Editorial: Protect The Original Intent Of Hotel Tax Dollars

By / Editorials / Wednesday, 24 February 2021 02:37

By WILLARD KILLOUGH III
Managing Editor

Artwork is subject to personal observations. Some like the works of Vincent van Gogh while others prefer Pierre-Auguste Renoir or numerous other modern artists. This editorial isn't about a favorite artist's works nor the content of a particular painting.
This editorial is about funding artwork with taxpayers' dollars. More specificity, taxpayers dollars that were originally dedicated to beach renourishment and tourism promotion. The latter of which was intended only to fund events that promoted, "More heads on beds" in local hotel and motel rooms. Later on in the early 2000's Carolina Beach Mayor Ray Rothrock lobbied hard to use those tax dollars to help fund lifeguards with the argument that providing lifeguards promoted a safer beach front for tourists.
Logical argument.
Short term accommodations such as hotels, motels, bed and breakfasts  must pay a room occupancy tax. Those taxes go to fund beach nourishment projects as well as tourism related expenditures and promotion. The Room Occupancy Tax Rate for Kure Beach is 6% and the combined State and County Sales Tax Rate is 7% for a total of 13% on a vacationer's bill. For example, a portion of the ROT goes toward funding beach nourishment projects which in turn helps maintain wide beaches for both locals and tourists to enjoy. But not just for the recreational aspect. More importantly, to maintain a buffer from the power of the Atlantic Ocean which can ultimately threaten oceanfront property values of both residential and commercial ventures such as hotels, motels and vacation rental homes.
The ROT is also used to fund a portion of the annual budget for the local municipal life guard programs to protect lives of people who enjoy the beach. It's an added level of safety for both locals and visitors.
There is an economic revenue generating engine built into the ROT tax legislation.
A portion of the revenues generated by the ROT are used to promote the Town as a tourism destination and another portion is used to cover tourism related expenditures like festivals and other events that put more heads on beds in rental accommodations. That part of the legislation serves to fund activities that help increase the number of people that visit the area and in turn increases ROT revenues.
A local non-profit is seeking  funding from a pot of taxpayers dollars to paint murals on the side of area commercial buildings without a fee to the property owner under a contract with restrictions. Those restrictions include the property owner having to pay for maintaining the mural for a period of five years and the subject of the mural is not determined by the property owner.
They desire to seek funding from local hotel taxes which require under state law that any such expenditure should result in increased tourism, or, "heads on beds" in hotels, motels, short term vacation accommodations.
That legislation was originally intended to split those tax dollars with a portion going to provide money for beach renourishment projects and another percentage being dedicated towards funding tourism related promotion and events that "put heads on beds" such as the annual Carolina Beach Music Festival or the Seafood Blues and Jazz Festival held each year at the Fort Fisher Air Force Recreation Area.  (Pre-pandemic, but will return in the future).
During the creation of the enabling legislation years ago, there was no discussion of those hotel tax dollars being spent on "art" or "murals".
Over time it was established that funding lifeguards promoted a safe beach which was an amenity for tourists. It was the original intent that large festivals that drew hundreds and thousands of people to Pleasure Island to spend a week or a weekend and were worthy of being funded by those Room Occupancy Taxes (ROT) from hotels, motels and short term vacation rentals.
And in the shoulder seasons before and after the prime summer season, those tax dollars were dedicated to events that would attract people during the slower months of the year.
During the Carolina Beach Town Council's February 9th, meeting Maureen Lewis - Founder and President of the Carolina Beach Mural Project presented a request for $10,000 of ROT funding.
When the Carolina Beach and Kure Beach Town Council's approved  levying the ROT, Murals or any other type of "art" was not on the list of approved expenditures.
In fact, hotel owners were only open to the idea of spending those tax dollars they were forced to levy upon their patrons bills on large events that would actually put "more heads on beds." That last quote became a common phrase among hotel owners, Council members and local Chambers of Commerce while promoting the ROT.
