GREENFIELD — Guests of local hotels could help foot the bill for constructing a new fairgrounds and exposition center on vacant farmland just east of Greenfield.
Hancock County officials are considering raising the community’s innkeeper’s tax from the current 4 percent to 5 percent. That could generate $70,000 to $75,000 a year for what proponents say is a destination that will attract tourists.
But several local hotel owners are not happy, arguing the increase will harm their competitive advantage of having one of the lowest tax rates in the state.
The idea was pitched this week at a meeting of the Hancock County Tourism Commission, the government branch that oversees more than $300,000 of annual revenue generated by area hotels and inns.
“We want to promote things where people stay overnight,” said member Rosalie Richardson, who presented the idea to her group. “I was really mixed (about the tax increase) in the beginning. (But) I don’t see much other way to get monies for the fairgrounds, and it would be, I think, a tourism attraction if there could be year-round shows.”
Richardson explained that the idea had been brewing among proponents of a new fairgrounds and exposition center. Several were in the audience, and Hancock County Council member Kent Fisk said it would be just one of several ways to raise money for the concept.
In November, plans were unveiled to more than double the size of Hancock County’s fairgrounds with an exposition center, grand gazebo, covered arenas, rental barns, and even the possibility of a restaurant, inn or small winery.
A newly formed nonprofit board has been discussing the concept with county commissioners, the group that would sign off on using county-owned land for the project.
Cost estimates have not been released, but construction is expected to be a multimillion-dollar project. Proponents say they are considering several fundraising options, including asking for corporate sponsors.
Still, looking to public money has been the elephant in the room, and some county officials have asked whether a bond would have to be debated eventually.
The innkeeper’s tax, established in Hancock County in 2001, is a 4 percent tax on hotel rooms in the county. In 2014, the tax generated more than $337,000; about half of that went to the Hancock County Visitors Bureau, which runs the H.J. Ricks Centre for the Arts, prints promotional materials and pays the salary of a director.
The other half went to various nonprofit or community agencies that hold events in the county.
An increase in the tax to 5 percent, the maximum as allowed by state law unless special permission is granted by the Legislature, would bring in between $70,000 and $75,000 more a year.
But several owners of area hotels oppose the idea and say the tourism commission’s current revenue stream isn’t being used properly.
“If it truly was all going to go toward tourism, you’d have a hard point arguing that. But I’ve seen money go toward things that aren’t tourism-based,” said Jim Nolte, owner of the Ivy House Bed and Breakfast in Fortville.
Nolte said while a new fairground might attract visitors, they probably wouldn’t stay at his inn because the Greenfield attraction would be too far away. Besides, Nolte said, a 5 percent tax would lose the county’s competitive edge, since the current 4 percent rate is comparatively low.
There are 73 counties in the state that have an innkeeper’s tax, according to the Indiana Department of Revenue. More than three-quarters of them are set at 5 percent.
There are six counties that have a rate higher than 5 percent, and Hancock is among eight counties that have a 4 percent tax. Nearly every county surrounding Hancock has a 5 percent or higher tax rate.
Mohan Reddy, owner of Greenfield’s Holiday Inn Express, said the county’s tourism commission doesn’t do enough to communicate with hotel owners on how current funds are being used. He worries about what an increased rate would mean for his business.
“It’s easy for anybody to say, ‘OK, raise the tax,’” Reddy said. “But raising a tax is not that simple. When you raise a tax, the hotel down the street is at a lower price than ours. What happens? You lose occupants, and the town loses revenue.”
John Dodrill, owner of Super 8 in Greenfield, has opposed the innkeeper’s tax for years and doesn’t believe it should be spent on the Ricks.
Dodrill said while he’d like the tax to be completely eliminated, another option would be to use all of the current revenues toward something like a new fairgrounds that would attract visitors. Dodrill opposes a tax hike.
But Richardson said if current funds are used, it would crimp what the tourism commission currently contributes to in the community.
Richardson said for the most part, commission members agreed a new fairgrounds would bring visitors to the community. A proposed outdoor amphitheater, for example, could hold up to 6,000 people for concerts. The proposed exposition center could be divided to hold multiple events or expositions at once.
But the tourism commission held off on making a decision. Ultimately, it would be up to the Hancock County Council to raise the innkeeper’s tax, but Fisk said proponents of the fairgrounds would like to first see the tourism commission commit to using the new funds for their project. The tourism commission will discuss the idea again at its March 10 meeting.
The tourism commission already has written a large check for the fairgrounds project: $45,000 was earmarked for the architectural study.
Fisk said $39,200 was used, and the tourism commission agreed this week that the remaining can be used to set up four community informational meetings about the project this spring. The meeting dates have not been set yet, but a consultant from Triad Associates will be on hand to make the presentation and answer questions.
Hancock County officials are considering raising the county’s innkeeper’s tax to generate money for a potential new fairgrounds and exposition center. Ultimately it would have to be approved by the Hancock County Council, but the Hancock County Tourism Commission is being asked now to commit to the idea. The tourism commission’s next meeting is at 5 p.m. March 8 at Greenfield City Hall.
Here’s a look at the concept, by the numbers:
-$70,000-$75,000: estimated annual revenue the tax hike would generate
-$337,373: how much the county’s current, 4 percent innkeeper’s tax generated
-73: number of counties in Indiana that have an innkeeper’s tax
-77 percent: amount of counties that have a 5 percent innkeeper’s tax (56 counties). Hancock County is one of eight that has a 4 percent tax.
-$45,000: amount of money the Hancock County Tourism Commission already has earmarked for the project for architectural renderings and community informational meetings.
Sources: Hancock County Auditor, Indiana Department of Revenue