Tourist Development Tax ordinance change approved to divert tourism promotional funds to repairs at Ed Smith Stadium during two fiscal years

Representatives of county’s tourism office and business owners plead with commissioners not to take away funds needed to combat red tide publicity

A graphic shows the additional revenue expected to be needed from the promotional account in the 2020 and 2022 fiscal years to make repairs at Ed Smith Stadium. Image courtesy Sarasota County

With a unanimous vote this week, the Sarasota County Commission approved a modification of the ordinance governing the county’s Tourist Development Tax (TDT) revenue allocations to cover necessary repairs to Ed Smith Stadium in the 2020 and 2022 fiscal years.

The change will reduce the percentage of funding traditionally set aside for Visit Sarasota County — the county’s tourism agency — to use in promotional campaigns to draw people to the community during those two fiscal years.

Before the vote, Chair Nancy Detert asked Kim Radtke, director of the county’s Office of Financial Management, to clarify that an agreement the county forged with the Baltimore Orioles, to bring the team to Sarasota County for Spring Training, requires the county to keep the stadium up to Major League Baseball standards.

“It’s our property,” Radtke replied. “It’s our maintenance responsibility.”

County Administrator Jonathan Lewis reiterated that in response to a question from Commissioner Michael Moran: The stadium repairs are “a contractual obligation” of the county.

“You don’t want your county beginning to breach contractual obligations for major repairs,” Commissioner Alan Maio told the audience in the Commission Chambers in downtown Sarasota on Oct. 23. “This isn’t more lighting or more fancy flags along the rim [of the stadium],” he added. “Part of the building is sinking.”

Moran also sought a clarification from staff that the extra funding for the stadium is projected to be necessary for just two of the next 10 years.

“Correct,” Lewis responded.

A chart in the conditions assessments of Ed Smith Stadium and the Buck O’Neil Complex, completed in July for the Sarasota County Parks, Recreation and Natural Resources Department, shows some of the repairs needed at the stadium. Image courtesy Sarasota County

Finally, Moran asked whether anything in the county’s TDT ordinance obligates the county to give Visit Sarasota County all the promotional revenue set aside from the 5% Tourist Development Tax — or, “bed tax.”

Lewis replied that he had not looked at the ordinance that closely, but, “Yes, that is my understanding of it.”

Moran stressed he was not suggesting promotional funds go to another entity, only that it is up to the County Commission to decide how to use the TDT revenue within the parameters established by state law. He added that the board could choose, for example, to give some of the promotional money to an organization representing restaurants.

The Oct. 23 commission vote followed more than an hour’s worth of public comments. All but two of the 11 speakers urged the commission not to amend the TDT ordinance as staff had recommended.

Most of the speakers focused on the impact of negative national publicity related to the red tide bloom that has been offshore since October 2017. Beginning in early August, TV and newspaper reports included details of the deaths of mammals such as dolphins and sea turtles, and featured film and photos showing tons of dead fish piled on county beaches. As a result, owners and managers of businesses that rely on tourism have talked of their financial struggles, as people have cancelled plans to visit the community.

During the Oct. 23 public hearing, Paul Parr, who owns rental accommodations on Siesta Key, across from Siesta Public Beach, choked back tears several times during his approximately 5 minutes at the podium.

“My situation is desperate,” Parr told the commissioners. “I’m going to lose my investment …”

A night game is underway at Ed Smith Stadium on Feb. 24. Photo courtesy of the Baltimore Orioles

Before red tide made the national news, he continued, he was averaging 30 to 40 referrals each week from the Siesta Key Chamber of Commerce and about the same number from Visit Sarasota County. “Since the red tide, there’s nothing. We get four or five requests a month. I had two rentals in September.”

The solitary speaker who advocated for the Orioles during the public comments — Wendy Bitner of Bitner & Associates, a government consulting firm — pointed out that the team had promised to generate  $35-million economic impact each year; yet, the figure has proven to be about $97 million a year for the county.

The team also has remained committed to promoting Sarasota County on its MASN TV network, which reaches seven states, she said.

During comments to the county’s Tourist Development Council on Sept. 17, David Rovine, vice president for the Orioles in Sarasota, further pointed out that the team has provided more than $10 million to Visit Sarasota County for promotional efforts over the past nine years. “This investment is not mandated by our contract with the county,” he explained. “It’s a commitment from the Orioles … that is unmatched in Major League Baseball and possibly in professional sports.”

A graphic provides details about the Baltimore Orioles’ impact on Sarasota County’s economy. Image courtesy Sarasota County

Another initiative to help with emergencies

Commissioner Maio did put forth a separate motion on Oct. 23, directing staff to come back to the board within 90 days — after engagement with Visit Sarasota County (VSC) — on a plan for an alternative funding source to deal with emergencies such as the loss of county tourism because of red tide.

Commissioner Paul Caragiulo seconded the motion.

When Commissioner Charles Hines asked whether the board would control such a fund or direct VSC to handle it, Maio replied, “It is our money. … It’s for us to decide [how to spend it].”

Commissioner Moran characterized the motion as asking staff “to come to this board with a comprehensive plan to deal with … aggressive dips” in tourism, such as the latest situation with red tide or the aftermath of an event comparable to the 9/11 terrorist attacks.

