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Counties Look For Ways To Fund New Convention Centers

A standing-room-only crowd attended this week's Monroe County Council meeting to weigh in on the food and beverage tax.

The Indiana Office of Tourism Development says a record 79 million people visited the state last year. Several counties are hoping to cash in on Indiana’s growing tourism industry by building new convention centers.

But, the biggest challenge is coming up with the money for the multi-million dollar projects.

Monroe County Passes Food And Beverage Tax To Fund Expansion

For the past decade, Monroe County leaders have lamented the need for a larger convention center.

"We know every reason these groups are not coming here and most of the time it comes down to the dates were taken, there was no space in the convention center or we couldn’t get the adequate room block that we needed in a hotel," says Visit Bloomington Executive Director Mike McAfee. "All growing pains we have here in Bloomington."

McAfee says the county loses 40 to 50 groups a year for those reasons. But, he’s confident that will soon change.

"Our forecasts are telling us it’s going to be $15 to $20 million in expenditures in the county every year," he says of the convention center expansion.

The project is estimated to cost $72 million dollars, with a private developer footing about half of the bill to build an Embassy Suites Hotel.

"Infrastructure, fire, police, those are good things we need tax bases, tax revenues for to provide for the citizens. Expansions of hotels? Seems to me those belong in the private sector."

To pay for its portion of the project, the Monroe County Council passed a 1 percent food and beverage tax this week.

It wasn’t an easy decision — and there’s still plenty of opposition.

"Infrastructure, fire, police, those are good things we need tax bases, tax revenues for to provide for the citizens," says Monroe County resident Paul White. "Expansions of hotels? Seems to me those belong in the private sector."

Others worry the tax would make food security even harder for low-income families. And, Monroe County Republican Chair William Ellis says businesses could feel the pinch, too.

"What’s going to happen, they’re going to have the same exact amount of people going through their drive thru," Ellis says. "So, next thing, oh they’re a little short of money, so instead of getting the double, they’ll get the single. Doesn’t sound like much, but you’re going to have less of an average check or dollar amount per order."

Take a $5 latte, for example. Under the Monroe County food and beverage tax, you would pay an additional five cents for that item. If you have one latte a week for a year, that's a total of $2.60 in food and beverage taxes.

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Forrest Gilmore runs the Shalom Community Center in Bloomington, which helps those living in poverty and struggling with homelessness. He says he's tentatively in favor of the tax because of the positive impact a convention center expansion could have on the entire community.

"In terms of the people I work with on a daily basis, I don’t see 10 cents on a burger or pizza creating a substantial impact on their lives," Gilmore says.

Some question the potential profitability of the convention center, but county leaders say the point isn’t for the center itself to make all of the money. They say it will have a ripple effect on the greater Monroe County area.

"The tourism industry creates a job for about every $47,000 spent by visitors," McAfee says.

Other Counties Turn To Innkeeper's Tax To Fund Projects

Monroe County is teaming up with Indianapolis-based Sun Development on the expansion, which is working on a similar project in Plainfield in Hendricks County.

Construction is underway on a $25 million conference center. The facility won’t open until next year, but its first conference is already booked.

"We’re hosting the Indiana Tourism Association in 2019," says Executive Director of Visit Hendricks County Jamie Bohler Smith. "We have four other bids out right now for projects that will be coming in ’19, ’20 and ’21. So, these are pieces of business that we would have never been eligible to host."

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Like Monroe County's convention center, the project in Hendricks County was years in the making. The county did a study in 2003 that showed a need for more meeting space, which led leaders to increase the local innkeeper's tax to 8 percent. People who visit the county and rent rooms pay the levy.

"We developed a partnership with the county that allowed us to put back a portion of that, which is 1.5 points of the 8 percent … and we dedicated that for tourism development," Bohler Smith says. "And, that helped us start a fund that would lead us to eventually be able to incentivize the development."

Hendricks County is using a $6 million bond to support a portion of the conference center construction.  

Vigo County is also trying to figure out how to move forward with its plans for a convention center.

The county banked on an agreement with Indiana State University for a $75 million project that included a renovation of the Hulman Center arena and building an adjoining convention center.

But that partnership fell apart and the county is left to figure out how to move forward on its own.

"I think at some point we want to revisit the food and beverage tax," says Terre Haute Mayor Duke Bennett. "So, that may be something we talk about this session. We would love to put those funds directly into the [Capital Improvement Board] so we can do community projects, the first one being a convention center. But, we still need to get that part of the legislation done [at the Statehouse] so it’s available to us locally."

Regardless of how counties chose to pay for the convention centers, the process of bringing their visions to fruition is lengthy.

Monroe County will start collecting its food and beverage tax in February, and it will take much longer before bonds can be issued for construction.

And the question remains – with so many different counties jumping to build new facilities – will the capacity outgrow the demand?

Want to contact your legislators about an issue that matters to you? Find out how to contact your senators and member of Congress here.

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