This is the second piece in our Opinion format — personal takes signed in my own name, with the case laid out and the strongest version of the disagreement taken seriously. The first was about Catalina Avenue. This one is about how this city pays for itself.
I run businesses for a living. The exercise I do most often, when I'm trying to think clearly about a company, is to strip away everything except the unit economics: what does it cost to acquire a customer, what does each customer generate in revenue, and what is the net contribution per unit after the costs of serving them are accounted for. The companies that get this right reinvest the surplus into acquiring more customers. The companies that get it wrong leave the surplus on the table, or worse, treat the customers as a nuisance to be tolerated rather than an asset to be developed.
A city is not a company. I want to be careful about that comparison before I extend it any further. A city's job is not to maximize profit. It is to serve its residents — to provide the services, infrastructure, and quality of life that justify the taxes those residents pay. But cities, like businesses, run on revenue. And when a particular revenue source has an unusually favorable structure — when it generates funds that residents themselves would otherwise have to pay for — that revenue source deserves serious, intentional thought about how to grow it.
In Redondo Beach, that revenue source is tourism. And as of November 18, 2025, the city council voted unanimously to ask voters to do something about it.
The decision on the table
On November 18, the Redondo Beach City Council took the most consequential vote on city revenue in twenty years.
After a discussion in which Councilman Zein Obagi proposed raising the Transient Occupancy Tax from 12 percent to 14 percent with future authorization to go to 15, Councilman Chadwick Castle agreed there was “room for us to increase,” and Councilman Scott Behrendt raised concerns about whether a higher rate would discourage a potential new hotel at the South Bay Galleria site, the council voted 5-0 to direct staff to draft a ballot measure of up to 15 percent. Councilmember Paige Kaluderovic seconded Obagi's motion. The motion authorizes a future council to set the actual rate anywhere up to that cap.
City Treasurer Eugene Solomon spoke during public comment to thank the council. His framing of the moment is worth quoting in full: “We're not doing this for the next month, the next year, but the next, as it turns out, 20 years.”
He's right. Voters will see this measure on the June 2, 2026 primary ballot. The decision they make will shape what the city can afford to do for the next two decades, the same way the 2005 vote on Measure G — which raised the rate from 10 to 12 percent and was the last time this question was on the ballot — shaped the twenty years we just lived through.
It is, in our view, a more interesting decision than the rate itself.
The numbers
Before getting to the bigger question, the numbers, sourced from public records:
Redondo's TOT rate has been 12 percent since the spring of 2005. Voters approved Measure G that March by a margin of 56.2 percent to 43.8 percent — 1,787 yes to 1,394 no. The municipal code caps the rate at 12 percent, and the city has been at the cap for twenty-one years.
In Fiscal Year 2022-23, the most recent year with finalized data published by the California State Controller, Redondo collected $6,174,326 in TOT. According to Easy Reader's reporting on the November 18 meeting, the tax has brought in “$6-9 million annually (net) for the past five years.” TOT accounts for somewhere between 6 and 8 percent of the city's General Fund revenue, depending on the year — a substantial line item, and one of the few that arrives at City Hall having been collected almost entirely from people who do not live here.
For comparison, the current TOT rates of nearby cities:
- ·Santa Monica: 15 percent (effective March 1, 2023)
- ·Manhattan Beach: 14 percent (effective July 1, 2023)
- ·Hermosa Beach: 14 percent (effective January 1, 2020)
- ·City of Los Angeles: 14 percent
- ·Inglewood: 14 percent
- ·Long Beach: 13 percent
- ·Redondo Beach: 12 percent
- ·Hawthorne: 12 percent
- ·LA County (unincorporated): 12 percent
- ·Torrance: 11 percent
Of the four South Bay beach cities, Redondo's rate is the lowest. It is worth noting that as recently as 2019, Manhattan Beach was at 10 percent and Hermosa Beach was at 12 percent. The shift to 14 percent across the South Bay is recent.
A 14 percent rate, compared to 12 percent, would mean roughly $2 to $5 more per night for a typical hotel stay. In California in 2025, 23 of 28 TOT increase measures placed before voters were approved. Hotel-tax measures pass more reliably than nearly any other municipal revenue question, for the obvious reason that the people paying the tax mostly do not vote where it's collected.
A cautionary note from the recent past
Before going further, one piece of context that has not been fully surfaced in the public conversation deserves a brief mention.
The city is currently running roughly $3 million per year below what its TOT collections would otherwise be — money that is being absorbed by a financing arrangement from a decade ago. In 2010 and 2013, the council approved a three-hotel project at 2420 Marine Avenue (172-room Residence Inn, 147-room Hilton Garden Inn, and 180-room Homewood Suites) on a structure that created an Authority Funded Reserve, capped at $2.5 million annually, drawing from the project's tax revenues to backstop the developer's construction financing. Per the City Manager's transmittal letter for the FY 2023-24 Proposed Budget, this AFR recovery “was initially estimated to have been completed in FY 2022-23.” It has not been completed. The hotels are built. They are operating. The TOT is being collected. A deal structure signed under deadline pressure a decade ago is what is preventing those dollars from reaching the General Fund.
