Things are moving along with plans for a planned hotel tax increase in Frederick County — even as a bill is pending in Annapolis that would keep the rate where it is.
On Sunday evening, Frederick County Council President Bud Otis sent a letter to John Fieseler, executive director of the Tourism Council of Frederick County, asking that the council agree that an increase in the hotel tax from 3 percent to 5 percent would lead to the formation of a grant program to benefit conference or exhibit halls.
The pitch is pretty close to an amendment to the tax cap bill that was introduced by Delegate Karen Lewis Young and rejected by a majority of the county’s General Assembly delegation earlier this session.
According to the email, sent by Otis “on behalf of the Frederick County Council,” the grant program would “support the tourism component, including capital expenses, of any conference or exhibit hall space over 20,000 gross square feet recognizing that only a portion of the increase in revenue would be used for this purpose.”
The County Council wanted a commitment from the Tourism Council that all large conference centers or exhibit halls in Frederick County would have the opportunity to qualify for the grants.
“Since all the revenue from any increase in the hotel rental tax would go to the Tourism Council of Frederick County, we want to make sure that any new revenue continues to be spent to promote Frederick County and enhance economic development in a fair and equitable manner,” the letter stated.
The County Council got that commitment.
Within 24 hours, the council received a letter from the Tourism Council that confirmed that any new revenue from a hotel tax increase would be used to establish a “Tourism Infrastructure Development Fund.”
The Tourism Council said it has had a position statement on the issue since 2010, reaffirmed in 2014. It says that the infrastructure fund remains “to be defined, but there are examples around the world. Uses such as financing a needed amenity (as identified by market studies), to include an upscale full service hotel, are done elsewhere. The parameters would have to be determined to provide alternative uses if a hotel is not built.”
The letters were not exchanged without controversy, though.
Councilmen Kirby Delauter and Billy Shreve sent their own letter to the tourism office.
In short, it said, “Please let it be known that Council Members Billy Shreve and Kirby Delauter are not in agreement” with Otis’ letter.
“Kirby and I were like, absolutely not, we don’t support that,” Shreve said later in the week. He said the original letter gave the false impression the entire council agreed with it.
Shreve said he wishes letters from the council would spell out a vote on the issue, or have a signature line for each member to properly show support.
Also this week, Shreve is facing questions about his apparent former support for a downtown hotel and conference center proposal that also contemplated city, county and state tax-increment financing bonds.
The Board of County Commissioners, which included Shreve and Delauter, voted unanimously on Sept. 25, 2014, to support a joint resolution with the city of Frederick in favor of the project.
Shreve said he had an incomplete picture of the project’s budget at the time. “The funding sources were not put together back then,” he said.