City faces decision on restaurant tax

The city council Monday night faces an initial decision of where to direct over $1 million a year generated by dining out in Cape Girardeau.

Several options are on the table, all of which will require voter approval in November for an extension a 1 percent tax on gross restaurant receipts. While the council is almost certain to ask for a 4 percent lodging tax extension to fund the Cape Girardeau Convention and Visitors Bureau, what exactly the restaurant revenue will go for remains the subject of much debate among the council, the community and those whose interests fall in the tourism and recreation industry.

Among the major items proposed to be funded with the restaurant tax are a new police or public safety station, which has emerged as a favorite so far for the majority of the council because of the questionable suitability of the current station's condition.

Also proposed are an indoor sports complex project in a yet-to-be-determined location and large water slide addition to Cape Splash. Additionally, a separate proposal from the Cape Girardeau Historic Preservation Commission would create historically focused tourism activities and building improvement programs and initiatives for downtown.

City manager Scott Meyer and his staff will have an ordinance prepared for the council to vote on during Monday night's meeting that will allow a lodging tax question to be placed on the ballot.

But an ordinance for a restaurant tax extension hadn't yet been readied as of Friday, as staff needed to prepare them in several ways, depending on the ballot question's intent, Meyer said. The council will need to decide whether to merge the renewal of the lodging tax and restaurant tax into one ballot question.

The taxes are up for renewal as bonds used to help build the River Campus at Southeast Missouri State University are retired, per an agreement between late Cape Girardeau businessman Jim Drury, who owned MidAmerica Hotels Corp. The bonds were paid for with the restaurant tax revenue, which produce about $1.3 million a year. Before the River Campus project, the revenue paid for the construction of the Show Me Center, the Osage Centre and additions to the Shawnee Park Sports Complex.

A turn of the tax to pay for public safety needs, in this case to replace a deteriorating police station, is being pushed for by the majority of the city council. But some council members and a group of restaurant and hotel industry leaders want to see the other proposals considered.

Joel Neikirk, president of MidAmerica, initially proposed the city ask voters to extend the restaurant tax for the indoor sports complex and water slide. That proposal stands, but with more flexibility included, along with support of the city's parks and recreation department, Neikirk said Friday.

The first proposal asked for the indoor sports complex to be placed in a large vacant site at West Park Mall, but some pushback came over concerns about the potential risks involved with a public-private partnership and whether the mall would be the best location. Now Neikirk said it doesn't necessarily matter where the complex goes, just that the community would benefit from it.

"If the mall isn't a reality because of the players involved, the core of this remains that we still need this project to help us," Neikirk said.

He said the restaurant and hotel industries, which employ around 3,500 people, need the indoor sports complex to bring in customers during the winter slowdown each year. Niekirk said the extra business would increase revenue going to the city from restaurant and lodging taxes, and the community would enjoy the benefit.

"We need to be doing things that assure jobs are there and can stay there," Neikirk said.

The parks and recreation department also has expressed interest in running the facility instead of it being managed by Vetta Sports, a private company. The department also would develop the indoor sports complex project into the right size for the community, Neikirk said

Some council members requested a more in-depth look at public safety needs and other revenue streams as the possible change in direction for the restaurant tax revenue has been discussed. The cost of a new police station or public safety center hasn't been estimated by the city, but an ongoing study suggests the cost of an ideal police facility, with a municipal court, would be $16 million. City officials said the number is higher than what would likely be spent.

Neikirk's indoor sports complex and water slide proposals are proposed to be funded with a three-year extension of the restaurant tax. The tax would sunset when revenue reached $3.5 million or three years had passed.

The historic preservation commission's proposal would need an estimated at $1.16 million a year from the restaurant tax, or $5.8 million over five years for a visitor center; heritage tourism grants; an events coordinator and guide position; facade improvement grants; preserving city-owned historic properties; studies on the reuse of historic city-owned properties; support for the Old Town Cape downtown revitalization group; and interpretive signs for historic buildings and sites.

The council plans to vote on the lodging tax and will likely hold a vote on the restaurant tax at its regular meeting at 7 p.m. Monday at city hall.

eragan@semissourian.com

388-3627

Pertinent address:

401 Independence St., Cape Girardeau, MO