County: No 1 percent hotel tax could negate county/city contract
By Steve Herring
Published in News on July 23, 2015 1:46 PM
The agreement between the city of Goldsboro and Wayne County to build the city's sports complex and the county's agricultural and convention center hinges on legislation implementing a new countywide 1 percent hotel occupancy tax.
The contract is null and void should that legislation fail, County Manager George Wood said Wednesday.
It was that possibility more so than the potential for lost revenues that drove commissioners on Tuesday to say in a resolution that neither facility will be built if the General Assembly fails to adopt the tax, he said.
Along with implementing the local tax, the bill also would create a county Tourism Development Authority that would authorize use of revenue from the 1 percent tax to promote travel and tourism in the county.
Revenue from the 1 percent tax could not be used for construction of either project, but instead must be used for marketing travel and tourism in the county.
The money for the agriculture and convention center is a separate issue to be hammered out between the city and county from revenues from the city's existing 5 percent occupancy tax.
The resolution was sent to state Sens. Louis Pate of Mount Olive and Don Davis of Snow Hill imploring them to move the tax bill through the Senate before its committees shut down for the year.
Time is of the essence, Commissioner Joe Daughtery said during the board's Tuesday session. Daughtery said it was his understanding that Senate committees would cease operation today.
Wood said he had not heard from either senator as of Wednesday afternoon. Neither Pate, Senate deputy president pro-tempore, nor Davis could not be reached for comment prior to press time this morning.
However, according to the General Assembly website the bill passed its first reading in the Senate on Wednesday and was referred to the State and Local Government Committee. Both Pate and Davis are committee members.
If the committee report is favorable, it will be sent to the Finance Committee.
"What we meant by that (resolution) is the current agreement says the agreement does not go forward, that it is null and void if we don't get the 1 percent hotel/motel tax," Wood said. "So unless we came back to the table on it (contract), it would be null and void.
"We could review everything and still come back to it (agreement). Now if it (tax) passes, our intent is to sit down and revise our agreement to talk about the split of the current 5 percent Goldsboro has."
What would happen is that 2 percent of that existing tax would go to the county for the agricultural and convention center, Wood said.
Another 2 percent would go to the city for its projects.
"One percent would go for marketing," he said. "Then if you add the (new) 1 percent, which (state Rep.) John Bell is absolutely correct on -- the additional 1 percent is strictly for marketing.
"That gives you the second 1 percent for marketing because the whole idea was one-third (city), one-third (county), one-third (marketing). After 20 years ours goes down a bit after it is paid for."
Wood said he did not know the answer as to what would happen if the tax is not approved, but that he believes it will be worked out.
The tax is the basis for the agreement in which the city would give the county 12 acres of land on North Wayne Memorial Drive on which to build the center.
In exchange for the county increasing the size of the assembly area, the city agreed to ask for the occupancy tax increase and to provide 33 percent of the additional revenues for the first 20 years for the center and 25 percent thereafter.
That money would be used by the county to help fund the center and its operations.
The county would also loan Goldsboro $3 million at 1.5 percent interest over 15 years for the sports complex.
As initially introduced by Bell the bill would have increased Goldsboro's hotel occupancy tax from 5 to 6 percent as part of the city-county deal.
But that ran into opposition and the decision was made to switch to a county-wide tax, Wood said.
"So if we had changed Goldsboro's (tax) we would not have had the flexibility that we just went over," Wood said. "That is when we said, 'We need to change this to a county hotel tax and leave Goldsboro's like it is because it has the flexibility in there that up to 80 percent can be used for actual construction and operation of convention centers.
"So that would allow us to do the split that I was just talking about."
Along with passing the resolution, commissioners Tuesday also agreed to a joint contract with the Wayne County Development Alliance to hire a professional fundraiser.
Convergent Nonprofit Solutions, will conduct two fundraising campaigns -- one for Impact Wayne and the other for the Wayne Regional Agricultural and Convention Center.
The county's share of the contract will be $112,500, and one-half of the reimbursable expenses.
The goal is to raise between $1.9 million and $2.4 million, including $900,000 to $1.2 million for the center and $1 million to $1.2 million for the Alliance's economic development activities.
"I have never run a campaign this extensive," Daughtery said during the board's Tuesday session. "I don't think any of us have. Before anyone turns around and says we are spending $120,000 to get this assistance do recognize that these guys are professionals. They know how to do a campaign.
"We do want public input and contribution toward the construction of this center. In my opinion, I feel like they have underestimated the support and the dollar amount that we are able to raise. I really believe that we will be closer to the $2 million level of public support and fundraising."
Daughtery said the fundraiser is important because everyone needs to come together as a county and support the effort.
"This is something that is going to be a great benefit for economic development, for quality of life here in Wayne County," he said.
It is an extensive and well thought out campaign, he said.
Commissioner Bill Pate, chairman of the commission's Agriculture Advisory Committee, agreed that the company had underestimated the total.
"The support is overwhelming," he said.
Wood said that naming rights would help increase the amount of funds raised.