Police station isn't the only proposal for restaurant tax

With a sunset fast approaching, Cape Girardeau's city council faces deciding an exact question to put before voters so a 1 percent gross receipts tax can keep building something new for the community.

A new police station is high among most council members' priorities, meaning in November voters could choose whether to extend the restaurant tax to build one. But not everyone is OK with a stream of revenue, traditionally used for capital projects that promote tourism, filling a public safety need.

Since the tax was first approved in 1983, the revenue has gone to pay off bonds used to build popular public venues on Southeast Missouri State University property such as the Show Me Center and the River Campus, along with helping build the Osage Centre and Shawnee Park soccer fields complex.

A 4 percent tax on hotel and motel receipts began at the same time. Revenue from that tax funded the establishment of a convention and visitors bureau and have since paid for its operation.

With no major project in the tourism sector identified and pitched to voters for approval as in years past, several council members, including Mayor Harry Rediger, have turned their attention to fixing a long-festering problem: the police station.

The current station has seen its share of problems in recent years -- a leaky roof and crowded jail and office space among them.

Councilman Mark Lanzotti, who favors asking voters to extend the tax for a new station, calls it "the one big thing the community really needs."

"It's time. Every building has a life cycle, and that building is at its end," he said.

Councilman Trent Summers doesn't argue that point with Lanzotti, and it seems the majority of the council agrees an investment for improving police facilities is needed. But Summers raised several issues when it comes to what to ask voters in November. Summers said he wants to see an in-depth look at future public safety facility requirements and other options on how to meet funding needs.

"I know there has been some discussion about eventually combining police and fire into one central safety department, and I think if that is a long-term goal it should be part of the evaluation and discussion on what our needs are for infrastructure," he said.

Also concerning Summers is taking away a tax revenue stream from tourism and recreational projects that he said has been worthwhile.

"I think it would be a disservice to stop that investment and redirect the money toward some other need," he said. "I think there are other options to be explored to funding needs for public safety infrastructure. I don't know what all the answers are yet, but I don't feel like we've exhausted all the options. I believe there could be significant, negative effects if we don't continue to invest in tourism."

Summers wants the council to consider asking voters to temporarily extend the tax so there is time to evaluate where the revenue eventually should be directed.

According to an ongoing study, the cost of an ideal police facility, with a municipal court, is $16 million. That's just an initial estimate.

The restaurant tax, enacted in 1983, produces about $1.3 million annually, and the total historically has risen each year.

City manager Scott Meyer said the $16 million estimate in the study doesn't mean the city actually plans to spend that amount on a new police station if voters approve extending the tax for that purpose.

"We make the project fit the budget," he said.

As it stands, Meyer said the majority of council members seems to want the ballot question that asks voters whether to extend the tax for 10 years to fund a police station. That could change as discussions continue, he said.

But there's not much time left -- the council must approve a plan for sending the restaurant tax to the ballot at its next meeting July 15 to include it on the November ballot.

Although the council has not yet reached a consensus on how the city should propose the tax be directed, they seem to be coalescing on the 4 percent hotel/motel tax, Meyer said, which always has been coupled with the restaurant tax on the ballot.

Meyer proposed to council members at their annual retreat in April that they ask voters to make permanent half of the 1-cent restaurant tax because no project had been identified, make permanent the hotel/motel tax to fund the convention and visitors bureau, and make permanent half of a 1/4-cent fire sales tax, set to expire in 2014, so ongoing public safety needs would be covered.

Casino revenue

If there is one thing holding council members back from wholly throwing support behind the restaurant tax to fund a police station, it may be the city's newest revenue stream -- casino money. The city began receiving money from Isle Casino Cape Girardeau's admission fees and 10 percent of its total state taxes when it opened in November. The city established a Casino Revenues Fund, expected to net about $3.3 million annually.

With the first payments from the casino, the council approved two sets of projects that included parking lot paving, lighting and other improvements for recreational trails, sports fields and other projects. Lanzotti said the way the city has spent the money so far is a perfect fit, since the revenue stream isn't considered steady enough by lenders to pay back bonds on large-scale projects such as a police station.

