Room tax hike could pay for convention center upgrades
Published 12:32 pm Wednesday, June 29, 2016
- Convention Center General Manager Russ Vandenberg addresses a council workshop about the center's plans to expand meeting room space.
With a Seaside School District bond vote likely in November, city officials steered away from bringing another capital project to the voters.
At a City Council and Seaside Civic and Convention Center Commission workshop last week, City Manager Mark Winstanley provided options to bring a nearly $15 million convention center upgrade to fruition. By the end of the evening, councilors recognized the need and appeared to be leaning for an increase in hotel room tax to fund it.
“If 1 or 2 percent would cover it, and we think the hotel properties are on board with that, why would we go with anything else?” Councilor Randy Frank asked.
With a land gift of 80 acres from Weyerhaeuser Co., the school district is planning a bond referendum to create a new high school campus east of South Wahanna Road in Seaside. While a previous bond vote of $128.8 million failed with voters in 2013, the district is considering a project on the donated land. Costs have not been presented.
At this week’s convention center workshop, the center’s General Manager Russell Vandenberg said without center expansion the city risked losing convention traffic. “It’s not so much about bringing larger, bigger groups, as it is about keeping the groups we have,” he said.
The No. 1 reason a group does not return to Seaside’s convention center, Vandenberg said, is because of insufficient space. He said there are groups now using the facility — including the Oregon Chess Federation, Sectional Bridge Tournament, and American Fisheries — requiring more convention space. The expansion, he said, will meet the needs of 60 percent of the organizations within a 300-mile radius of Seaside.“By building this renovation, we’ll increase our market penetration by 20 percent,” Vandenberg said.
The Steele Associates Architects’ plan seeks to bump out the existing Necanicum Ballroom and support larger, more diverse events. Drawings also call for mid-size meeting room size increases and quality improvements. The renovation would be confined to the existing property. The center would remain open during construction.
The project would be done in phases, Vandenberg said, to allow operation of the facility with “the least amount of impact” to visiting groups.
The ultimate price tag is $14.6 million, he said. “That would be the out-the-door facility renovation.”
Funding of the project is not only financial, Winstanley said. “It’s also political.”
Winstanley provided options including a bond sale, formation of an urban renewal district, a voter referendum to raise property taxes or room tax. “There are downsides to this,” he said. “You’re telling people you’re going to raise their taxes.” Convention center costs could raise taxes $195 per year on the cost of a $250,000 home.
“You have a school district that’s going out on the ballot in November to build a new school,” Winstanley said. “You’re going to be competing for tax dollars with them. It probably won’t be very popular with the school district, and you may be having some impact on the psyche of the voter at that time also. Some voters may look at that and say, ‘Jeez, everybody’s looking for money for something,’ or others might say, ‘This one’s a lot cheaper than that one.’ Voters make decisions for all kinds of reasons.”
The convention’s last expansion in 1991 was funded by an increase in the room tax from 5 to 6 percent, and later, 6 to 7 percent, Winstanley said. “Part of that was for the cost of expansion,” he said. “Room tax is also an integral part of the convention center.”
“I don’t see why we wouldn’t want to use an increase in room tax,” Councilor Dana Phillips said. “Those are people coming to use the convention center. Then we are not competing with the schools. Why wouldn’t it be a win-win to go after the room tax?”
“I would not want to be on the ballot with the school district,” Councilor Jay Barber added. “I would be in favor of a combination of revenue bonds and a room tax increase.”
A 2-percent increase would be “about the most” hotel owners could afford, Vandenberg said, perhaps phased in incrementally.
A future workshop will determine the council’s final direction. The council will return in a workshop “to narrow this down,” Winstanley said. “I need you to say, ‘I like this,’ or ‘we don’t need this at all.’ I’m not sure there are many people who would say, ‘By golly, I’m not staying in Seaside because of a 2 percent room tax increase.’”