Tourism development fund discussion continues

In discussing the Tourism Development Fund with dozens of listeners in a question-and-answer format, City Council and staff said that without the fund, the city’s only option would be to raise property taxes.

Members of the Williamsburg City Council met Thursday evening to discuss the fund with residents at the Williamsburg Community Building.

Audience members wrote their questions down, then listened as council members heard and answered them. Inquiries ranged from the big picture of the fund to what it might pay for.

The meeting was scheduled because Mayor Paul Freiling and other council members did not think they’d given the public a chance to have their questions answered at length in a public setting.

Council members had decided to table any action on the fund at their July 13 meeting.

“People were not comfortable enough with it, so we put it off for another month,” Freiling said.

Council members believe Williamsburg needs to attract more visitors and the Tourism Development Fund could be a way to create attractions in the area that will accomplish that.

In January, City Manager Marvin Collins pitched the fund as a chance to create a “generational change” in the city’s tourism efforts.

He forecasted the fund could collect as much as $3.5 million in its first year from increasing the meal and room taxes from 5 percent to 7 percent and adding an admissions tax of 3.5 percent.

City staff say some of the cities Williamsburg competes with for tourists — Asheville, N.C., and Virginia Beach — have raised their taxes and dedicated that money to tourism.

Bill Scruggs, co-owner of the Fife and Drum Inn on Prince George Street, still has an issue with the way the city is considering changing its tax structure.

“Just because other cities are doing it doesn’t make it right,” he said.

Collins said the city’s budget is too constrained to fund some of the tourism projects the city has in mind. Without the money for those projects, they are delayed from year to year.

“Our operating budget is under challenge moving forward,” Collins said. “Hopefully, we’ll make up some of that like we always do.”

An audience member submitted a question about whether there was a Plan B if the Tourism Development Fund did not come to fruition.

Vice Mayor Scott Foster said the city would need to turn to real estate taxes to make up the revenue needed to accomplish the council’s tourism goals. The budget is too tight otherwise, he said.

“Our real estate taxes will become equal to or exceed our neighboring jurisdictions,” he said. The city’s real property tax is 57 cents per $100 assessed value. York County’s is 75 cents and James City County’s is 84 cents.

A five-person committee appointed by City Council would vet projects to be paid for with development fund money. Three would come from tourism-related careers and the other members would be selected at large by council.

There is no set list of projects just yet — only suggestions — and Freiling said the fund could help spur private investment in projects that the city could also help finance.

An aquatics center at the College of William and Mary was one of his examples.

Such a facility is too much for the city to handle given its budget constraints, but tourism fund money and college donor money could help the city’s tourism efforts.

“It pays much better dividends than if the city tried to do it alone,” Freiling said of attracting private investment.

He said that in recent years, the city’s budget has allowed for core services, but not much else tied to tourism. Projects such as a fourth field a Kiwanis Park have been on the city’s radar for more than a decade.

“The projects that were related to tourism were continually getting pushed to the rear,” he said.

Foster said the city is overdue for an attempt to improve its tourism stock.

“Tourism is something this community has not really invested in, in a big way, really, since Rockefeller,” he said.

John Rockefeller Jr. was a benefactor of Colonial Williamsburg, financing its restoration.

Council is also considering a sunset clause on the tourism fund, although a timeline for the proposal has not been discussed.

“I’d be very open to that, personally,” said Councilman Benny Zhang. “I don’t see why we couldn’t do it, but ultimately it's a discussion among all five of us.”

Council has the option to vote on the fund and the tax changes at its Aug. 13 meeting.

“Some people think that we are moving too slow, believe it or not,” Freiling said. “Some people think that we are moving too fast. Maybe that means we’re doing it just right.”

Wright can be reached by phone at 757-345-2343.

Copyright © 2019, The Virginia Gazette