Prior to the most recent Carolina Beach Council meeting Maureen Lewis wrote, "To continue the pace of work begun in Spring 2020, the Carolina Beach Mural Project (CBMP), a non-profit organization that supports and funds Public Art in Carolina Beach, is respectfully requesting $10,000 in 2021 ROT (Room Occupancy Tax) funding to support Public Art in Carolina Beach." She explained, "The mission of CBMP is to celebrate and share the eclectic history and the cultural wealth of our island, inspire our beach community, welcome and engage visitors, and help CBMP become a destination for ART for Everyone. In less than one year, the non-profit organization has been successful in achieving this mission, attracting both local and regional media which increases the visibility and tourism of Carolina Beach. CBMP murals are currently being used by the Wilmington and Beaches Convention and Visitors Bureau in their marketing campaign, featured in Wilma Magazine and Our State is interested in writing an article about CB murals. Spectrum News showcased our “Surf & See” mural with a 3-minute feature in October 2020 and planning to run another segment in Spring showcasing the 2021 murals.
Lewis claimed that throughout the world, Mural programs are being used as economic development initiatives, with the goal of increasing tourism by making commercial retail sectors more attractive destinations for visitors, as well as local residents. Liz Whitmore, the Historic Preservation Planner for the City of Sanford, NC notes “There’s an economic tie. People are coming from all over to see our murals. And as we know, when people come to town to see the murals, they will most likely stay to eat and shop. It’s good for our local businesses”.
It's worth noting that Sanford, NC, unlike Carolina Beach, NC, is not a beach town were people visit for the purpose of enjoying the beach and the ocean. So while Sanford may benefit from the amenity of murals, that Town does not have a major attraction that overshadows all other attractions; the beach.
Forbes Magazine writes “Strategically placed art - on the side of a business, under a bridge, on the exterior walls of a community center - not only helps with the beautification of a neighborhood, but also, it can be a return of investment for commerce.” Forbes states that businesses located near murals can see up to a 50% increase in business due to visibility art gives an area.
If the CB Mural Project can provide actual verified data over a period of 3 to 5 years that shows a positive impact/increase in tourism then that data should be considered.
Lewis explained, "COVID did not stop the Carolina Beach Mural Project from fund-raising and making murals happen. In 2020, we raised over $13,000 which funded 3 murals (1 still to be installed in front of Town Hall). Our funding comes from sponsors, private donations, selling mural merchandise, fund-raisers, and grants. Murals cost between $4,000 to $15,000 each (depending on size, artist and theme)."
Lewis pointed out they raised $13,000 in 2020 to fund murals through donations, sponsors and grants. Sounds like they worked hard and did a great job securing donations. The argument is simple, keep fund-raising rather than asking for ROT dollars.
She explained, "Our goal for 2021 is to fund 4 murals that will celebrate the Beach Music Festival, the magic of the CB Boardwalk in Summer, the Venus Flytrap (subject still tentative) and CB’s rich Marine Life or Sport Fishing (subject still tentative). We have even bigger plans for 2022 & 2023. While the organization is working hard on fund-raising, the infusion of $10,000 from ROT monies would enable us to increase our budget and attract even more talented North Carolina artists to this program, accelerating the number and/or quality of murals we can install this year throughout CB."
She explained, "We know the media buzz has positively impacted our community and visitors. Art is tied to tourism and it increases dollars spent in the community. I have included just a sampling of how the first murals have been received on social media and some links to the press that highlight Public Art in Carolina Beach. Murals are reviving our downtown business district during shoulder and off- season. And the CB Mural Project has just begun."
During the February meeting Mayor Leanne Pierce said a decision would not be immediate and would be part of the ongoing budget planning process.
Councilman Steve Shuttleworth said in the previous year, "We cut almost everybody back by 50%" for non-profit requests for funding and, "The only one we gave full funding to was the Chamber for fireworks and their movies and then we didn't have it."
Shuttleworth said due to the current economic climate amid COVID-19, funding for beach renourishment may require the Town to search for funding to make up for a shortfall that was previously paid by the federal government. He explained, "Last year I think we cut back the Senior Center on their request. Those were direct dollars. Those weren't ROT tax. The only ROT tax we gave out last year and historically has been to the Chamber for their fireworks and their movies" at the lake. He explained that in previous years the Council allocated money for sea turtle protection  programs and other issues out of the Town's General Fund, but not from ROT tax dollars.
