Title
Potential Use of County Tourism Development Tax Funds for Projects in the Cities of Newberry and Alachua (B)
It was requested that File # 110331 be separated into 2 items. The text and back-up are the same for both items.
Explanation
The City Manager received an e-mail on September 12, 2011 from the Alachua County Manager indicating that the County Commission will be holding a special meeting on September 20, 2011 to discuss the potential use of Tourism Development Tax funds for projects in the Cities of Newberry and Alachua and potential 2012 referendum for optional sales tax(es) for road capital infrastructure and/or transit sales tax alternatives.
It is City staff's understanding that the City of Newberry is advocating that the County Commission consider a possible relocation of the County Fairgrounds to the City of Newberry along with tourism development tax funding allocated to development of the new fairgrounds on property acquired by the County off Waldo Road north of the current fairgrounds.
Other than the e-mail received from the County Manager, City staff has received no communication that a potential relocation of the County Fairgrounds was being considered or that the County was considering new projects for tourism development tax funding. The standard process has been for the County to solicit proposals for use of tourism development tax funds when funding/capacity is available. Proposals are then evaluated by the Tourism Development Council with recommendations to the County Commission.
The last time the County solicited proposals for use of tourism development tax funding was in 2010. The City Commission forwarded three projects to the County for consideration including: 1) a Downtown Conference Center and Hotel, 2) Expansion of the Martin Luther King Jr. Sports Complex and 3) the Cade Museum. The only project approved for funding was the Cade Museum although it appears the funding amount has not been finalized. The County Commission discussed funding approximately $600,000.
A majority of the tourism development tax revenue is generated in the City of Gainesville.
The County Commission is also scheduled to discuss potential 2012 referendum for optional sales tax(es) for road capital infrastructure and/or transit sales tax alternatives.
Fiscal Note
A relocation of the new Alachua County Fairgrounds to the City of Newberry would negatively impact the City of Gainesville and particularly East Gainesville due to reduced economic activity. In terms of tourism development tax revenue, each 1% of the tourism development tax generates approximately $650,000 annually. It is likely that this revenue would shift to the City of Newberry if the new fairgrounds is relocated there. When added to the tourism development tax funding committed to the Nations Ballpark project, the City of Newberry would then be receiving almost all of the additional 2% tourism development tax approved by the County Commission in 2010. Alachua County currently levies a 5% tourism development tax with the majority of the tourism development tax generated in the City of Gainesville.
Recommendation
The City Commission discuss the topics on the agenda of the September 20, 2011 special meeting of the County Commission and direct staff as appropriate.