Staff directed to work on options for paying back loan out of ‘bed tax’ revenue
Exactly how they will provide the money remains uncertain at this point. Nonetheless, on Jan. 15, the Sarasota County commissioners unanimously committed to $20 million in funds for Mote Marine Laboratory’s Science Education Aquarium at Nathan Benderson Park, near Interstate 75.
The motion that Chair Michael Moran made — after passing the gavel to Vice Chair Alan Maio —called for staff to draft a letter to Mote leaders with the monetary commitment. The motion further directed staff to present to the county’s Tourist Development Council (TDC) funding options involving the Tourist Development Tax — or “bed tax” — revenue to cover the $20 million.
Kim Radtke, director of the county’s Office of Financial Management, showed the commission scenarios this week that entailed decreasing funding in the Tourist Development Tax (TDT) revenue allocation that has been dedicated to the promotional budget for Visit Sarasota County.
Commissioners said they would not support using General Fund revenue for the project. Staff traditionally has called the General Fund the county’s most constrained “pot” of money. Made up largely of property tax revenue, it pays for operations of many of the county’s constitutional officers — such as the sheriff and the supervisor of elections — and a number of county departments.
One commissioner on Jan. 15 — Nancy Detert — questioned why the board that day had to commit to a specific amount of money for Mote. She said she wanted to see more options, as well as the figure representing the value of the approximately 11.45 county acres at Benderson Park, which the commission agreed on Jan. 30, 2019 to lease to Mote and potentially sell to Mote.
Detert voiced concern about the potential for another economic downturn. “We’re coming to the end of a 10-year period [of economic growth],” she emphasized. “You forget to look in the rear view mirror and remember what it was like during the painful periods.”
Yet, she told her colleagues, “I certainly don’t want to be in the position of having to vote against a fantastic project.”
Commissioner Christian Ziegler pointed to the fact that the Florida Legislature opened its 2020 session this week. “I want to show that we’re fully committed to this project,” he added, especially as Sarasota County’s representatives in the Legislature might be able to use that board support as leverage for winning state funding for the Mote project.
During the discussion, Commissioner Alan Maio did win assurances from Radtke of the Office of Financial Management that if the board eventually approved the borrow of funds over 30 years to cover the $20-million commitment, the $1.1-million annual debt service payments would not begin until the 2022 fiscal year, which would begin on Oct. 1, 2021. He also noted figures Radtke had shown the commissioners, indicating that the TDT revenue could grow at a higher rate than staff was predicting in coming years.
The TDT is a 5% tax charged on rentals of accommodations in the county for six months or less time. The revenue is divvied up — under the guidelines of the Florida Statutes — to pay for a wide variety of tourism-related initiatives in the county. Among them are beach maintenance, funding for the Spring Training facilities the county owns that are used by the Baltimore Orioles and the Atlanta Braves, and marketing of county attractions to draw visitors.
Radtke also explained that when the county reaches the point when it receives $30 million in annual TDT revenue, state law would allow the board to raise the tax to 6%.
Even with the red tide bloom that plagued the county’s shoreline in the latter part of 2018, the TDT revenue hit a new record for the 2018 fiscal year, which ended on Sept. 30, 2018. That amount was $22,774,671.18, the Sarasota County Tax Collector’s Office reported. The revenue total achieved another record for the 2019 fiscal year — $23,331,462.77, the Tax Collector’s Office reported in November 2019.
In offering his Jan. 15 motion, Chair Moran referenced comments his colleagues had made about the potential for the new Mote Aquarium to draw even more tourists to Sarasota County. However, he also stressed, “There is a hugecapacity for career attraction to the community,” as Mote plans to expand its research facilities on City Island after completing the new aquarium at Benderson Park.
Additionally, during the Open to the Public period of the board’s Jan. 15 morning session, former County Commissioner Paul Caragiulo of Sarasota reported that the Greater Sarasota Chamber of Commerce, of which he is chair, offers its full support to Mote’s aquarium project.
On Nov. 21, 2019, he said, the Chamber board voted on the issue.
Caragiulo then alluded to Sarasota City Commission votes over the past year that halted Selby Gardens’ efforts to move forward with its master plan and denied the Sarasota Orchestra’s request to build a new venue in downtown’s Payne Park.
