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Tax Passes to Sustain Surplus Hotel Rooms

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Stephanie Brown, senior vice president and executive director of Asheville’s Convention & Visitors Bureau, followed Flora with unchallenged advocacy for the tax. She said with the sales tax, visitors to Asheville would be paying a 13-percent hotel tax, which is not outside the norm. She said visitors each year pay $60 million in sales taxes in Buncombe taxes, $18 million of which comes from hotel taxes. The collections equate to $1232 in revenue per household per year. Can you feel it? Applying multipliers, tourists drop $2.6 billion in the county’s economy annually, supporting 25,000 jobs. 75 percent of the hotel tax will go toward “free marketing” for the local tourist industry. The rest will go toward the product development fund. Historically, the largest disbursement of the latter went to the Enka Ballfields, a cause of which hardly a soul had heard for a group that still was organizing at the time of the award, last year.

Commissioner Holly Jones was concerned about the impact all these new tourists were going to have downtown. After all, Asheville leaders continue to refer to the 2010 white paper, “A Financial Crossroads,” describing the city’s predicaments forced by an exorbitant daytime population. She asked Brown if funds would be directed to absorb deleterious impacts.

To that, Brown replied “maintaining the downtown experience” had been considered. “The TDA adopted a strategic plan in the spring, and one of the priorities was to have a strategic approach to the TPDF [Tourism Product Development Fund]. So, we envisioned at that time a need to do a destination analysis of what are the important aspects of attracting visitors to the community. And we approached the city with hopes we could work collaboratively on that, so we could identify a holistic approach and a priority list of the needs, and the outcomes of that still would have to meet the criteria, but I’m really confident that would give us a very holistic, strategic approach that meets both the needs of municipal partner as well as the TDA so we can all meet our goals.”

More Q&A reinforced the notion that rules are made to be broken. It was established that the term, “major works,” in the statute was designed to funnel money toward government projects without explicitly saying so. The legislation created two tracks. One was to allow lateral entry, any time, of “major works” into the approval process, which could be expedited. Small projects per se would not get funding, but they could be grouped into a package and approved under the guise of placemaking. TPDF funding can only be used for capital improvements, but the TDA was considering selling ads or rankings on its web site to raise revenue for festivals and other soft expenses.

During public comment, hoteliers spoke in favor of the tax, while plain folks didn’t. People in the business maintained the tax was needed because the city had approved so many new, big hotels for downtown. There wasn’t enough tourism to keep them and existing hotels in business, so legislation was sought to get more money going to the TDA so it could put out more ads to attract more tourists to fill all the rooms.

Jerry Rice led off saying the county was going about things the wrong way. The people who live here and get tourist jobs get paid so little, they need county services, so all the new hotels might not net as much as the mighty pie-in-the-sky charts indicate. Michael DeBruhl Blankenship reminded the commissioners of 1929, when all members of city council were “indicted for chasing a bubble.” He said the commissioners were following suit. He asked that the matter be tabled before the county was left “holding empty air.” He, also, spoke of the disparity between wage earners and the wealthy CEOs who reap TDA disbursements. He said with the tax stats presented, the city should look like Rome in its glory or the National Mall.

Commissioner Brownie Newman was supportive of the tax increase, but he didn’t like the 25-75 distribution ratio. After he commented, Mike Fryar spoke is if things were unraveling. He said the agenda item had changed in the last fifteen minutes. He had walked in the door supportive, but now he didn’t know what was on the table. He, representing citizens in the eastern part of the county, was hearing his peers speaking as if they wanted to divert funding specially to downtown Asheville.

Jones hinted a fast-one had been pulled. She recited the definition of hospitality and said citizens had not been treated hospitably by the legislators. She said the legislation, “was an end run around local officials who worked hard to represent the citizens, but also worked hard to promote a hospitality industry.” She said there were a lot of bad feelings in the community and trust had been damaged. She wanted to buy time to negotiate.

Ellen Frost said anybody who thought they could negotiate a better deal was deceiving themselves. The local delegation had failed to work for the commissioners this time as always. She cited the water agreement and district elections. However, she believed the commissioners could work with the TDA. “They’re people from Buncombe County,” she said. Knife figuratively inserted, she twisted, “They’re not aliens.”

