Restaurant tax: CVB backs off most recent requests on restaurant tax

January 25, 2018 10:51:34 AM

Zack Plair - [email protected]


Following fierce pushback from city officials, a few Columbus-Lowndes Convention and Visitors Bureau leaders appear to be backing off their proposed revisions to an inter-local agreement involving 2-percent restaurant sales tax funds. 


Two CVB board members -- Whirllie Byrd and Chairman Dewitt Hicks -- as well as Executive Director Nancy Carpenter indicated to The Dispatch Wednesday they would support the city's proposal without revisions if that is what it takes to save the tax, which is set to expire on June 30 unless the Mississippi Legislature votes to extend it. 


"(Those revisions) are important, but they pale in comparison to the importance of reaching an agreement that will be acceptable to the city and CVB," Hicks told The Dispatch. "It's extremely important to the community for this tax to be renewed." 


On Monday, the CVB board failed to formally approve an inter-local agreement draft the city prepared that would have tasked the tourism promotion organization with giving the city $400,000 per year from the tax money -- $300,000 for baseball field improvements at Propst Park, $50,000 toward the completion of the Sen. Terry Brown Amphitheater on The Island and another $50,000 to be divided between four annual festivals in the city. 


While board members generally agreed on the Propst Park and amphitheater provisions, they voiced concerns over the festival funding because it would increase the combined $40,000 CVB has budgeted for those events by 25 percent. Members also agreed to add two provisions to an "amended" inter-local agreement draft that asked the city to deed over 13,300 square feet (roughly one-third) of the old Gilmer Inn lot downtown to CVB and also allow the organization first rights to market and advertise the amphitheater once it's complete. 


CVB wants the land for an outdoor activity area adjacent to a planned children's museum in the old Elks Lodge. Carpenter said CVB was offering its marketing services at the amphitheater for free, rather than the city hiring a promotional agency for the job. 


CVB did not receive a written copy of the city inter-local draft until less than an hour before it met Monday. 


Still, Byrd criticized Carpenter for not distributing copies for CVB board members to review. 




Mayor: 'Somebody better do something' 


In a scathing letter Mayor Robert Smith emailed to The Dispatch on Wednesday, he criticized the CVB's last-minute "demands." The letter says the city's proposed inter-local agreement is the "last offer" Smith is willing to recommend to the city council. 


"I am exhausted with trying to reason with Nancy Carpenter," Smith said in the letter. 


Once the inter-local agreement was in place, the city council had planned to rescind its resolution to the Legislature to renew the tax and sign on with Lowndes County supervisors for a joint resolution, which state lawmakers have indicated is required to renew the tax. 


City Attorney Jeff Turnage said the Mississippi attorney general must approve the inter-local agreement before it can go into effect -- a process he said could take three to four weeks. The deadline to submit sales tax resolutions to the House and Senate Local and Private committees is March 9. 


"Somebody better do something," Smith told The Dispatch during an interview Wednesday in reference to time running out on renewing the tax. 


The tax collects an extra 2-percent on prepared food and beverage sales at businesses where the gross revenue for those items is at least $325,000 -- though the city, county and CVB have all agreed to request the Legislature apply the renewed tax to all such businesses regardless of revenue. It raised about $2 million in 2017, with 85 percent providing almost all the CVB's budget and 15 percent going to the Golden Triangle Development LINK for economic development. 


If the tax is renewed, both the city and county have agreed to include a fixed $250,000 annually for the LINK. 






In Smith's letter, he claims he and Carpenter had reached a verbal agreement on the terms of the inter-local deal on Jan. 16, six days before the CVB board's latest meeting. 


During those conversations, held by phone with Turnage as a witness, Smith said he agreed to less money than the city originally sought for Propst Park and the amphitheater, figures reflected in a resolution the city council approved in a public meeting later that day. 


The festivals, Smith said, were also part of the discussion with the mayor asking for an additional $15,000 for each of the four events -- Market Street, the Seventh Avenue Heritage Festival, the Southside/Townsend Festival and Juneteenth. However, Smith said they ultimately agreed CVB would provide $12,500 each for those events and the city would cover the remaining $2,500.  