This story deserves its own piece, and we will give it one. The reason it matters here is that it is the cleanest illustration in the city's recent history of what happens when a tourism deal is structured without operational discipline. Any conversation about raising the TOT rate has to include the conversation about how the city structures its agreements with the operators who collect that tax. The rate is one lever. Deal structure is another. The Marine Avenue history is what happens when the second lever gets pulled badly.
First principles
Let me reason about this the way I would about a company's revenue mix.
A city has, broadly, three sources of operating revenue. It can tax its residents directly (property tax, utility users tax, sales tax on resident purchases). It can charge users for specific services (water, sewer, parking, permits). Or it can tax non-residents who use the city's amenities (TOT on hotels, sales tax on tourist purchases, parking revenue at the pier).
Of these three categories, the third has a structural advantage the other two do not. A dollar collected from a visitor is a dollar that is not collected from a resident. Every additional dollar of tourism revenue is, mathematically, a dollar of pressure removed from resident taxes. It is the closest thing a city has to a structurally favorable revenue source — funds that pay for resident services without being paid by residents.
This is not a controversial observation. It is what nearly every successful tourism-leveraged city in California has built its budget around. Cities that intentionally develop their tourism infrastructure have larger per-resident budgets, better resident services, and lower per-capita resident tax burdens than cities that do not.
Redondo has the underlying assets to be more deliberate about this and is not currently choosing to be. We have the pier. We have the harbor. We have the Esplanade. We have weather, location, and a regional draw that the inland cities of California would pay almost any price to acquire. We also, uniquely among comparable beach cities, do not allow short-term rentals — every dollar of Redondo TOT comes from hotel rooms, which means hotel capacity and hotel occupancy are the only meaningful levers we have. What we lack is a coherent strategy for using the levers we do have.
The marketing question
Here is the part of this argument I think is most often missed.
When city governments talk about growing tourism revenue, the conversation defaults almost entirely to supply — should we approve more hotels, should we develop the waterfront, should we expand the conference space. These are real questions. They are also slow questions. A new hotel takes between five and seven years from initial proposal to stabilized operations, and that timeline assumes everything goes smoothly. The Marine Avenue project was approved in 2010 and reached full operation in 2017. The South Bay Galleria redevelopment, which has been discussed for over a decade, is still notional.
The other lever is demand. The same fixed number of hotel rooms can generate more or less revenue depending on how full they are and what they charge. Occupancy and average daily rate are the inputs. Marketing, events, branding, and visitor experience are the levers that move them. And, crucially, those levers have payback periods measured in quarters, not decades.
I want to be specific about why this matters. Per the Tourism Board's most recent annual report to the council, the city's tourism marketing efforts produced over 400,000 website users, 460,000 sessions, roughly 60,000 booking-engine searches, and pilot Expedia campaigns that reported returns of up to 12:1. The board acknowledged that despite growing engagement, TOT receipts have been roughly flat — explaining the gap by citing “rate compression in the hotel market” and longer visitor decision windows. That is a sophisticated observation. It is also a description of exactly the conditions in which marketing investment pays the largest premium: when hotels are competing on price, the city that drives more demand to its destination is the city whose hotels can charge more.
The straightforward implication is that, for every dollar the city has available to invest in tourism revenue, the question of whether to spend it on a new hotel deal or on marketing the destination is not obvious. Often the marketing dollar is faster, cheaper, and lower-risk.
There is, however, a structural problem here that any honest operator has to acknowledge: city governments are generally not good at marketing. This is not a critique of the people doing the work; it is a structural observation about how municipal departments are staffed, budgeted, and evaluated. The talent pool, the procurement rules, the political accountability cycles, and the institutional culture all work against the kind of fast-iteration, data-driven, channel-optimized customer acquisition that drives modern tourism marketing. A small private-sector marketing team can outperform a much larger municipal one on the same budget, and the reasons are mostly structural rather than individual.
What this implies for Redondo: any serious tourism strategy needs to evaluate not just how much the city spends on marketing, but how it spends it. Outsourced specialist agencies, performance-based contracts, partnerships with destination marketing organizations, and clear measurement frameworks are not luxuries — they are the difference between marketing spend that compounds and marketing spend that disappears. This is exactly the kind of operational question that operator-experienced council members ought to be asking, and that voters ought to be asking the council to ask.
A second-order point: an increase in the TOT rate, by itself, does not grow the city's tourism revenue in any structural way. It simply takes a slightly larger slice of the existing pie. The supply-side decisions (more hotels) and demand-side decisions (better marketing) are what grow the pie. The rate decision is about how the existing pie is divided. Both questions matter. Voters considering the ballot measure in June should be holding the council accountable for the second question as much as the first.
The kind of city we want to be
I want to address head-on the question that lurks underneath every conversation about Redondo and tourism.
The fear that animates a lot of resistance to growing tourism in this city — and it is a real fear, not a paranoid one — is that more tourism means becoming more like Santa Monica. Crowded boardwalks. Streets that belong to visitors and not residents. A downtown that has been gradually optimized for foot traffic from out-of-town and away from the people who actually live and work in it. The slow conversion of a real city into a destination.
