Bravo Hotel Tax Incentives - Testimony: Randall Landes, Interim President and CEO of Visit KC
Updated: Dec 19, 2021
[Mr. Landes]: Good afternoon. Mr. Chair and members of the committee, Randall Landes, Interim president and CEO of Visit KC. I'm here today to express our concerns regarding the inclusion of the Visit KC’s contractual share of hotel taxes, also known as Super-TIF, within the city's development incentive package for the proposed hotel project.
Prior to his departure, our previous CEO had spent a lot of time talking about the market issues relative to this particular project, thing is on record at the TIF commission, certainly the press picked it up and even commissioned a study with Jones Lang Lasalle to basically say, you know, the city should rethink tax increment financing, aka Super-TIF, until demand is sufficient and the market is healthy.
So that was sort of his, his parting shot relative to this project and whether or not the market sort of needed this relative to where we are with occupancy and average daily room rate. I'm not here to rehash those issues if you want a copy of the study. I would be happy to forward it to you.
I'm here to talk about the budget of Visit KC because that's really kind of our issue right now. As you remember during 2020 we had a little bit of an issue relative to the hotel tax collection which impacted Visit KC mightily relative to our budget.
We cut our budget, our staff in half, we downsized, we shuttered our operations, we moved to shared office space and we really never, we haven't really recovered quite yet. We're using borrowed funds. We got some grant money and thanks to the city we got some relief on our hotel tax to true up at fiscal year end. But before that, before the pandemic, Visit KC was already concerned about its budget and in it’s 2018 strategic plan, one of the top priorities was to find more money to do proper marketing and promotion of this destination.
And part of that had to do with the two decades prior sets of approvals for Super-TIF projects. The Super-TIF that have already been approved, were eating away at the 40% share of hotel tax that's passed through to Visit KC and enables us to act on your behalf to market and promote the destination. Thus far, $1.4 million is what we pay out of our 2018 budget and 2023, it's going to be 2.2 million.
So our viewpoint is incentivizing hotel projects with Super-TIF prioritizes over and above operations and maintenance of the center and marketing promotion of the destination, the development of additional rooms that we don't think are warranted.
I want to thank Jim and the group because they have reached out to us to offer means to make us whole. I will tell you, those discussions, we had an email last night at 8:00, they are underway. I will tell you, my opinion is that they are not sufficient.
The security that is described in the developers proposal does not cover the bills that we will be paying, which will be between $230,000 and $470,000 a year from our budget. That's the way it works. You send us the taxes, then you bill us for the Super-TIF and we pay it back. So this will just add to that $2.2 million that's already in the pipe. Happy to answer any questions.
[Chairman Barnes]: Thank you. Mr Landes. I was, I'm just gonna say that just over a year and a half ago when you came up there, we would have to let you take as much time as you needed.
[Mr. Landes]: I know I wasn't watching the clock. I tried.