Community idea for stadium area — set aside part of city’s hotel-motel tax

By Maria Saporta

Sometimes its feels as though the Community Benefits Plan meetings set up by the City of Atlanta can veer from the ridiculous to the absurd.

The sixth, and supposedly the next to the last of these meetings, was held Wednesday night at the old Atlanta City Council Chambers of the historic City Hall. And the committee was still trying to figure out whether they were working on a Community Benefits Plan or a Community Benefits Agreement.

That debate has been going on since the very first meeting, and explanations by Mayor Kasim Reed (at a meeting I did not attend) and by City Councilman Michael Julian Bond, who has been chairing the last several meetings, have failed to totally satisfy the community. Their argument is that first they have to come up with a plan, and then it can become an agreement.

But once in a while, in the midst of the back-and-forth chit-chat about process, bureaucracy and various self interests, moments of inspiration emerge from members of the community.

On Wednesday night, one such idea came from Greg Hawthorne, executive director of the Vine City Housing Ministry.

Hawthorne — who is well-versed in the city’s hotel-motel tax legislation — suggested that the city set aside part of its portion of the tax to help pay for improvements in the communities that will be impacted by the new Atlanta Falcons football stadium.

Hawthorne expressly said that he was not talking about the 39.3 percent of the hotel-motel tax that is restricted to the Georgia Dome or a successor facility. He was talking about the share of the hotel-motel tax that the city receives and is totally unrestricted.

But it seems as though Hawthorne is better informed that some city officials about that tax.

Towards the end of the meeting, one of the members of the Community Benefits Plan committee made a motion to recommend that the city set aside a portion of its hotel-motel tax to be invested in the community.

But he was quickly told by city officials that it would not be possible legally, so he withdrew his motion.

So here is a primer about the City of Atlanta’s hotel-motel taxes. This was taken directly from the Reed administration’s presentation to City Council when it was urging the legislative body to support the new football stadium. One of the arguments was that if the hotel-motel tax was not extended to pay for a new stadium or to renovate the Georgia Dome, then the city would lose its share of the hotel-motel tax, which goes directly into its General Fund.

To summarize the info below, the city collects a 7 percent hotel-motel tax from overnight visitors. Of that, 39.3 percent goes towards the Dome or successor stadium; 32.14 percent goes towards promoting tourism; and 28.56 percent “is not restricted by statute and has been deposited to City’s General Fund.”

By the way, an 8th penny was added to the city’s hotel-motel tax, but 100 percent of those revenues are dedicated to the Atlanta Convention & Visitors Bureau.

During its presentations to City Council, the Reed administration did include how much the unrestricted portion of the hotel-motel tax goes into the city’s General Fund. But I could not find that number tonight.

So I’m going to give you a best guess. The 39.3 percent was expected to generate about $19.5 million to the Georgia Dome this past fiscal year. That means that 28.56 would probably have brought in about $12.5 million to the city’s coffers. (I’ll be happy to provide you the exact numbers if and when I get them).

Atlanta City Council President Ceasar Mitchell, standing in the back of the old Council Chambers Wednesday night, was intrigued with the set-aside idea. He told me that he believes it is inevitable that the city will end up having to pay for part of the project mitigation costs in the community as a result of the stadium.

Those costs could involve investing in traffic mitigation, additional maintenance of sidewalks, improved infrastructure and other community improvements. All those investments likely would not be part of the Community Benefits Plan (or is it Agreement?).

Creating a separate mitigation out of a portion of the city’s unrestricted hotel-motel tax ahead of time could be an idea worth looking into, Mitchell told Hawthorne.

So this idea may have legs after all. And it may be one of the tangible initiatives to come out of the Community Benefits Plan or Agreement process when all is said and done.

Slide in City’s Presentation:

Hotel/Motel Tax

Current H/M Tax will expire December 31, 2020

Atlanta’s Restrictions:

– May be extended to December 31, 2050; provided that 39.3% of collections (of 7% H/M Tax) is used for “successor facility” to Georgia Dome

32.14% (of 7% of H/M Tax) toward:

• Promoting tourism, conventions and tradeshows

• State Authority‐owned facility for convention and tradeshow purposes

• Local Authority or Local Government‐owned facility for convention and tradeshow purposes (in operation before July 1, 1987)

• Local Authority or Local Government‐owned facility for convention and tradeshow purposes (if construction funded (fully or in part) by state funds)

• Can be a combination of the above
Except for locally‐owned facilities, funds must be expended through a contract with the state, a state department, state authority, or nonprofit

39.3% (of 7% of H/M Tax) toward:
• Georgia Dome and “successor facility,” if extended

100% of additional 1% of H/M Tax:
• Not for profit destination marketing organization (e.g., ACVB)

Remaining 28.56% (of 7% of H/M Tax) is not restricted by statute and has been deposited to City’s General Fund 

Maria Saporta, Editor, is a longtime Atlanta business, civic and urban affairs journalist with a deep knowledge of our city, our region and state.  Since 2008, she has written a weekly column and news stories for the Atlanta Business Chronicle. Prior to that, she spent 27 years with The Atlanta Journal-Constitution, becoming its business columnist in 1991. Maria received her Master’s degree in urban studies from Georgia State and her Bachelor’s degree in journalism from Boston University. Maria was born in Atlanta to European parents and has two young adult children.

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