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Copyright © 2019 Albuquerque Journal
Albuquerque’s hoteliers are questioning a city proposal to devote millions of dollars in lodgers tax revenue to a “sports tourism” package that includes projects like new playing fields at Los Altos Park, netting at Isotopes Park, a new indoor track and a visitor center on West Central.
A local hotel industry group said it is not clear how the spending would increase visitation and has requested Mayor Tim Keller’s administration provide a “business case” for the projects before the city proceeds with a plan to issue $29 million in new lodgers tax bonds to pay for them.
The Greater Albuquerque Hotel & Lodging Association is asking to delay a forthcoming City Council vote on the proposal.
“Before GAHLA will support this specific proposal, more time and information are required to make sure we are making the best use of the excess funds to benefit the community,” the organization said in written comments provided during a public meeting Thursday. “Our goal is to tie the specific proposals outlined to a potential (return on investment) by the creation of increased overnight stays.”
The city’s lodgers’ tax – which raised about $14.5 million in fiscal year 2019 – is paid by those who stay in hotels and vacation rentals and is supposed to help promote and support tourism.
GAHLA members were unaware of the $29 million proposal until Keller’s office issued a news release a few weeks ago, according to Charlie Gray, the association’s executive director.
And the 120-member hotel association was not the only group caught by surprise.
Members of the city’s own Lodgers Tax Advisory Board said they knew nothing of the plan until Mayor Tim Keller announced it on Sept. 7. Some said they learned about it through media reports. The proposal went to the City Council’s Finance and Government Operations Committee two days later and is scheduled for final City Council action on Oct. 7.
“We are really disappointed and distressed about this,” LTAB Chairman Fred Mondragon said during the board’s meeting Thursday afternoon.
“The lack of communication is pretty deafening,” he said.
In an interview before Thursday’s meeting, Keller said the city is trying to move fast due to advice from its bond experts, but the LTAB – a volunteer, appointed board that makes recommendations to the city – has time to offer input.
“Actually, we’re going through the right process. They’re getting a chance to chime in before council (votes), and that’s fine,” he said. “No, we didn’t have nine months to go over this.”
A Keller spokeswoman said late Friday that officials have met with individual board members in recent weeks.
“Advisory boards play an important role in the public process, and we appreciate their input,” said the spokeswoman, Jessie Damazyn.
In announcing the package earlier this month, Keller touted it as a way to capitalize on National Senior Games momentum. The June event featured nearly 14,000 athletes competing at 21 venues in and around Albuquerque and had an estimated $34 million economic impact.
“This may be a whole new area of opportunity for us to attract conventions or other sports-related tourism,” Lawrence Rael, Keller’s chief operating officer, told the LTAB Thursday.
And officials say the time is right.
With growing lodgers tax collections, Chief Financial Officer Sanjay Bhakta said issuing bonds allows the money to have a greater impact than working with small annual surpluses. Favorable market conditions mean the city should move quickly, he said.
“The timing is very important right now,” he said.
Keller’s office initially said the projects would be funded through savings achieved by refinancing existing lodgers’ tax bonds; however, the city is in fact planning to issue $29 million in new bonds. It would use lodgers tax revenue to make the payments.
The LTAB and hotel professionals on Thursday peppered Bhakta and Rael with questions about the proposal and the justification for individual projects, particularly as it relates to tourism.
“I certainly understand all the projects, and they all have benefit to our community at large, but what we’re talking about here is how to use lodgers tax to increase the pot,” Rebecca Plutino, general manager of the Best Western Plus Rio Grande Inn, said during the meeting. “When we get more overnight stays, gross receipts (tax) goes up.”
Visitors to Bernalillo County spent $2.1 billion in 2016, according to a state-funded analysis by Tourism Economics. In addition to lodging, they spent $523 million on food and drinks and $396 million on retail. Visitors generated $77.7 million in local taxes, according to the study.
The hotel association said it supported money for balloon landing sites but questioned some of the others.
“Right now it appears that every (City Council) District wants a grab for the money, whether or not it has anything to do with increasing tourism,” the group’s letter said.
Some meeting attendees contended that more than $3 million of the $29 million should go to the Albuquerque Convention Center, which generates some of the city’s higher-spending visits.
The LTAB earlier this year gave the city a $6.5 million list of “high-priority” projects it sought for the convention center, including replacing skylights, roofs on both the east and west wings and elevators and escalators so “obsolete” that replacement parts are no longer available.
The $3 million assigned to the Convention Center under the current proposal includes the skylights and elevators but makes no mention of the roof. It would also add digital exterior signs.
One hotel executive at the meeting – conducted in a Convention Center boardroom – highlighted the urgency by pointing to the water stains on the room’s ceiling.
“Clearly, there’s a problem,” said Damen Kompanowski of the Sheraton Uptown.
Rael said the city would consider additional center needs in the future, but he characterized the current proposal as a win for the whole city.
“We’re investing in Albuquerque; these facilities are here, they’re a part of the city,” he said. “A lot of these revenues come from out of town, (and) this will give us an opportunity to do something for our citizens and do something for sports tourism.”
City Council President Klarissa Peña said Friday that she also has questions about some of the projects but that she believes they can be answered by the planned Oct. 7 vote.
The Route 66 Visitor Center included in the proposal has been one of Peña’s priorities for years. She said it does not fit the sports theme but that it would be for both tourists and locals. She said it would have a museum, taproom and large event space for gatherings like quinceañeras.
“Overall,” she said of the lodgers’ tax bond plan, “I think it’s a good package.”
Mayor Tim Keller’s administration has proposed issuing $29 million in lodgers tax bonds to pay for a number of projects around the city, most of them heralded as “sports tourism” opportunities. The plan before the City Council includes:
• $10 million to improve Los Altos Park, including new softball fields, a BMX pump track and concession improvements, which the city said could help attract tournaments.
• $3.5 million for a soccer complex at an unidentified site with locker rooms that could host tournaments and provide New Mexico United practice space.
• $3 million for the Jennifer Riordan Spark Kindness Complex (a West Side baseball venue formerly known as the Albuquerque Regional Sports Complex).
• $3 million for Albuquerque Convention Center upgrades, such as skylights and new digital signs.
• $2.5 million to buy property for balloon landing sites.
• $2.5 million for a new indoor track to replace the one currently used by the University of New Mexico and for track and field competitions.
• $2 million for a “multiuse trail” linking East Downtown to Downtown.
• $1 million for the forthcoming Route 66 Visitors Center at Central and 136th Street.
• $1 million for Isotopes Park upgrades, such as netting and field improvements.
• $500,000 for a “Northwest Mesa gateway.”