$21M York County land deal to cut visitor agency funds. Will it ‘devastate’ tourism?
The purchase of a new 1,900-acre recreation site in York County could mean no more NCAA cross country regionals. No more national level high school basketball or football showcases, says the man largely responsible for getting those events here.
“I support the land purchase,” said Billy Dunlap, president and CEO of the York County visitors bureau, “just not at our peril.”
On Monday night, the York County Council voted to approve a $21 million purchase of 1,900 acres along the Catawba River, off Neely Store Road near Rock Hill.
Four days earlier, Dunlap learned that the deal would mean a $600,000 cut in county money for his group, in the form of hospitality tax revenue over the next 18 months.
Total funding for the Rock Hill/York County Convention and Visitors Bureau would drop from $1.4 million to $800,000, he said.
“The current plan will cripple the CVB and devastate tourism in York County,” Dunlap said.
The county now gives the visitors bureau $900,000 each year.
“Reducing our Htax funding to $300,000 will devastate the CVB,” Dunlap said. “That $600,000 cut will also have a ripple effect for hotels, restaurants, attractions and more.”
The county has 12 new hotels coming in the next two years.
“They’re looking for us to help them meet their supply and demand needs,” Dunlap said. “Three years down the road, we’ll be wondering where all the tourism dollars went.”
Dunlap said the land purchase itself isn’t the issue. The property would be another amenity for Dunlap’s group to promote for prospective events.
“It’s unique to have the opportunity to purchase land that is going to be used for tourism purposes, but then cut the tourism agency by $600,000 annually in their budget,” he said. “To cut the organization 43 percent to purchase that land.”
Councilman Chad Williams said there may be ways to pay for the riverfront properties that wouldn’t bankrupt county tourism.
The impact to Dunlap’s group is a concern, Williams said.
“That’s my biggest concern about this (land purchase), is crippling one organization to do this,” Williams said. “I think it’s possible to do it without crippling that organization.”
Not all council members see the decision as so dire.
“I would like for us to understand how other CVBs are funded and make sure that we’re doing that responsibly,” said Councilwoman Christi Cox.
Councilwoman Allison Love, whose district covers Lake Wylie, said she would be willing to give up a fishing tournament or two for the riverfront property purchase. Love said she believes the visitors bureau could go another route for funding and likely come out ahead of where it is now.
Kevin Madden, assistant county manager in charge of finance, said other parts of the state don’t fund their visitors bureaus the way York County does now.
“Of the top 10 counties, we’re the only one that gave a dedicated source of funding from our hospitality taxes,” he said.
Instead, most such agencies receive money from a fee of up to 2 percent on bills for hotel stays.
“In a nutshell, they earn it,” Madden said. “The other CVBs — Greenville, Columbia, Charleston — they get the lion’s share of their money with agreements with hotels that they work with on their events.”
Madden believes the same structure would, and should, work here.
“Where there are already hotels willing to line up and participate and do that, that our CVB go out and get the money that way,” he said. “Earn their funding. We right now are an anomaly with the way we fund our CVB.”
County hospitality tax revenue is a 2 percent charge on food and drink in unincorporated areas. Accommodations tax is a charge on overnight stays at hotels, bed and breakfasts and the like. Most of the money from both, Madden said, has gone to the visitors bureau.
“I do not have any guilt about a drastic cut to the CVB,” he said.
Dunlap argues that tourism is an economic driver, impacting every York County citizen. Now is not the time, he said, to reduce funding.
“Getting events to come here is competitive,” he said. “It’s all about facilities and money. Our facilities stack up with anyone, but our funding does not.”
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Rock Hill and York County compete with Greenville, Columbia, Myrtle Beach and Charleston. Those visitors bureaus, Dunlap said, operate on budgets of $7.8 million to $40 million.
The funding cut would put York County, home to the fifth largest municipality in the state and four of the top 50, behind communities like Florence and Georgetown as the 12th highest funded, he said.
“Communities that are much smaller than us,” Dunlap said. “We’re behind communities that want to be us. And it’s not a fair fight.”
The bureau spends money on recruiting events, which includes money to event organizers that it looks to more than recoup from hotel stays, restaurant visits and stops at places like Carowinds and Brattonsville.
Most visitor bureaus, Dunlap said, get accommodations tax money from counties and municipalities.
Because Rock Hill has a parks, recreation and tourism department, hotels in the city route much of the money there, rather than to the countywide visitor bureau, he said.
“That leaves us with limited revenue,” Dunlap said.
Dunlap said his group is on pace for a record $20 million in economic impact this year. Just this past weekend, some of the top ranked high school basketball teams and players in the country came to Nation Ford High School for the Battle at the Rock. The event sold out Saturday night, which included a visit from NBA legend Allen Iverson.
Plans are to hold the event in the new indoor sports arena in Rock Hill next year.
A dozen new hotels will create a 30 percent increase in hotel room supply. Dunlap suggested county leaders ask hotels and restaurants the impact large events make.
“There’s not enough money to bring those large events here,” he said about the funding cut. “We end up bringing smaller events, and that’s less heads in beds. We’ve got 12 new hotels coming, and they are depending on us. We’ve already met with them. And they’re upset about where we’re at now going forward.”
Dunlap said funding needs to increase, not decrease.
Yet the council approved a plan that would route hospitality tax money to the new property on the Catawba River.
Only Councilman Robert Winkler, who voiced concerns on a lack of details for how the property would be used and funded, voted against it.
Madden believes using hospitality tax money to pay back bonds for the land purchase is the best route.
“That is the way we plan on paying for this,” he said.
The amount the county needs to borrow falls within its borrowing capacity allowed by law. With a $1 million contribution from land preservation group York County Forever, Madden expects the county to borrow less than $20 million.
There is a risk a future council might want to go a different way for funding, but apart from that possibility Madden isn’t bothered by taking on debt.
“That doesn’t bother me,” he said. “We’re planning on paying off all our (general obligation) debt by 2024. We’re financing this with what I consider the most cost effective way to do it.”
Winkler said it was just a few months ago when the county set course on a plan to be debt free in six years. Citizens told him, Winkler said, that they supported the idea but had concerns some new project would pop up and have the county borrowing again.
“Guess what?” Winkler said. “It didn’t take six years for us to find a really good project to now put us to where we will not be debt-free until well past the time we promised you just a few months ago.”
The lack of firm plans for the new site bothers Winkler.
Also, hospitality tax money has strict rules from the state on how it can be used. It has to go toward projects promoting tourism, which is why much of it historically went to the visitors bureau.
Without knowing what might be built on the new property, Winkler has concerns the hospitality tax may not be applicable to pay for it.
“Depending on some of the uses it could be used for, the county might have to pay back some Htax money,” he said. “If it’s used for something that doesn’t apply to that. Where is that going to come from?”
For now, the consensus on council and among county staff leaders is the project fits. It helps the land isn’t inside a city or town.
“Those hospitality tax dollars come from the unincorporated area,” Madden said. “This is an unincorporated area project.”
The move also means taxes won’t increase. Taxes from restaurant visits, which include diners who live inside and beyond York County, will be used.
“This will not result in a tax increase to the taxpayers,” Madden said.