“There was an idea that, perhaps, there were some portions of the community that didn’t feel [cultural and scientific institutions] were that important,” Caragiulo continued.
The action the Sarasota Chamber took in November 2019, Caragiulo said, “was really rooted in that one idea, that these cultural gems, institutional gems that we have, really create the fabric that makes this community …”
County Commissioner Charles Hines later referenced the same points as he and his county colleagues discussed funding for the Mote project. Hines noted “other entities not supporting our iconic, unique nonprofits that exist that make Sarasota County unique.”
He added, “Mote is absolutely one of those. They’re at the top, along with [the] Ringling [Museum], Selby, the Orchestra and so forth.”
A two-year process
A Jan. 15 county staff memo reminded the commissioners that in March and May 2018, the county received letters from Michael Crosby, the president and CEO of Mote, “requesting that the County and Mote staff begin discussions regarding a parcel of county land where Mote proposed locating a Science Education Aquarium.”
In his May 17, 2018 letter, Crosby made a formal request to County Administrator Jonathan Lewis for a “Sarasota County financial commitment” of $20 million. Crosby noted the anticipated expense of the new facility was $130 million.
During her Jan. 15 presentation, Radtke of the Office of Financial Management showed the commissioners a slide projecting total TDT revenue from the current fiscal year through FY2024, based on annual growth of 3% and annual growth of 5%. That slide put the FY2024 figures at $27.6 million and $29.8 million, respectively.
If the county borrowed $21 million for 30 years, she continued, the interest rate would be 3.44%, with an annual debt service payment of $1.1 million.
The funds used to pay back the loan could come out of TDT revenue or the General Fund, Radtke explained.
“I do not want to use the General Fund, period,” Commissioner Hines told her.
Commissioner Detert concurred.
However, Hines asked, what would happen if the board agreed to use the TDT money and unforeseen circumstances dramatically lowered the amount of TDT revenue over a period of time?
Typically, Deputy County Administrator and Chief Financial Management Officer Steve Botelho replied, the county would pledge sales tax revenue to pay back a loan because the interest rate on a loan backed by TDT revenue would be much higher.
Then Radtke showed the commissioners a slide indicating that the Promotion account to which TDT revenue is allocated could be lowered to a range between 20% and 25% of the total amount of “bed tax” money each year, instead of the current range of 25% to 30%.
Yet, Hines referred to comments Virginia Haley, president of Visit Sarasota County, made to the board during a presentation earlier in the day. “We keep nipping away at the advertising budget to allocate [funds to other tourism-related needs],” he pointed out.
In October 2018, the commission approved a reduction in the Promotion funds for Visit Sarasota County — the county’s tourism agency — to cover the costs divvied up over several years for repairs at Ed Smith Stadium. That was a necessity, staff explained at the time, under terms of the agreement between the county and the Baltimore Orioles, which conduct Spring Training at the Sarasota facility.
When a county or a state reduces its budget for promoting itself to tourists, Haley told the commissioners on Jan. 15, “Your competition has an opening.”
Commissioner Christian Ziegler then asked Haley, “Wouldn’t you say that Florida basically sells itself?”
“Absolutely not. Absolutely not,” Haley replied. “Consumers have so many choices now,” she added. Often, when people think of Florida, she continued, they think, “Been there, done that … ‘Oh, Florida is where we went when we were 5 years old to see Granny.’”
Haley stressed, “We need to make sure people know the vitality of Florida … and [that] the state is more than Mickey Mouse.”
“Is this project so unique and so special to this community,” Hines said of the aquarium, that it would be worth taking more money from the Promotion budget? “I’d argue that it is.”
Moreover, Hines said, the aquarium would not be just a Sarasota County attraction. He expected Manatee, Charlotte and DeSoto counties also would let visitors know about it, he continued.
“I think that this is an incredibly valuable project for our local area,” Ziegler said. “I think this’ll pull people regionally.”
Further, Ziegler pointed out, the aquarium will be “field-trip friendly” for students from the surrounding area, and it will be a draw for families. “I’m all about that.”