DE Turf sets public forum to discuss Kent’s proposed lodging tax

WOODSIDE — The DE Turf sports complex leadership will hold a public forum next Thursday to discuss the proposed Kent County lodging tax from which the complex stands to benefit.

The forum will start at 6 p.m. in the Polytech High School Auditorium on 823 Walnut Shade Road in Woodside. A flier circulated by DE Turf reads:

“The DE Turf sports complex welcomes the public to attend an open forum to learn more about the sports complex, the proposed lodging tax in Kent County and to address any questions or concerns.”

Bonnie Ingram Grubb, DE Turf’s executive assistant, said on Wednesday that the public would be able to comment or ask questions during the forum, but suggested notifying her if they wished to speak by emailing her at bonnie@deturf.com.

The flier notes that “speakers will have 1-2 minutes max.”
Proposed tax
A slew of enabling legislation allowing several counties and municipalities to impose their own lodging taxes on hotels and motels passed through the General Assembly late in the legislative session in June.

Georgetown, Seaford, Millville and Rehoboth Beach are among six municipalities granted authority by the General Assembly this year to impose a 3 percent lodging tax hike, in addition to the existing 8 percent state accommodations tax. City of Dover and Delaware City are the other municipalities.

State legislation also empowered Sussex and Kent counties to enact an additional 3 percent lodging tax on hotels, motels and tourist homes in their jurisdictions. New Castle County already had the authority.

However, the legislation enabling Kent County’s lodging tax is distinct in two ways — if instituted, it will overlap the jurisdictions of towns in the county and the revenue was to be directed to the nonprofit corporation DE Turf, rather than to a county or municipality’s general fund.

The governor signed the enabling legislation in July, but Kent County Levy Court will need to approve an ordinance to create the tax, with a public hearing required as part of the process. As yet, no date has been set for that discussion.

The City of Dover, which gained the ability to impose their own lodging tax of up to 3 percent around the same time, in July tabled a decision on the tax until late September. Some councilmen noted concern about the concept of Kent County’s proposed 3 percent tax overlapping with the city’s — potentially raising the lodging tax on all hotels and motels in the Dover city limits by a combined 6 percent.

While many politicians have been in support of the new lodging taxes, hoteliers expressed surprise when the proposals were first reported. A leader of the Delaware Hotel & Lodging Association initially said its membership regrets that it wasn’t part of the tax-hike discussion and has reservations with the proposal.

The association takes particular exception with DE Turf benefiting from the proposed tax’s revenue. Association treasurer and board member William Sullivan called it “beyond unreasonable.”
“Honestly, this is unheard of,” he said. “Lodging taxes have always gone to the government. The state’s tax has allocations for the beach fund, but to earmark all this revenue to one non-public entity like this? It’s shocking.”

The enabling legislation states that the sports complex could use the revenue for anything from advertising and marketing to expenses and debt service.

A county-wide 3 percent lodging tax would bring in an estimated $950,000 annually — according to DE Turf leadership.
Many Kent County elected officials and DE Turf leadership have tried to justify the new tax by claiming the complex has been a large driver of local tourism since its opening in 2017.

DE Turf officials said in January more than 102,000 people visited the complex in 2018, creating an economic impact of around $31 million. Per the complex, those visitors booked nearly 14,000 hotel or motel rooms last year.

Despite the turf being described as a runaway success, supporters of the tax said the complex needs funds to continue competing in its industry.
Bill Strickland, board chairman of the DE Turf sports complex, said it’s becoming common practice in the travel sports industry to offer financial incentives to attract and keep the large tournaments that contract with them.

“A year ago, we hosted a National Lacrosse Tournament, shortly after the conclusion of that week-long event — that generated $18 million in direct economic impact to the area — they notified us that they were leaving the DE Turf for next year’s event,” Mr. Strickland said in July.

“Even though we’d had a three-year contract, they had to buy themselves out of it. They were relocating their tournament to Richmond, which was offering financial incentives for them to do so.”

However, Mr. Strickland said DE Turf convinced them to stay.
“We were able to buy ourselves some time, get some sponsorships to fill the financial gap between what Richmond was doing and what we would to get them to reconsider, and they stayed with the turf,” he said.

“But our lesson learned was that in order to remain competitive for these significantly larger travel team tournaments, it’s become pay to play.

“In the balance of 2018, we saw a series of situations like that. What we’ve identified is that there are tournaments we were not able to secure because we couldn’t offer the prerequisite or ultimate financial reward to host the tournament.”

Hopes for clarification
Fifth District Kent County Levy Court Commissioner George “Jody” Sweeney said he believes the forum scheduled for next week was partly a response to his recommendation to the sports complex to better explain how the DE Turf operates to residents.

“After news of this lodging tax came out, there were a lot of heated discussions about it and a lot of people seemed to be repeating incorrect information, so I got in touch with DE Turf leadership and suggested this,” he said.

Mr. Sweeney himself, at first an outspoken supporter of the proposal initially, hopes for some clarifications.
“The county is a really big supporter of DE Turf and we think they’re bringing a lot of people in from out-of-state, but what I really want to see is their operating budget,” he said. “I want to understand exactly how they intent to use the new revenue.”

Mr. Sweeney says the original impression he’d gotten was that the DE Turf would use revenue from the new tax strictly to attract bigger tournaments that would attract larger numbers of visitors — ultimately supporting the local tourism industry. However, the potential uses outlined in the enabling legislation passed by state lawmakers — such as servicing debt — concern him.

“I think anyone with an interest in this should come out next Thursday and get some answers directly from DE Turf,” said Mr. Sweeney. “There’s still a way to go for the county on this and there will have to be public hearings before we pass anything, so it’s best if everyone gets informed.”

Staff writer Ian Gronau can be reached at 741-8272 or igronau@newszap.com

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