HOTEL TAX HIKE ON BALLOT

Cape Girardeau voters will decide whether to increase and extend the city's hotel-motel tax to help pay for Southeast Missouri State University's River Campus project.

The City Council voted 6-1 to place on the Nov. 3 ballot the proposal to increase the hotel-motel tax from 3 percent to 4 percent and extend the tax from 2004 until 2030.

In addition, the city's 1 percent restaurant tax would also be extended until 2030 but would not be increased.

The council also approved an accompanying measure calling for an $8.9 million bond issue to fund the city's share of the River Campus project.

The hotel-motel-restaurant tax, which funds the operations of the Convention and Visitors Bureau and the construction of the Show Me Center, Osage Community Centre and Shawnee Park Sports Complex, is now due to expire in 2030.

In 2004, property owners will see the 10-cent debt service levy per $100 assessed valuation approved with the original tax vote disappear, city officials have pointed out.

If voters approve the River Campus funding measures, that levy will not be reinstated.

If the funding measures are approved, the ordinance creates a joint operating board to oversee the design, construction and operation of River Campus facilities.

The ordinance also creates an escrow fund to put excess revenues. Those dollars will be available only to pay off the construction debt, principal and interest and will not be used for other projects.

Ward 1 Councilman Frank Stoffregen cast the sole vote against putting the tax increase on the ballot, saying the council hadn't been given enough time to review the proposal or look for alternative funding sources.

"One of the problems I have with this ordinance is that four weeks ago I first learned what the proposal was," Stoffregen said. "About two and a half hours ago, I received the actual ordinance. I haven't really had time to look it over. We're talking about something our grandchildren will be committed to."

The council voted down a proposal by Stoffregen to wait and put the proposal on the April ballot.

Mayor Al Spradling III said it would be "virtually impossible" to fund the project without a tax increase and bond issue.

"We don't have the money available," he said. "It's got to be a tax project."

The benefits the River Campus will bring -- increased tourism, economic development and cultural and aesthetic opportunities -- are worth the investment, Spradling said.

"The bottom line is, you take risks," he said. "If we didn't then we would certainly not be in the position we are now in Cape Girardeau. We would still have dirt streets."

The final package was worked out through negotiations between the city, the university and representatives of the hotel-motel industry.

Robert A. Drury and James L. Drury, representing Drury Inns Inc. and MidAmerica Hotels Corp., sent the council a joint letter expressing their support for the hotel-motel tax increase and the River Campus project.

"Although the time interval has been very short to review and discuss all concerns, we feel that the city and university have made strides to address certain concerns and incorporate some of them in the project ordinance," they wrote.

Council members received copies of the ordinances placing the two measures on the ballot at the 5 p.m. study session before the meeting.

City Manager Michael G. Miller said the ordinances were "still warm" because "we just finished it."

The new tax package will allow for operation of the CVB at its current level, as well as funding the university project, Miller said.

Southeast President Dr. Dale Nitzsche said he was "very pleased" with the council vote.

He credited Miller and Robert and James Drury for their cooperative efforts to "hammer out" the final package.

The original proposal, presented Aug. 3, called for increasing the hotel-motel tax from 3 percent to 6 percent and extending it until 2024.

The increase would have made the city responsible for raising $10 million of the projected $35.6 million cost, with the university raising $7.8 million through private donations and gifts.

With the package approved Monday night, the city and university will split the project costs, each being responsible for raising $8.9 million.

The university will ask the Missouri Legislature to appropriate $17.8 million to pay for the rest of the project.

If the state does not make that appropriation by 2001, revenues collected will be used to pay off existing bond debt, and the tax increase will be nullified.

The city and the university will sponsor joint public meetings to outline the River Campus project and tax measures, Spradling said.

With the River Campus, the university plans to develop the old St. Vincent's Seminary property to include a new performing arts center, regional history museum, experimental theater and classroom space for its fine and performing arts programs.

The performing arts center will be used to attract Broadway shows and other performances, and the campus will be available for a variety of community events and festivals, say university officials.