CAUTION ON CVB

The Convention and Visitors Bureau wants to move ahead with plans for a new $250,000 building to house its offices in Osage Park. The Cape Girardeau City Council would be well advised to pause and assess motel and restaurant tax revenue before jumping into yet another construction project.

On Monday night the council agreed to spend an additional $1.1 million to finance construction of the Osage Park community center and Shawnee Park sports complex, projects that have been in the planning and development stages for a long time. These are also projects that have had the supports of both the CVB and park advisory boards. To pay for the additional cost of the project, the city plans to issue bonds to be retired from motel and restaurant tax revenue. If all the tax revenue had been earmarked for other projects, the city would have been hard pressed to find an extra $1.1 million to proceed with this project. The $1.1 million includes $225,000 in equipment and furnishings that weren't included in the construction contract.

Even though the CVB building is part of the city budget, the council should make sure that a cushion of motel-restaurant tax revenue remains for contingencies. The tax also is used to pay off bonds for the Show Me Center. And the CVB's budget is funded from this tax source.

The city finished the 1995 fiscal year, which ended June 30, with a $362,000 cash balance in the fund -- $124,000 above projections. But that was before the $1.1 million in additional expense on the park projects surfaced.

Other tourism-related groups also are interested in the motel and restaurant tax revenue. The council must carefully determine the best place to spend these dollars.

The CVB wants better visibility and thinks a free-standing building at Osage Park would offer that. Although it is appears too late to make a change, the question remains: Why wasn't the CVB office space included in the community center being constructed at the same location? It seems like a joint project could have offered a measure of cost-sharing. Indeed, initial plans a few years ago called for including the CVB offices in the community center, but the office space was deleted for cost reasons and because CVB officials wanted a separate building.

The CVB currently rents space in an office building on Mount Auburn Road across from Osage Park. It currently pays about $1,000 a month for rent.

The motel and restaurant tax offers a steady source of revenue for tourism efforts. But it is not an endless source. The tax has a sunset clause, and is set to expire in 2004 when the Show Me Center bonds are paid off. It is expected the city will try to extend the tax, but voters will have agree. If not, the city would have to absorb both the CVB budget and operating costs for a free-standing CVB building as well as the community building and sports complex. The council must consider both current and future demands as it earmarks this important revenue source.