Email to County Executive & County President re HDIP

Jan, Bud: please for the sake of the County and for your own stakes stop being so stubborn about pressing ahead on the funding of the hotel with CB16-13 and the MOU Amendment. The hotel development incentive program is a potential disaster. For a start your own staff are confused as to how it will work. The documents accompanying CB16-13 are a mess. They give two different accounts.

The MOU Amendment says that the full tax will be collected at the DH&CC and other developmentally incentivized hotels but that up to 85% of those funds will be “set aside” for that hotel’s debt service with the details of how those set aside funds are managed left up in the air.

Helen Propheter’s report to County Council by contrast describes a rebate system in which the lesser tax only will be collected rejecting the MOU Amendment notion of a set aside saying explicitly that no development fund will be provided.

Which is it?

Presenting two different descriptions in the one set of documents is a clear indication of confusion and haste. In another way it won’t matter. Present state law simply does not allow either such scheme. The read I get is that state law on the hotel tax does not even come close to allowing this thing whether a rebate scheme or a set aside scheme. Do you have an opinion from the County Attorney that current state law accommodates it? What does the State AG say?

Then you really should think hard about the implications of giving Tourism Council responsibility for managing this program. It’s a trade association. Advising on an incentive program, fine. But delegating it power to decide what projects and what developers deserve the privilege of how much by way of rebates or setasides… it is difficult to imagine a surer way to attract charges of favoritism, and often valid charges, if not outright corruption. Will state legislators really allow a trade group to run a selective tax rebate/set-aside scheme? Will the public stand for it?

There is mention in the staff report of research done into such incentive schemes elsewhere. No research has been published. I don’t know even of a powerpoint presentation on the scheme. Maybe I missed it. Have you read any such research? How are such schemes set up? Where are they? How have they worked out? We don’t know. We should know before we plunge into this, surely.

Regards

Peter Samuel

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