That fear is legitimate, and the way to address it is not to dismiss it but to be precise about what the alternative looks like.
There is a kind of tourism that competes with residents for the same scarce resources — sidewalk space, restaurant tables, parking, the quiet that residents bought their homes to have. There is another kind of tourism that coexistswith residents because the spaces it occupies are designed for both at the same time. Riviera Village is the local example. The Esplanade is another. These are not “tourist spaces” set apart from “resident spaces.” They are spaces that work as one when the population shifts toward visitors on a Saturday afternoon, and they work as the other on a Tuesday morning when it's mostly residents walking dogs. The infrastructure is the same. The character bends without breaking.
The phrase I keep coming back to is living on vacation. The reason a lot of us chose Redondo over more inland communities is that everyday life here feels closer to a vacation than everyday life feels almost anywhere else in the country. The walk to the pier. The morning at the Esplanade. The fish tacos. The fact that you can run a real business and raise a family and still have all of it within fifteen minutes of saltwater. The character that makes Redondo worth being a tourist destination is the same character that makes it worth being a resident. The two are not in opposition. They are the same thing.
The version of tourism strategy I am advocating for is the version that doubles down on that. More of the public realm investments that work for both visitors and residents. Better signage and lighting that benefits the resident walking home as much as the visitor finding their hotel. A pier and harbor that work as a Tuesday morning for a retired Redondo couple as well as they work as a Saturday afternoon for a family up from Long Beach. Hotel capacity, where it makes sense, located in places that absorb visitor activity rather than displacing residential character.
This is what I mean when I say tourism done well is budget infrastructure. It is not an industry overlaid on a city. It is a way of organizing public space that produces revenue and improves daily life at the same time. The two are not in tension when the work is done right. They are in tension when the work is done badly — when development gets concentrated, when public spaces get privatized for events, when visitor convenience starts to override resident livability. The job of a council, and of voters, is to know the difference.
The case I'm making, in one sentence
Voters should think about the June ballot measure as the rate question, but should hold the council accountable for the larger questions: how the city's marketing dollars are spent, how the next hotel deal is structured, and whether the public realm investments being planned right now serve residents and visitors at the same time or trade one against the other.
The honest pushback
I owe readers the strongest version of the disagreement.
“You're saying the quiet part loud — you want Redondo to become Santa Monica.” I just spent four paragraphs arguing against that. The version of tourism strategy I am describing is the version that explicitly does not trade resident livability for visitor revenue. The Santa Monica failure mode is real and worth avoiding. The way to avoid it is to be deliberate about which kinds of tourism investment work for residents simultaneously, not to refuse the conversation entirely.
“More tourists means more traffic, more parking pressure, more noise.” Tourism imposes real costs. The mistake is assuming those costs scale linearly with tourism revenue. A city that designs its tourism infrastructure well — adequate parking, transit connections, visitor districts concentrated where they belong — generates substantially more revenue with substantially less neighborhood impact than a city that lets tourism happen by accident. The current Redondo waterfront is closer to the accident end of that spectrum.
“The Marine Avenue hotels haven't actually delivered the revenue the city was promised.” Correct. And that is the strongest single piece of evidence in favor of being moresophisticated about tourism deals, not less. The hotels were built. They are operating. The TOT is being collected. A financing arrangement from a decade ago is currently absorbing the city's share. The lesson is to be more disciplined about the agreements the city signs, not to stop developing the underlying assets.
“This sounds like the prelude to a CenterCal-style megaproject.” It is not. Everything I have described is operational, incremental, or modestly scaled. Pier maintenance. Marketing investment. Smarter future lease structures. A council debate about a 2-point TOT rate increase that voters would have to approve. None of it requires a single large-scale development. None of it triggers Measure DD. The argument for treating tourism intentionally is the opposite of the argument for a single transformative project.
“The council just voted unanimously to raise the tax. Isn't that enough?” No. The rate decision is a fraction of the total decision. Raising the rate without thinking carefully about marketing investment, deal structure, and public-realm design is exactly the failure mode that produced the Marine Avenue AFR situation. The rate is the simplest lever. The other levers are the ones that compound.
What I'm not saying
I am not endorsing or opposing a specific TOT increase ballot measure, which the council has not yet finalized. I am not advocating for any specific development. I am not arguing the existing harbor and pier tenants are doing anything wrong. I am not saying Redondo should pursue tourism without limit, or that tourism is more important than resident quality of life — it is, in fact, a means to that end, not a substitute for it.
I am saying that a $6-to-$9 million annual revenue stream, growing or shrinking, intentional or accidental, deserves the same kind of careful operational attention that any business owner would give to a top-three revenue line. The council just voted to ask voters to give them more of it. Voters should make their decision with the full picture in view. The full picture includes the rate, but it also includes how the city spends what it already collects, how it markets the destination that produces it, how it structures its deals with hotel developers, and whether the spaces it builds and maintains work for the people who live here and the people who visit at the same time.
These are fixable things. Fixing them would meaningfully change what the city can afford to do for the residents who actually live here.
I think that's worth doing. That's the opinion.
— Samuel Thompson