Shuttleworth said, "I'm cautious about opening Pandora's box to the ROT tax dollars. Those are specific by state legislation for either advertising for heads on beds and until we resolve the funding issue with beach renourishment and reallocations and all those issues that are up in the air it would be disingenuous for us to discuss or lead anyone to believe that ROT tax would be the dollars that we would be talking about. If the Council chooses to fund the mural project along with all the other non-profits, through general funds then that's a discussion that the public and the Council should have but we have never funded anything like that out of ROT tax. I just don't want Maureen to leave here or other people to think that that's where these dollars would come from. They never have. We've used them to pay for lifeguards but we didn't give them to the Sea Turtle Project" to help protect endangered nesting turtles.
Mayor Leanne Pierce said it would be interesting to see how the County TDA (Tourism Development Authority) would view the request for funding for murals.
Shuttleworth said he wasn't  saying ROT funding was out of the question pending their review, but he didn't want Maureen to get a sense that funding was available and, "I'm not saying it can't be, but it would be a paradigm shift in the County to do those kind of funding out of ROT."
Following the meeting Lewis wrote in an email to the Council, "On behalf of the Carolina Beach Mural Project, thank you for allowing me to present our request for ROT funding to support our mural efforts at last night's council meeting. Our intention of approaching you for support was only to solicit ROT funding and not depend on any direct tax payer monies from the town's General Fund. Our product (murals) is aligned with the Chamber product that is supported by ROT funds (fireworks & lake movies). The CBMP and Chamber both provide experiences that encourage visitors to come to Carolina Beach and fill hotel beds. In fact, the only difference is that our product provides for tourism growth every day..... all year. Thus I would like to again ask
that you consider allocating $10,000 of the ROT funds to the Carolina Beach Mural Project. I will also contact Kim Hufham, President & CEO of the TDA to consider our organization as a vital piece of cultural tourism that is bringing recognition to Carolina Beach through the Carolina Beach Mural Project public art program."
ROT dollars were not meant to improve individual properties in any shape form or fashion. That includes painting buildings, even if declared as "art", because those individual commercial property owners can and have paid for murals at their own expense over the years. Subway restaurant years ago had a flag mural painted on the side of the building. The Lazy Pirate restaurant has a large Carolina Beach mural painted on an adjacent building. Flaming Amy's restaurant has a mural. They all paid for that amenity on their own dime, not taxpayers dollars. And yes, ROT taxes are "taxpayers" dollars because they are directly tied to a tax that both helps fund renourishment of our beach front with additional sand while also funding large scale events to help attract more tourists to help perpetuate that beach nourishment funding mechanism. It's all about getting as many people into the mix as possible and benefiting by refueling that fund with more ROT revenues.
Those tax dollars are charged to people who visit our town and while they are taxed, they don't have a vote at the ballot box on how those dollars are spent so it's obvious they won't directly complain. But the local residents that depend on tourism promotion to attract tourists to our Town to help fuel our economy and offset our cost of living in terms of local property tax dollars and utility bills funding infrastructure projects. Massive numbers of people do not come to the beach to look at artwork, they come here because they want to lay on the beach, get a tan, swim, eat at good restaurants where the menu isn't good just because of the artwork on the outer walls, and attend festivals that attract thousands of people, visit the NC Aquarium at Fort Fisher, the Fort Fisher State Park, the Carolina Beach State Park, go fishing on charter boats, etc, etc. Art is wonderful. Private donations or state and federal grants created entirely for the purpose of funding such projects is the best way to achieve that overall goal.
ROT dollars are not the appropriate funding mechanism. If such funding from ROT funds is approved, it will open the door for even more similar requests by setting a precedent that once established will be hard to argue when future requests flood local leaders in boxes.
There are many local non-profits that attract tourists that have never asked for ROT dollars. Perhaps the Mural project should continue their successful fund-raising efforts.

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