Battle for the bucks

Two Yakima heavyweights in attracting tourists are preparing to battle for what could be more than $5 million.

The Central Washington State Fair and the Yakima Convention Center, backed by hotel owners and the Yakima Valley Visitors and Convention Bureau, each believes its need is most deserving for a special sales tax on hotel and motel stays in the city of Yakima.

Each fears the other may have the inside track for the attention of county commissioners.

Commissioners will decide by Jan. 20 where and in what amounts to spend an extension of the sales tax. Requests must be submitted to county commissioners by noon on Nov. 21.

Other groups, including the Yakima Valley Museum, the McAllister Museum, and others likely also will put in a request.

Commissioners aren't committing to anything yet.

"This money has not been spent in the minds of the commissioners," insisted Commissioner Rand Elliott, who is heading up a committee to consider requests for funding. "We will wait to see what the committee comes up with in terms of recommendations and see if that fits the collective feeling of the commissioners."

The convention center carries the support of the Yakima Valley Lodging Association and the Yakima Visitors and Convention Bureau.

The convention center expansion, estimated at $2.8 million, is part of the Yakima Downtown Futures Initiative. The initiative made streetscape improvements possible along Yakima Avenue that have now been extended to the north-south streets between First Street and Naches Avenue.

John Cooper, chief executive officer and president of the Visitors and Convention Bureau, said the project involves realigning North Eighth Street and adding a covered plaza for outdoor events with a capacity for 500 people and other improvements in the center.

The remainder of the downtown initiative phase includes a pedestrian walkway linking the center and area hotels to downtown.

Robert Utz, general manager of the Hilton Garden Inn and lodging association president, said the convention center expansion better fits the intent of the money. The tax was originally conceived to pay off bonds sold to build the Yakima Valley SunDome.

Those bonds will be paid off next year.

"We definitely support the convention center. It is the most direct thing that generates overnight stays in the region," Utz said. He added the SunDome also should receive consideration for funding.

However, a lodging association paper submitted to the county last week lobbies to limit the funding to the SunDome and not to other buildings on the fairgrounds.

"We would be concerned with any proposals that would add new facilities at the fairgrounds, thereby encumbering the county and taxpayers with increased operational expenses," the one-page letter stated.

That is exactly where the fair association argues its needs are greatest. The exhibition buildings that dot the century-old fairgrounds on South Fair Avenue are in desperate need of renovation; electrical systems, heating and air conditioning and other needs officials estimate will cost up to $15 million.

The fair association contends it lobbied for the extension of the tax and that the fairgrounds improvements were always intended to be the focus.

But the bill that passed expanded the purposes for which the money could be spent beyond Jan. 1, 2009, to include tourism-related facilities.

Also, they say the fairgrounds are owned by the county and no other sources of revenue exist to make improvements.

"We do not get any operating expenses from any outside source. We have been operating on our own and are at a point where it is getting tougher and tougher," said Greg Stewart, fair association president and general manager.

Complicating the picture is a nearly 20-year-old agreement between the county and the fair association that grew out of the SunDome construction. The agreement provides the county will give the fair association 90 percent of the money left over after the annual bond payment is made.

Elliott, however, in a desire to see the most done with the sales tax proceeds, is suggesting the agreement may need to be eliminated from the lease, for which the fair association pays the county $1 per year.

"It would affect other potential recipients. So it is my hope that 90 percent requirement will go away," he said.

That doesn't sit well with the fair association.

Stewart said the tax revenues generated in the early years of the SunDome tax barely covered the bond repayment, leaving nothing for the association.

The extension of the sales tax authorized by the Legislature in 2007 allows the tax to be collected until the end of 2020 as long as the county sells bonds to add facilities. The bonds would need to be paid off by the time the authorization expires.

The money is referred to as a double dip because it allows both the city of Yakima and the county each to collect 2 percent of the sales tax on room rentals within the city. It is the county portion, at least $500,000 per year, that is at issue.

County Treasurer Ilene Thomson said revenues at that level would support a bond issue of up to $5.2 million repayable over the next 13 years.

Because of the bonding requirement, the only use for the money is for construction, Elliott, the county commissioner, said.

That leaves out the hiring of staff or staging events to draw tourists.

Elliott has assembled a committee of representatives of the lodging industry and tourist facilities. Among them are Jake Jundt, a member of the fair association board, and Pat Strosahl of United Builders. The Strosahl family created The Seasons Performance Hall on North Naches Avenue in a building that had been a church.

The lodging representatives are Gary Lukehart, representing the Fairfield Inn and Suites, and Sarah Allen, manager of the Ledgestone Hotel, both on North Fair Avenue.

The committee plans to move quickly to recommend projects to commissioners.

Despite the uncertainty and suspicion that surrounds the pot of sales tax money, Elliott said he intends to have an open and legitimate process to decide on recipients.

"Without presupposing anything, we want to get the biggest bang for the buck. I'm very interested to see who comes forward and who might benefit from the opportunity," he said.

* David Lester can be reached at 577-7674 or dlester@yakimaherald.com.

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