Cache Lodging Association Questions Tax For Fairgrounds

Mar 17, 2017

Cache County plans to demolish and replace outdated fairground buildings
Credit Cache County

An increase in the Transient Room Tax (TRT) - a tax guests pay to stay in Cache Valley hotels - has been approved by the Cache County Council. Members of the local lodging association are wondering how they will compete with nearby hotels that can charge guests less.  

Cache County Lodging Association members also question the use of an overall 4.25 percent TRT to make improvement to the Cache County Fair Grounds.

Cache County Executive Director Craig Buttars remembers browsing the Cache County Fairgrounds as a child. He recalls the smell of cotton candy and popcorn and spending time in the white, wood framed buildings that line the main roadway. Although those same building were at one time used for housing interned prisoners during WWII, they are best remembered as a place to showcase homemade preserves and hand-crafted projects each summer in August.

"As a kid I used to bring produce out of my own garden and display it there in the 4-H building, and I still remember," Buttars said.

If all goes according to plans by Cache County, visitor to the August 2018 Cache County Fair will walk through a new building to view community sewing and art projects. Red, blue, pink and purple ribbons will still be used throughout the building as a way of recognizing awarding-winning quilts and flowers.

"It will be more contemporary," Buttars said. "I think we are going to try and preserve as much of those old traditions as we can."

The existing series of buildings is scheduled to be demolished in August following the 2017 fair.

To help pay for the new facility, the county has allocated $300,000 in one-time money from Cache County Visitors Bureau reserve funds. The money will be used to help pay for demolition work at the fairgrounds and will reduce the amount the county will need to pay toward a building bond. 

"I think it will be a boon and a benefit to people here in the valley," Buttars said. "So I think that this is really a good use of that money."

Cache County has applied for a 15 year community impact board loan and will pay $226,000 annually for the improvements. The bond will be used to pay the cost of removing existing structures and for building a large events center. The county has already received a request by the Cache Valley Cruise-In organization to use the new building for an antique car auction.

Director of the Cache Valley Visitors Bureau, Julie Hollist-Terrill was surprised to learn a portion of money she set aside for marketing and promotional purposes is going to be used to help pay for the structure. Hollist-Terrill had hoped to keep the money in reserve to support existing tourist attractions.

"I've been saving, putting aside, sacrificing for about 10 years to be able to put some money aside," she said. "Knowing that in the future, which is now, that there would come a time when we would need those funds to be able to kind of give a boost to some of the infrastructures and some of the organizations in our community that really are resources to bring and draw tourists here, especially tour buses." 

In addition to the visitors bureau money, the council will use TRT funds. Tuesday, the council approved a 1.25 percent TRT increase. Guests staying in Cache County already pay 3 percent in taxes to the county to stay there.

"I know the buildings are old, they do need to be replaced," said Cache County Visitors Bureau Board Chair Shirlene Davis.

Davis is also director of sales for a local hotel and convention center in Logan and is a member of the Cache Valley Lodging Association. She and the 17 other association members question claims by county officials that the new fairground facility will bring in outside guests.

"It is proposed to bring in outside conferences and additional business to the valley," Davis said. "I question that, after speaking with different counties around the state who have done basically the same thing on their county fairgrounds. The return on the investment, we don't know if it is there. I would love to see a feasibility study,"

The county and the visitors’ bureau have agreed to pay for a feasibility study. Davis said the study is too late to keep room rates in the valley low. Hotel, motel and bed and breakfast owners say the current tax of 3 percent helped them complete with lodging options outside Cache Valley. For each room reserved at her hotel, Davis estimates the customer will now be taxed approximately $2.11.

"It may not really impact that guest that is coming in for one night," Davis said. "But if you are at a hotel that is competing with other venues within or without our state to bring in a multi-day conference that wants a large group block, that $2.11 per room tax can have an effect on whether they make the decision to bring their business here or go elsewhere." 

Prior to Tuesday’s meeting, the association sent a letter asking Buttars and the council to reconsider the tax increase.

"I do know that Weber County also, they do charge the 4.25 [percent] and so we will be on the same level as they are," Buttars said. "It will not make a lot of difference."

The lodging association also wants the county to fund the fairground events center by capping the amount of TRT used to help pay off the bond. They are suggestion a cap of $176,000 each year. When the county begins to see returns on the fairgrounds investment, lodging association members hope county officials will agree to pay back the tourism reserve money and allocate additional money from the TRT to use for tourism marketing.

“I think the council needs to evaluate the amount of funding that is coming in through the Transient Room Tax, so I don’t really want to put a cap on the amount that is going towards the building,” Buttars said. “I think that is still open for discussion.”

Davis credits the bureau's marketing efforts for bringing in $18 million in hotel revenue to the county during 2016.

"It was an amazing year. We are starting to see amazing results from oversea travel bus groups. We are really starting to see the impact of that.”

The lodging association is also asking that $50,000 of the money needed to cover the bond payment come from restaurant taxes and the counties Recreation, Arts, Parks, and Zoos (RAPZ) Tax.