From the Bloomington Herald-Times:
This guest column was submitted by Martha Moore, president, Downtown Bloomington Inc. and owner of Pictura Gallery on the Courthouse Square.
As president of Downtown Bloomington Inc. and as the owner of a downtown retail store, I want to voice my support for the expansion of the convention center and the food and beverage tax for funding it.
I would like to begin by highlighting the organized and thorough job that Talisha Coppock and her team have done to plan the expansion. It is my belief that once the food and beverage tax is in place, the expansion will go smoothly and be an extraordinary benefit to both downtown and the entire county.
Why will it be a benefit? For downtown businesses, “people traffic” is key to financial success.
Weekends are already high “people traffic” times, but weekdays can be slow. An expanded convention center within walking distance of our lovely downtown will enable us to host the larger convention groups that currently want to come to Bloomington, but do not fit in our present convention center. Many of these groups host their conventions during the work week.
Creating an expanded center that can accommodate larger groups is only a win/win — more “people traffic,” more revenue. And since restaurants will be a huge beneficiary of this situation, the food and beverage tax makes good common sense as an efficient tool to help achieve this goal.
It is important to note that the innkeeper’s tax is also supporting this project and other funding options are property-taxed base, and therefore do not include revenue from visitors. Already, Downtown Bloomington Inc. offers convention participants gift certificates that can be used throughout the downtown. The positive response to this collaboration has been astonishing.
It is important to note that many cities have chosen to build their convention centers outside or at the far edge of their shopping, dining districts. This makes the Monroe County Convention Center a unique, positive standout. Not many communities provide convention attendees such an attractive space that is within walking distance to such a variety of establishments.
The county benefits as well by the new jobs created and expanded services needed to efficiently manage an expanded convention center. Tourism will also rise as attendees choose to return to Bloomington or remain in the area after their positive convention experiences.
I strongly urge you to support this exciting expansion and its funding. The economic benefits of this well-planned project will be a great boost to Bloomington and Monroe County.
http://www.heraldtimesonline.com/stories/2013/06/19/digitalcity.positives-from-expansion-far-outweigh-negatives-from-1-percent-dining-tax.sto
This guest column was submitted by Charles Trzcinka, James and Virginia Cozad Professor of Finance at the Indiana University Kelley School of Business.
The 2009 law allowing a county council to implement a 1 percent tax on sales in restaurants and bars is a temptation that county councils find hard to resist. I am surprised it took Monroe’s County council four years to respond, but we now have the proposal to charge the tax and use the money to expand the Bloomington convention center.
The claimed benefits are $15 million added to economic activity and 200 new jobs. The convention center can now host a conference of 250 people and averages 60,000 per year. Proponents believe they could double the number of conventioneers if they spent about $30 million on a new convention center. They compute a total benefit for Monroe county of $328.6 million (figure 1-11 in the HVS Market study on the website www.investmonroecounty.com).
This looks like a great deal, but like all investments, the risk is that they will build a new center and not get the increased business. What nobody explains in the market study, on the website promoting this or in the press, is why a convention center needs to be a government investment in the first place.
In many cities, the convention business is entirely handled by private development. Taking a step back, in our economy, tax dollars are best devoted to those services that the private sector will not provide or will provide poorly. Examples are police, fire and, here in Bloomington, the B-Line Trail.
No private company would have ever built the B-Line because the property rights can’t be defined. How would you charge people for it? Yet the B-Line is a nice municipal investment because it brings us together and it encourages private investment along the path.
The convention center on the other hand, is already a mixed private-public investment with a privately funded hotel. The center itself is run by the nonprofit Convention Center Management Company and is owned by Monroe County. Monroe County acquired the building in 1991, and there have been plans to expand it for about 10 years. The current plan is to expand the center with taxpayer dollars and the hotel with private money.
Nobody has yet described what it is about the center that needs government to run it. Unlike the B-Line, it is easy to charge for the center’s services. The center’s property rights are well defined. Alternatively, the county could sell the current building to the hotel, which would run it on its own. There would be no need for county employees to be involved, no risk to the taxpayers. If the convention center demand is too low, the hotel will bear the risk.
This would avoid the tax, which is unfair to those who don’t live in Bloomington, and provide money for other projects that the county should be operating, projects in the “commons,” not in the private sector.
http://www.heraldtimesonline.com/stories/2013/06/19/digitalcity.government-doesnt-need-to-take-risk-on-convention-center-private-interests-can.sto
