While many cities have an agenda – at least on paper – to use economic development tools to lure more dollars into their economy, they are often unwilling to do so at the expense of already-burned taxpayers.
Projects such as sports facilities often attract broad support from the public…as long as the funds come from outside the city. For this reason, economic development groups are becoming more creative in finding ways to finance projects inside the city limits with revenue that originates from outside the city limits.
Appleton, Wisconsin is one of these municipalities. The city is hoping to build both a new exhibition center that will cost about $29 million as well as new facilities for indoor sports. In order the raise the money, Appleton’s city council recently voted to raise the hotel room tax from its current six percent to 10 percent. At the special common council meeting last month, Appleton council members voted 13 to one to join fortunes with nearby regions -- Grand Chute, City of Menasha, Town of Menasha, Sherwood, Little Chute, City of Neenah, Town of Neenah, Kimberly and Kaukauna – with a goal of financing projects that will attract more business visitors and sports tourists to the region. The nine other partner municipalities are also in the process of raising their hotel room tax rates to 10 percent.
According to the local Fox News affiliate Fox 11, the 10 percent hotel room tax will be distributed as follows: three percent will go to the Fox Cities Convention and Visitors Bureau, two percent will go to pay bonds on the Fox Cities Performing Arts Center, three percent will go to fund bonds to pay for the construction of the Fox Cities Exhibition Center, one percent will go to the individual municipalities, and one percent will go to the Fox Cities Convention and Visitors Bureau Tourism Development Fund, specifically for sports tourism. Once the bonds for the Fox Cities Performing Arts Center are paid off in 2017, that money will then be funneled into the sports tourism development fund.
"This is a first step, a first step of many, but it's very positive. It's a strong statement by our city council and that's what we were looking for," said Appleton Mayor Tim Hanna.
The director of the Fox Cities Convention and Visitors Bureau, Pam Seidl, told Fox 11 that raising the room tax is a good move, one supported by area hotel owners and managers.
“We have the hotels coming together for a reason and a shared vision that advances something for everyone,” said Seidl. “These two projects are very synergistic when you look at them from a tourism industry model. Expo center drives business during the week, sports facilities drive business on the weekends.”
Appleton has previously indicated that when it comes to sports tourism, it’s dollars generated by youth sports that primarily interests the city. In 2014, area parents of youth athletes spent nearly $6 million on hotels, food and shopping in the Fox Cities when their kids traveled to participate in tournaments. Maureen Wallenfang, writing earlier this year for the local Post-Crescent Media, said 2015’s totals are likely to be even higher. Earlier this year, Appleton hosted the U.S. Youth Region II Soccer Championship, which drew attendees from 13 states and generated $3.9 million in visitor spending.
With some of the new revenue that will be raised from the hotel tax, Appleton economic development officials are hoping to build facilities that will encourage more indoor sporting activities during the winter months, such as indoor basketball and volleyball as well as skating and ice hockey.