An informal proposition to members of the Mobile Area Lodging Association yielded mixed responses to a proposed 2 percent hike in Mobile County’s lodging tax, aimed at funding the much-debated soccer complex near the intersection of Interstates 65 and 10.
County Commission President Connie Hudson said she met with Retirement Systems of Alabama CEO David Bronner Dec. 4 to discuss the scope of the proposed soccer facility, which is expected to cost $20.7 million in its first two phases of construction.
RSA owns and operates the Renaissance Riverview Plaza and Battle House hotels downtown, both of which are represented in the lodging association.
Hudson stressed the discussions were informal and said no funding source or sources had been agreed to by anyone and multiple funding options were being considered. However, she did say Bronner was very supportive of the commission’s plan to build the 10-field soccer and aquatic facility.
“I presented the project scope to him and I think extremely enthusiastic would be the description that fit him after seeing the project,” Hudson said. “He immediately understood the vision, and understood what an impact it would have on our whole region.”
Bronner told Lagniappe the idea was “enticing,” and said facilities for soccer and other sports have been very beneficial to other communities, including Montgomery. However, Bronner didn’t say exactly what role, if any, RSA would play in developing this project.
“Anytime you can get that many people into your city, it has a real impact,” Bronner said.
“In Montgomery, we learned through the (Emory) Folmar soccer complex that it can really be beneficial for a city.”
Though hotels in Mobile would most likely benefit from the increase in soccer-related tourism the county is anticipating, it doesn’t seem like a 2 percent increase in lodging taxes has their support yet.
Kent Blackinton, president of Mobile Area Lodging Association and RSA employee, said he and another member met with Hudson informally to discuss what kind of support hoteliers might have for raising lodging taxes to help fund the project.
“While everyone agreed a facility would be helpful, there was an overwhelming disapproval to add a 2 percent lodging tax to fund it,” Blackinton said in an email to commissioners. “In fact, I did not get even one member that supported it.”
Blackinton said Mobile’s lodging tax is already high for the city’s size, and a 2 percent increase would put hotels at a competitive disadvantage when trying to attract conventions, conferences and general tourism.
Alabama has a 4 percent state tax on lodging, but when municipal and local taxes are added in, Mobile’s total tax is currently at 14 percent as of 2013. The majority of that is made up of the city’s 8 percent lodging tax.
According to a study by HVS Convention, Sports and Entertainment Consulting, Mobile’s lodging tax rate is already higher than New Orleans (13 percent), Las Vegas (11.5 percent) and Honolulu (13.7 percent). In the state, Mobile’s lodging tax rate is second only to Birmingham’s and Tuscaloosa’s.
An additional 2 percent would put the city well above the national average of 12.6 percent, though it would most directly affect businesses and tourists as opposed to full-time residents.
Bronner himself said it was important to make sure an area’s lodging tax isn’t “way out of line with everybody else.”
“How do I compete with Biloxi or New Orleans? What you’re really looking for is conferences,” he said. “Because of the size of the hotels in Mobile, you have a nice ability to really entice middle-to-large sized convention groups.”
Hudson dismissed the concerns expressed in the email from the lodging association, saying there must have been “some sort of disconnect” given the support for the project Bronner expressed.
According to Hudson, Bronner even offered to help the county make contacts with developers to partner with the county in the later phases of the project — plans to include an aquatic center, walking trails and a water park.
“It would strike me as a little more than surprising that, with the investment RSA has in this community through its hotels, that (Bronner’s) hoteliers would speak out in opposition to something that he is very much favorable toward,” Hudson said. “I would also question, given the informal nature of this, that there’s been any kind of vote taken by the hoteliers. There’s certainly not been a presentation by my office.”
Hudson said she was admittedly surprised to get an official letter about the association’s opposition to the proposal, when the discussions about it were “basically all done as hearsay.”
District 3 Commissioner Jerry Carl, who has been at odds with Hudson’s proposed soccer facility since a proposal of his own was voted down by the commission earlier this year, said Hudson acted on her own regard. In an email response to Blackinton, Carl said he “wasn’t aware of any discussion the commission had about raising the lodging tax to pay for the soccer complex.”
“In fact, personally I feel our lodging tax is at the point of becoming a negative point to conventioneers looking at Mobile County,” Carl wrote. “No sir, raising taxes is not an option as far as I am concerned.”
The lodging tax in Mobile County hasn’t increased since April 2003, when the county added a 2 percent increase. Set up to fund tourism marketing for the Mobile area, a portion of those funds is received annually through a contract between the county and the Mobile Bay Convention and Visitors Bureau (MBCVB).
However since then, the funding level has fluctuated and was even completely eliminated from 2008-2010. According MBCVB President Al Hutchinson, the highest the funding ever reached was $1 million in 2006. After being reinstated in 2011, the annual funding has remained constant at $280,000 per year for the past three years.
As a requirement of contract, 85 percent of the money received by MBCVB must be spent on marketing for “specific events that attract tourism to Mobile County,” but the $280,000 the MBCVB receives is only about 12 percent of the $2.3 million the tax is estimated to bring to the county.
The changing nature of the first 2 percent tax may have an effect on how the most recent proposal was viewed, but in his email and interview with Lagniappe, Blackinton said he nor the other members of the lodging association are opposed to adding a soccer complex. In fact, most would be in favor of it, unless it comes with an increased lodging tax.
“It’s something we need and it will bring visitors, but we don’t want to raise lodging taxes to get there,” he said.
Updated on Dec. 23 to correct the current lodging tax for the Mobile metro area.