Experience GR set to receive larger paycheck
Revenue to hotel-motel tax is up and county is ready to allocate more money.
(As seen on WZZM TV 13) The destination marketer for tourism and convention business here is all but certain to get a bigger-than-expected payout for its work this year when Kent County commissioners meet on Thursday.
Following the approval given by the county’s Finance Committee last week, commissioners are likely to appropriate another $160,406 from Kent’s 2012 Lodging Excise Tax Fund and award those dollars to Experience Grand Rapids.
“This is kind of like a bonus, right?” said Commissioner Jim Talen, a member of the Finance Committee.
Experience GR likely will receive the additional revenue because income to the county’s 5 percent hotel-motel tax fund this year is topping projections. Tax revenue was expected to be roughly $5.9 million and Experience GR’s 14.5 percent share was estimated to be $854,594.
However, tax revenue to the account looks like it will be from $6.6 million to $7 million, which would push the marketer’s cut to as much as $1 million for the year. So the county needs to set aside more revenue from the fund for that payout. Hotel occupancy rates and room charges have risen the past few years, which is why tax revenue has increased. A 5 percent tax is added to each guest’s bill.
“This is the second year in a row that we’ve seen tax revenue increase,” said Daryl Delabbio, county administrator and controller.
The county has supported Experience GR, and before that the Convention and Visitors Bureau, with funds from the tax account for years. Experience GR and the county entered into a new three-year agreement recently, which gives the organization a bigger piece of the revenue pie and allows it to collect 16.75 percent of the taxes that go into the fund starting next month.
Commissioners also are expected to accept an in-kind contribution of $74,000 this week from property owners who qualified for the county’s Purchase of Development Rights program in February. Back then the board agreed to buy the development rights of 300 acres on four farms for $468,000.
The funds to purchase those acres have been secured through federal, county and township dollars and private foundation grants. But the county needs to accept the non-monetary contribution from the property owners to fully cover the cost of the transaction and let the closings move forward.
“In this case, the landowner is accepting less (cash) than what the county is offering,” said Mary Swanson, assistant county administrator.
Swanson explained that a property owner takes fewer dollars for a purchase and then gives the amount that was declined to the county as a legal contribution. The amount of that donation qualifies as a tax deduction, as long as the county accepts the contribution.
“The burden is on the landowners. We don’t take the money in. We record the asset on our books as the true value,” said Swanson. “We are an eligible entity for donations.”
Commissioner Tom Antor said this type of transaction lets the county preserve more farmland for fewer dollars, something he pointed out that officials in Lancaster County, Pa., have done for decades. “Actually, it’s a good way to do business. The cost of the program goes down, while the benefits go up,” he said.
“There are eight other landowners who have contributed in this way to the PDR program. This is a relatively common occurrence to the county,” said Swanson.
Commissioners will deal with an uncommon occurrence this week, in that the county has received $40,000 from the state through the Competitive Grant Assistance Program, once known as the Economic Vitality Incentive Grant Program, and commissioners have to accept the funds to make it official — an action they most surely will take.
The county received the state grant because it approached the cities of Grand Rapids and Wyoming about reviewing common activities of their Community Development offices to determine whether there is room for collaboration or possibly even consolidation of the three departments. The reason behind the move is to decide whether there are ways to improve the delivery of services while reducing operating expenses.
The county and two cities have the only community development offices in the county, and all receive federal grants for the same purposes, but each represents a distinct area. The county and the two cities would each invest up to $20,000 in the effort. When the state grant is added, the three would have $100,000 to proceed with the process.
“We’re only addressing the community development portion at this time and not the housing portion,” said Delabbio. “Each local unit has an entitlement, and those entitlements will not change.”
Grand Rapids city commissioners and the Wyoming city council decided to become involved last week by agreeing to a memo of understanding with the county.
“I think there is a strong will to accomplish this, but we don’t know what it will look like,” said GR City Manager Greg Sundstrom. He added the effort could end up creating a separate authority that would govern the activities.
“We don’t know the exact cost of this. It won’t be more than $20,000, but it could be less,” he said.
“There is duplication in the departments,” said GR City Commissioner Rosalynn Bliss. “So this is picking the low-hanging fruit.”
The county has received notification from the Michigan Department of Treasury that the state intends to award the grant to the county once the paperwork is completed.