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Parks officials eye hotel tax dollars for underfunded capital projects

Tuesday, May 9, 2017 by Chad Swiatecki

With changes expected in how Austin allocates its fast-growing pool of tax money generated from local hotel and motel stays, the city’s Parks and Recreation Department has put forward the first version of its wish list for expensive infrastructure projects.

On Thursday, City Council approved the transfer of nearly $1 million of Hotel Occupancy Tax revenue to the capital improvement budget for the Parks and Recreation Department. The transfer – $993,841 to fund work at four parks sites – was completed by doing a bit of a tap dance around existing city and state laws that restrict the way HOT money can be used.

While the work at Oakwood Cemetery’s chapel, the O. Henry Museum, the Elisabet Ney Museum and the Historic Mayfield Cottage and Gardens would normally fall under the historic preservation projects allowed in the state law governing the tax, city rules restrict some or all of those projects because of regulatory wording that many city officials have said needs to be changed.

The four projects in question were approved because they were found to be “located in the immediate vicinity” of the Austin Convention Center, improvements and maintenance of which are also allowable uses of HOT money. While the O. Henry Museum and Oakwood Cemetery are within two miles of the convention center, Mayfield Cottage and Gardens (five miles distant) and Elisabet Ney Museum (four miles) are far enough away to exceed most reasonable definitions of “immediate vicinity.”

In a backup document for the transfer, Parks and Recreation Department officials state that the department’s 300 sites are suffering from a lack of reinvestment even though parks sites such as Zilker Park are major magnets for tourists each year.

“While the promotion of amenities paid for by Austin taxpayers is beneficial in attracting tourists, the funds generated from Hotel Occupancy Tax (HOT) are rarely reinvested directly back into the park system,” the document’s executive summary states. “PARD has worked carefully to find uses that fit within the state law and welcomes the opportunity to directly utilize HOT funding for appropriate capital and marketing purposes.”

After detailing the work to be completed at each of the four sites – including costs and timelines and how the HOT revenue will allow the department to redirect money from a 2012 bond election – the PARD Spending Plan and Horizon Issues document looks to other capital projects that could utilize the tax money in coming years.

Those projects include a $3 million to $4.5 million bathhouse rehabilitation at Barton Springs and a dozen sites with projects for which budgets have not yet been determined. Those sites include Zilker Park, Elisabet Ney Museum, O. Henry Museum, Mayfield Cottage and Gardens, Old Bakery and Emporium, the city’s historic cemeteries, Pease Park, the downtown public squares, Umlauf Sculpture Garden, Norwood Park Foundation and the Waller Creek Conservancy.

“For the first time, PARD has received HOT revenue directly, which will allow us to promote our assets through the production of a brochure promoting PARD sites and will support multiple historic preservation projects,” the document states. “Going forward, PARD has identified a number of horizon projects that would be excellent candidates for HOT funding.”

During discussion on the transfer at last week’s Council meeting Mayor Pro Tem Kathie Tovo said she supports looking for new ways to spend HOT revenue to address renovation and economic development projects that are in need of funding.

“I hope we can continue to use our hotel/motel tax in just this way, to fund our critical needs in the city of Austin as well as using hotel/motel taxes for some of the other purposes for which it’s been used in the past: cultural arts and the funding of the Austin Convention and Visitors Bureau,” she said. “As we move into budget (sessions) we should be looking not just at parks and recreation needs, but also at some of the other needs we have. For example the Red River Cultural District and some of the other projects that have been pending, for lack of funding.”

The landscape of how hotel tax money can be spent is expected to shift soon, with the city’s Visitor Impact Task Force approaching its deadline to deliver recommendations on HOT money allocation. Also, a pair of bills still under consideration in the state legislature could lift the limits on the categories – event and convention centers, tourism promotion and cultural arts programs – where the money can be legally spent.

The brokering by parks and culture proponents come as Visit Austin – the organization until recently known as the Austin Convention and Visitors Bureau – is mounting an effort to build support for a proposed expansion of the Austin Convention Center, with a HOT-funded price tag ranging from $200 million to just over $600 million.

Photo by Larry D. Moore [CC BY-SA 3.0 or GFDL], via Wikimedia Commons.

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