Pacific Grove hotels and inns fight back against a tax measure.

Don Martine owns the Martine Inn, a fully restored 1899 mansion with guest rooms overlooking Monterey Bay in Pacific Grove, just down the block from the Monterey Bay Aquarium. With a prime location, business should be good, but he says occupancy rates never fully recovered since the 2008 recession, and hotels struggle to be profitable with competition from short-term rentals.

Now Martine and other hoteliers are feeling pressure from another front: City Hall. The Pacific Grove City Council placed a ballot measure on the Nov. 6 ballot to raise transient-occupancy taxes from 10 percent to 12 percent. A former two-term council member himself, Martine does not mince words when he says what he thinks about Measure U.

“It’s a rip-off,” he says. Pointing to upcoming developments like the Holman Building condominiums, Martine believes the city has enough future revenue. “How greedy can you get? And you need TOT on top of that? That doesn’t make sense to me.”

Mayor Bill Kampe is well aware the hotel owners are angry, but believes a tax on overnight visitors will not impact hotel competitiveness – Measure U will result in $4 extra on a $200 room. (Surrounding cities tack on fees to TOT, which puts a 12-percent TOT at a similar level. Marina charges 12 percent and its voters are weighing a jump to 14.)

“We have undervalued Pacific Grove for a long time for the visitor experience that it is, and it’s absolutely fair we ask visitors to pay for the maintenance that is needed,” Kampe says. Revenue from the Holman Building will only be about $50,000 annually, and Measure U would generate an estimated $1.2 million. Meanwhile, the city is facing $2.7 million a year in increased pension costs, plus deferred maintenance.

Hotel owners and the Pacific Grove Chamber of Commerce are putting up a fight with campaign contributions to defeat Measure U, but it might be in vain: a city-sponsored survey taken in April showed 70 percent of residents surveyed support the increase.