Cultural community uneasy about Corbett idea to divert hotel/motel money to a new Event Center

Those in cultural arts community here that count on a piece of the city's annual hotel/motel tax revenue expressed a nervousness this morning at a meeting with Mayor Ron Corbett about his idea to divert some of the revenue to help pay for a proposed new downtown Event Center.

Corbett emphasized that the use of some of the hotel/motel tax revenue would not affect the money until, at the soonest, the fiscal year beginning July 1, 2011.

At the meeting at the Carl and Mary Koehler History Center called by Corbett, the mayor noted that the city is asking the Iowa Legislature for permission to let Iowa cities increase the hotel/motel tax rate from the current 7 percent to 9 percent.

Such an increase - which the City Council here would have to put in place and take the fallout from, Corbett noted – would bring in an additional $700,000 in hotel/motel tax revenue to add to the $2.5 million that now comes into the city.

The mayor suggested those in the local cultural community could help City Hall lobby the Iowa Legislature to allow cities to increase the hotel/motel tax.

Even so, under one plan, the city might need $1.1 million in the revenue each year for 20 years to pay off bonds to help with a required local match of dollars for a new Event Center.

Corbett said the Event Center and new hotel rooms being added in the city also likely would generate more hotel/motel tax revenue.

Corbett called his idea for using hotel/motel revenue for the Event Center project a trial balloon for now.

He presented it this week as the City Council and the city await word on a $35-million federal grant for what is a $67-million project to build a new Event Center convention facility next to the U.S. Cellular Center arena and to upgrade the arena. The city already has secured $15 million in state I-JOBS funds for the project.