He said the city left those out of its resolution at Carpenter's request since it was strictly a matter between the CVB and city and didn't involve the county. 


Three of those festivals -- Juneteenth, Seventh Avenue and Southside -- were founded by local public officials who are still heavily involved in their planning. Lowndes supervisors Leroy Brooks started Juneteenth, Columbus councilman Gene Taylor and Lowndes supervisor Jeff Smith are involved with the Southside/Townsend event, and state representative and former councilman Kabir Karriem helped start the Seventh Avenue festival. 


Smith said the parties never agreed to the CVB marketing the amphitheater or taking a portion of the old Gilmer property. He said he was willing to sell CVB the entire Gilmer lot at fair market value but not give away or sell just a portion. 


Speaking to The Dispatch Wednesday, Smith said Carpenter should have made her board members aware of the terms long before Monday, when Turnage sent them in writing. 


Still, Smith said the city had tirelessly worked in "good faith" with CVB on a compromise and the offer is still on the table. 


"The only entity that's been constantly giving is the city," Smith said. "You can give and give to the point people think you're going to just keep giving and they will continue to come at you. ... In fairness to the taxpayers, I believe the city has given enough." 


Carpenter admitted to having the Jan. 16 discussions with the mayor but said she only agreed to take the proposals to the CVB board. Further, she said she didn't feel comfortable even doing that until she had the terms in writing. 


"I try not to communicate everything I've heard without having it in writing," she said. 


Carpenter also told The Dispatch she believes something simple is being made "difficult and mean-spirited," adding she is fine with relenting on the Gilmer property and amphitheater marketing requests. She said it would be "simple-minded" to allow the tax to expire over an extra $10,000 for festivals, too. 


"I am sorry the mayor feels the way he does," she said. "I am not an unreasonable person. ... I think we are all tired and we're all frustrated, but I feel we're close." 






The months long struggle over the restaurant tax began when the city and county disagreed over money distribution. The county wanted to divide the funds only between the CVB and LINK, while the city requested $400,000 for recreation and $100,000 annually for the amphitheater. 


Initially, LINK CEO Joe Max Higgins tried to intervene, offering a compromise that would give the city and LINK everything it wanted, along with an additional $400,000 for the county's recreation department. It would have left CVB with less than $1 million per year, about half its existing budget. 


Smith rejected the idea on the grounds he didn't believe the county should get Parks money from the tax. He told The Dispatch he wished he had acted differently. 


"If I had that to do over again, I'd say 'Yes sir. Where's the paperwork?,'" he said. 




Where Restaurant tax negotiations stand 


The city and CVB have agreed in principal that CVB will distribute to the city annually: 


■ $300,000 for Propst Park baseball field improvements; and 


■ $50,000 toward completing the Sen. Terry Brown Amphitheater completion. 




Three unsettled negotiating points: 


■ a $60,0000 annual appropriation to be split among four festivals -- Market Street, Seventh Avenue Heritage Festival, Juneteenth and Southside/Townsend -- with CVB providing $50,000 each year and the city providing $10,000; 


■ the city deeding 13,300 square feet of the old Gilmer Inn lot downtown to CVB for an outdoor activity area adjacent to a planned children's museum; and 


■ allowing CVB first rights to market and advertise the amphitheater. 




The city and county have agreed: 


■ to remove the $325,000 floor on the restaurant tax and require all prepared food and beverage sales be taxed; 


■ keep the CVB board makeup the same -- with four members each appointed by the Columbus City council or Lowndes County Board of Supervisors and the ninth member appointed jointly by the mayor and supervisors board president; 


■ to remove restaurant, hotel/motel and historic home from CVB board membership and make all members at-large; and 


■ to appropriate $250,000 to the Golden Triangle Development LINK each year from the tax. 




Once the CVB and city come to terms on an inter-local agreement, the city has agreed to sign on with the county for a joint resolution to renew the tax, which the Mississippi Legislature must approve.

Zack Plair is the managing editor for The Dispatch.