Commissioner Joe Belcher and Chair David Gantt were all-in. Belcher spoke of Greenville “figuring a way to get [the tax burden] off the backs of the property owners.” He said, “The property taxes in Buncombe are absolutely too high, and we need to be able to take bold steps to fix that.” He argued taxes collected by the TDA could be used to displace general fund spending on lights for a ball field, for example. Gantt commended his predecessors for coming up with the “brilliant” idea of taxing people who don’t live in the county. A lawyer by profession, he is never dissuaded from staying in a hotel by room taxes, not even in New York City, where he said it feels like the occupancy tax is probably 30 percent.

Miranda DeBruhl was not impressed. “There are a lot of influential people who want to see this thing get passed tonight. The bait is in the water, but I’m not biting.” Despite all the distortions, the room tax was still a tax. Since there was no budget amendment to decrease property taxes associated with the room tax, the tax represented transferring a greater share of the economy from the productive, private sector to government. And it was not kind to make others pay. ”What is in writing,” she said, “is a tax increase on our friends and family who come to visit us, and that’s upwards of $5 million. I don’t want to have any part of it.”

When it came time to vote, some commissioners tried to game the system to kill the existing version of the tax increase without destroying the possibility of getting the distribution ratio they wanted to rise from the ashes. The commissioners had to go into closed session to discuss how they might bring a negotiated revision back. When they emerged, they voted 4-3 in favor of the increase. DeBruhl, Jones, and Newman were opposed.

In Other Matters –

The commissioners were also asked to approve a Blue Ridge Parkway Overlay District. It would modify existing rules to require all structures, including single-family residences, to be buffered. Furthermore, buffers would have to have two canopies. The National Park Service, in addition, asked that it be notified whenever new development is proposed in the area so it may provide input. Other rules require a 50-ft setback for main structures and a 30-ft setback for accessory structures. No building taller than 40 feet would be allowed within 1000 feet of the parkway.

In part, the code would require that, “The surfaces of the structure which are visible and oriented to the Blue Ridge Parkway must be screened by one overstory species for each 15 linear feet and one understory species for each 10 linear feet of the structure. See Sec. 78-584 (c) for allowed overstory and understory species and required size and planting. No single species shall comprise more than 50 percent of the overstory or understory species planted. Overstory species shall be planted no less than 20 feet apart and no more than 40 feet apart. Understory species shall be planted no less than ten (10) feet apart and no mrore than 25 feet apart. Overstory and understory species shall not be planted in a row, shall not be evenly spaced, and shall be positioned no more than 100 feet from the structure to be screened.”

The Republicans on the board spoke about property rights. Fryar complained against those backing the overlay district telling people what to do and wanting to change too many things. He thought the parkway was great as-is; even old falling-down barns had historical significance. Fryar said he spoke to Jack Cecil at Biltmore Farms, who told him the ordinance would cost his company a quarter-million dollars in terms of lost use of property.

Belcher and DeBruhl had both heard that the existing setbacks were considered “model,” and that parkway leadership was satisfied with them. Belcher said he advocated property rights, and the measure constituted overreach, so he wasn’t going to be supportive. That said, several details were ill-considered. For example, Belcher had never bought a 15’ tree. He had bought 8’ trees, and they were ghastly expensive. He said putting up the trees might give parkway driveby’s a nice instant of green while, on the other side, every day blocking mountain vistas that had been part of family heritages for generations. The parkway was for driving; the pulloffs were for sightseeing. What’s more, the way he read the document, trees were to be aligned to satisfy views perpendicular to the parkway. Drivers typically don’t keep their head turned sideways while negotiating curvy mountain roads. The commissioners approved the new overlay district on a 4-3 vote, Belcher, Fryar, and DeBruhl opposed.

The commissioners voted the same way on a resolution opposing a proposed change to the way sales taxes are distributed. Changing from a point-of-sale to per-capita formula would cost Buncombe an estimated $2.9 million next year. The Democrats opposed the measure, but the Republicans said it was already dead, so there was no point in ruffling feathers.

The commissioners were able to all agree on something. Chapter 124 of the Vietnam Veterans has been raising funds to get the traveling Vietnam Wall to stop in Buncombe County. A vet named Spider said 149 names on the wall belong to Buncombe residents. He told how many vets were handicapped, having been exposed to Agent Orange or otherwise suffering physically from war. They couldn’t travel to Washington, DC. Other vets had such a terrible experiences, they refuse to talk about the war. Their children, however, have questions that deserve answers. The total cost for bringing the wall to town was $25,000, and the vets had raised $12,000 to date. The ask was $6000 from Buncombe County as a match for $1000 from each of the county’s municipalities. The wall will now visit Buncombe County from September 8-11, with ceremonies each day, and school kids from surrounding counties will be able to take field trips to see it.

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