Commission Chair Detert cast the only “No” vote. She told her colleagues that, as their representative on the VSC board, she already had suggested the tourism agency create what she called an “act of God” fund. “But that should be done by Visit Sarasota in their own budget,” she added. “We shouldn’t have to look through our budget …”

The stadium repairs

A graphic shows how use of the county’s 5-cent Tourist Development Tax may be utilized under state law. Image courtesy Sarasota County

During an Oct. 23 presentation to the board, Nicole Rissler, interim director of the county’s Parks, Recreation and Natural Resources Department (PRNR), reprised comments that her former boss, Carolyn Brown, made to the commissioners during their Aug. 22 budget workshop.

As required under the county’s agreement with the Baltimore Orioles, Rissler explained, the county has to hire a consultant to conduct regular assessments of both Ed Smith Stadium and the Buck O’Neil Baseball Complex at the county’s Twin Lakes Park. The Orioles have been using both facilities since 2010.

An assessment completed in July showed that about $16.5 million in repairs would be needed over the next 10 years, Rissler reminded the commissioners.

The $3.3 million for the current fiscal year — which began Oct. 1 — was included in the county budget without any diminution of the promotional resources for Visit Sarasota County (VSC), she pointed out.

In the 2020 fiscal year, Radtke of the Office of Financial Management noted, an extra $945,252 would be needed to supplement available revenue for the repairs; for 2022, the figure would be $812,710.

A graphic shows how the revenue from each of the five Tourist Development Tax pennies is allocated. Image courtesy Sarasota County

The proposed change to the TDT ordinance would increase the percentage of revenue set aside for the stadium account, balanced by a corresponding drop in the promotional revenue percentage in both the 2020 and 2022 fiscal years, Radtke explained. In FY2020, that meant the percentage of TDT revenue for the stadium would rise from 16% to 21%; the promotional revenue percentage would fall from 30% to 25%.

Arguments against the change

During the public comments, the first speaker — Christine Johnson, president of the Conservation Foundation of the Gulf Coast and vice chair of the VSC board — took issue with county staff projections that the TDT revenue will continue to rise an average of 5% per year over the next 10 years. A research firm with which VSC contracts is projecting a rise of 2% to 3%, she said.

Commissioners Hines and Moran took opportunities to read from a chart staff had provided, showing increases in TDT revenue every year since 2013. The historical average of those climbs since the tax was imposed in 1991, Hines added, is 5%. Therefore, Johnson’s position, Hines said, was that the county should rely on a private company instead of its own staff data.

Johnson replied that because the county will have added 1,177 hotel rooms by the end of this year, hoteliers have to charge less to fill those rooms. That translates into less TDT revenue, she pointed out.

A graphic shows how the TDT revenue allocations will be adjusted over the next several years. Image courtesy Sarasota County

Hines then noted that the TDT ordinance sets percentages of revenue from each of the five pennies of the tax for the allocation of funds to specific purposes. The increase in TDT revenue since 2013, he added, has led to more money for VSC for promotions.

Further, Hines noted at one point, the Atlanta Braves will conduct their first full Spring Training season at their new complex outside North Port in 2020. He referenced “all the word-of-mouth” among fans in the Southeastern United States about the team’s relocation to Sarasota County, which will drive people to the community. “That’s going to happen anyway,” Hines said, without the expenditure of any promotional money.

Other commissioners pushed back at another one of Johnson’s assertions, which was cited by a number of other speakers — that VSC needs to spend more money on promotional efforts because of the need to fill all the hotel rooms.

Any developer who decided to construct a hotel should have undertaken demographic and other research to ensure that the business could succeed, Chair Detert pointed out. “Maybe you overbuilt the area.”

She added that she sees “three hotels at every [interstate] exit” and has wondered how the managers could fill the rooms. “We’re top-loaded today with hotels,” Detert said, pointing out that a number of the speakers arguing against the TDT allocation change were hoteliers. “We have to represent the entire county, all 400,000 people.”

A second VSC board member, Jeff Mayers, general manager of The Resort at Longboat Key Club, pointed out to the board that other counties in the area spend far more on promotions than VSC does, so VSC should receive more money, not less, so it can be competitive.

A graphic presented to the county’s Tourism Development Council in November 2017 shows the impact of tourism on employment in Sarasota County. Image courtesy Sarasota County

“We are being outspent by our neighbors,” Johnson of the Conservation Foundation said, “and we are basically running in place with market share, which is not a sustainable model.”

Hines asked Mayers what would happen if VSC did spend more, and people coming to Orioles Spring Training games found, for example, that two restrooms in the stadium were closed and the two bars those visitors preferred, which were closest to their seats, were closed as well. “How do we deal with telling everybody in the world that we’re great,” Hines asked, only to have tourists find facilities in poor condition.

“Obviously, maintaining the asset is important,” Mayers replied.

Mayers and other speakers suggested the board find an alternative funding source for the stadium repairs.

The state has awarded a $50,000 grant to VSC to assist with promotional efforts to combat the negative red tide publicity, Mayers said. Yet, the state will not release that money for marketing until after the Florida Fish and Wildlife Conservation Commission and the Florida Department of Environmental Protection have determined that the red tide bloom has dissipated, he added.

Commissioner Maio explained that the General Fund in the county budget is the most flexible account for spending, but it also is the most constrained. Of the $290 million in the General Fund this year, Maio said, “Big, giant chunks of it are dedicated and can’t be touched.”

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