hospitality businesses in unincorporated areas.

Approved by voters last November, Measure A restricts commercial growth in unincorporated areas unless it’s approved through a countywide election. Since December, any proposal to rezone agricultural, rural, or rangeland for commercial use—often the first step in any development—must go before voters. The measure also eliminated four Hwy 101 sites that the county had previously designated for commercial projects.

Supervisor Kollin Kosmicki said, “The people that pushed Measure A are supportive of hotels,” and said he was looking forward to new hospitality infrastructure in the area between Hollister, Tres Pinos and Pinnacles National Park.

“My understanding is that hotel development was actually something that [supporters of Measure A] are well aware that the current county rules do allow hotels with conditional use permits,” he said. “They support the tourism development.”

Since Supervisor Ignacio Velazquez joined the board in January, and Kosmicki became chair, the new majority, which also includes Supervisor Dom Zanger, has shifted the county’s revenue-producing strategy toward tourism.

The board even renamed the Economic Advisory Committee to the Tourism Advisory Committee back in January.

As part of that push, the committee composed of Zanger and Kosmicki designed the hotel tax exemptions for the unincorporated areas to attract more hospitality developments. There’s currently only one hotel property, at Ridgemark Golf Club, located outside city limits.

Formally known as the Transient Occupancy Tax Incentive Program, the plan would refund developers up to 90% of hotel tax revenue for up to 10 years to attract major hotel and resort investments or renovations. The proposal also considers expedited permit processing and waivers or reductions of development processes and fees. The goal is to spur tourism and jobs while ensuring the county benefits from the revenue once the rebate period ends.

Velazquez said that Measure A and the proposed exemptions “fit in perfectly.”

“There’s a lot of confusion,” he said. “Some were saying Measure A shuts down everything. It doesn’t. What Measure A tried to do was incentivize enhancing the beauty of our community through projects like this.”

The hotel tax exemptions have not yet been approved, but have the support of all five supervisors. 

County staff will make adjustments to the plan and bring it back to the board for discussion at a future meeting.

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