August 4—Owensboro city commissioners said Wednesday they support creating a transient hotel tax as a way to finance the construction of an indoor sports complex.
The sportsplex, commissioners said, would benefit the city through hotel room rentals, restaurant sales and other business generated by people participating in large sports tournaments. The hotel tax, commissioners said, would mostly be paid by people visiting the city who are using city services.
The commission held first reading Tuesday of an ordinance to create a 4% hotel tax that would also apply to room rentals like airbnb. Three percent of the tax would go towards the sportsplex, while 1% would be used to fund the Owensboro Convention Center.
How the construction of the sportsplex will be funded has not been determined, but officials Tuesday said a possibility is 20-year bonds that could be used for both the sportsplex and the proposed downtown transient boat dock commissioners approved on a split vote Tuesday night.
While a design has not been presented, a consultant previously said an 88,000-square-foot sportsplex with courts for basketball, volleyball and an indoor soccer field would cost $16 million to $17 million.
The city’s tax would be on top of the county’s 6% hotel tax. When asked if the high tax rate could discourage hotel visits, Commissioner Jeff Sanford said the change is “a few percentage points” and that other cities have hotel taxes.
“Any time I go out of town and stay somewhere, I’m paying it for other cities,” he said. “We have all this beautiful infrastructure and people (from out of town) use it and don’t pay for it.”
A hotel tax is “a way of recouping some of our investment” in city amenities, Sanford said. Visitors “are coming to have a good time. They are not going to worry about $6 or $7” in additional room taxes.
Sanford said a sportsplex would bring in sports tourism, and city residents, particularly children and teenagers, would benefit because the facility will be available for use by leagues and teams during the week.
Mayor Tom Watson said City Manager Nate Pagan spoke with local hotel owners and the Convention and Visitors Bureau about the tax plan, “and we didn’t get any pushback.”
Watson said the city does provide services to visitors who stay in hotels.
“We do police and fire and public works for hotels,” Watson said. “I think it’s a long time coming and worth looking at.”
Of the sportsplex itself, Watson said, “I think it’s an amenity the fourth largest city should have.”
Having a sportsplex will keep Owensboro competitive with other cities and will benefit local teams “so our teams or surrounding teams don’t have to travel” for tournaments, he said.
After the tax has accomplished its purpose of helping fund the sports complex, it could be rescinded by a future commission, Watson said.
“Nothing is set in stone in public and local government,” he said.
Commissioner Mark Castlen said the sports complex will benefit the city.
“I think it’s going to be something that fills hotels and restaurants and brings a lot of tourism,” Castlen said. “Our stores will have more people shopping in them.
“When my wife and I go out of town, one of the things we do is visit the unique shopping areas. I think (the sportsplex) will bring a lot of foot traffic to the downtown area, and the economic benefits are going to outweigh the costs.”
The consultant previously told commissioners a sportsplex that was filled with tournaments on half of its available weekends would bring in $1.3 million in hotel room rentals and $3.1 million in other sales.
Mayor Pro Tem Larry Maglinger said of the tax proposal, “it seems to be the hotels are OK with it, and it will be another revenue stream for the city.
“When you look at Nashville or Louisville, (their hotel tax) is every bit as high, or higher.”
The city will benefit from sports tourism, Maglinger said.
Commissioner Bob Glenn said of the hotel tax, “I don’t think (people staying in local hotels) are ever going to notice. I have been in cities where it has been as high as 12 to 15%.”
With a complex for indoor sports tournaments, “the entire community gets a boost,” he said. “When my son and daughter played sports, they went to several tournaments, and it’s amazing the number of businesses you hit.”
The sportsplex would allow for the city to host tournaments all year long, Glenn said.
“It opens up a whole realm of tourism dollars we haven’t had access to,” he said. “It should help lots of businesses.”
James Mayse, 270-691-7303, email@example.com, Twitter: @JamesMayse