Summers has said he understands bondable projects can't be paid for through casino revenue, but he wants them considered when looking at the environment and infrastructure projects. When the city reviewed its 5-year capital improvements plan in February, staff recommended starting a savings fund for a new police station with revenue the casino generates from 2013 to 2018.

Other projects

A police station, while the main talk of the council, isn't the only project to consider -- there are proposed tourism and recreational projects.

Mayor Harry Rediger said the council received one proposal from the Cape Girardeau Historic Preservation commission and will discuss it at the next meeting.

The commission would like to see the 1 percent restaurant tax kept in place to fund "heritage tourism" in the city. The commission claims heritage tourism is the reason visitors, who generate a large chunk of the restaurant and hotel/motel tax, come to Cape Girardeau, so the revenue should be invested "in the very thing that brings them here in the first place," the proposal states.

Projects included in the commission's proposal are a visitor center that would maintain regular hours and house the convention and visitors bureau; heritage tourism grants that would fund events or provide seed money for businesses or organizations; creating an events coordinator and guide position to plan and run events and provide interpretative services in historical locations such as the Red House and Old Lorimier Cemetery; facade improvement grants; preserving city-owned historic properties; studies on the re-use of historic city-owned properties; support for the downtown revitalization organization Old Town Cape; and adding interpretive signs for historic buildings and sites.

Estimated revenue from the restaurant tax needed for the commission's plan is estimated at $1.16 million a year, or $5.8 million over five years.

The other proposal, for an indoor sports complex and a waterslide, comes from Joel Niekirk, president of MidAmerica Hotels Corp.

Niekirk proposed an indoor sports complex inside vacant space at West Park Mall and a large double water slide at Cape Splash. Funding, according to the proposal, would require the restaurant tax to be renewed by voters, with a three-year sunset clause.

Neikirk said in the proposal the two projects will "have a direct impact on the city's ability to attract new visitors to the community, as well as enhance the quality of life for those who live in the area."

The indoor sports complex would be built in the former Venture store at the mall and managed by Vetta Sports, which organizes sports camps, training, leagues and tournaments in Missouri and nearby states. The facility would be 40,000 to 60,000 square feet and include two turf fields, turf space for volleyball courts, hardwood floor space, training and party rooms, offices, restrooms and concession stands. Indoor soccer, volleyball, basketball, flag football and other sports would be a draw during the winter months, according to the proposal, a time when more visitor traffic is needed.

The water slide at Cape Splash would fulfill "family and recreational needs for a full day at a reasonable price."

The proposal cites the Shawnee Sports Complex and Cape Splash as examples of how the new features would improve the community and its economy -- both already are used extensively and produce revenue streams for the city.

If the council approved the proposal, a 10-year extension of the 4 percent hotel/motel tax would appear as a separate ballot item from the half-percent restaurant tax. Excess revenue from the hotel/motel tax would be marked for a future permanent site for the convention and visitors bureau, now situated at 400 Broadway.

Cost of the sports complex is proposed at $2.24 million; the water slide would cost $1.2 million. The restaurant tax would also sunset if it reached $3.5 million in revenue before the three-year period ends.

Regarding Niekirk's proposal, the mayor said city staff and the council had concerns about putting public money in a privately owned facility. Still, Rediger said, the idea remains alive through another possible funding source -- he likes the idea of the indoor sports complex, he said, but would want to see one built separately from the mall.

Niekirk is opposed to the restaurant tax being redirected for public safety because, like Summers, he said "there are other creative ways to fund capital projects in public safety that need to be exhausted."

Niekirk said the economic effects of the restaurant tax on tourism and recreation-related business have helped the area's restaurant and lodging industries expand.

"This tax is not the tax that should be cannibilized to fill those needs," Niekirk said in an email to the Southeast Missourian. "It is too critical to the ongoing growth of our community."

The restaurant tax must end when nearly $9 million in bonds for the River Campus are paid in full, per an agreement between the city and late Cape Girardeau businessman Jim Drury. The bonds are projected to be paid off sometime this fall.

eragan@semissourian.com

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