ASHEVILLE, N.C. — Buncombe County’s hotel tax has generated $19,758,500 in revenue for the city’s Tourism Product Development Fund.
Since 2001, the fund (supervised by a 9-member committee) comprised largely of hotel managers and tourism and lodging industry appointees, is overseen by the Tourism Development Authority Board. The fund has given away millions to both non-profit and for-profit private projects.
The goal is to expand Asheville’s tourist offerings and generate more overnight hotel stays.
“It’s got to produce room nights,” said Robert Foster, the TPDF Committee’s chairman. “So it’s not already something already serving the customer we have here.”
TPDF funding only goes to capitol projects, meaning bricks and mortar, not promotion or publicity of a project to generate tourists.
In Buncombe County, 11 percent tax is what a visitor pays when they stay at a local hotel. The first 7 percent is sales tax, the remaining 4 percent is a room tax. Three percent goes into tourism promotion for Asheville and 1 percent goes into the TPDF or Tourism Product Development Fund.
Grants awarded include a total of $1.3 million in 2002, 2004 and 2009 to help build the John B. Lewis Soccer complex, a total of $1.5 million in 2007 and 2009 for the Asheville Art Museum and $750,000 in 2003 to help build the Bonsai Pavillion at Asheville’s Arboretum.
“The Bonsai exhibit, if you were here on a weekend or on a busy time of day, you would see that it’s one of the busiest and most popular exhibits that we have here,” said George Briggs, Executive Director of the Arboretum. Briggs helped spearhead the attraction in 2003 that features about 50 Bonsai.
“We were probably at about 100,000 people per year in 2003 and 2004 when this was happening,” Briggs said. “We just passed 500,000 last year.”
In 2013, UNCA was awarded $500,000 to help pay for overhead night lights for the baseball and soccer fields. University officials said the addition would bring in more night games, tournament play, and overnight stays for the Asheville hotel industry.
Figures provided by the university indicate that that has happened. The lighting project was finished in spring 2014. According to UNCA, room nights in the first measured year ending in January of 2015, were 3,041 related to games played at the fields, more than tripling a university spokesman said, the baseline year before the lights were up.
“We look for projects that are more shovel ready,” Stephanie Brown said, Executive Director of Asheville’s Convention and Visitors Bureau. “They have to have a one-to-one funding match that’s already in place. And we hope to see them breaking ground within 18 months of receiving their grant.”
In 2013 the TPDF committee, and TDA Board that ultimately approves grants, awarded $50,000 to help buy the canopy at Pack Square Park. Meghan Rogers, Executive Director of Asheville’s Downtown Association, said by email that the venue has hosted two events since the canopy went in: the Ingles Independence Day Celebration on July 4, 2014, and Easter on the Green on April 4, 2015.
The ADA then did a survey.
“At July 4th, we asked 762 of the 15,000 people two questions, zip code and did you stay in a paid accommodation,” said Rogers. She said the survey showed 11.2% stayed in a hotel, bed breakfast, or other paid accommodation and that 51% of those who came to the event lived in Buncombe County with 79% residing in North Carolina. The survey indicated there were attendees from Atlanta, Charlotte, Raleigh areas as well as Florida, Ohio, South Carolina, Tennessee.
Private business can also apply and receive money from the TPDF. Highland Brewery got $850,000 last year to add, in part, a new rooftop event venue, improve their outdoor venue, and add additional parking for more visitors. No money went to the brewing side of the business.
In 2009, The Orange Peel got a $50,000 grant and the TDA served as guarantor on a $250,000 loan to help the venue expand to more than 1,000 capacity.
“Since we did the build-out, we’ve now gone from 30,000 out of town visitors to about 42,000 out of town every year,” said Pat Whalen, Orange Peel’s owner. “This is obviously a huge increase in use of the hotels and motels which was intended by the TDA.”
Whalen said many name bands with larger followings look for venues that can hold more than 1,000 fans.
In 2012, Navitat Canopy Adventures in Barnardsville received a $500,000 grant to help build three new ziplines as part of their $1.8 million expansion.
“If it were not for the $500,000 we received from the TPDF, we would not have done this project,” said Ken Stamps who owns Navitat with his family.
Stamps is aware there was some controversy when Navitat won the grant, but he said the remaining investment dollars in the project came from the company. He said the TPDF application process is rigorous.
The company, Stamps said, now has proof the investment delivered results in terms of increased visitors who drove a distance to come to the zips and stay overnight around Buncombe County.
In 2013, Navitat reported 17,521 visitors. In 2014, that number grew to 23,626 visitors — a 35 percent increase after the zipline expansion. Stamps also said all guests get an exit survey via email after their visit. Stamps said a survey done by Navitat in 2011 showed over a 12-month period in 2011 that 72 percent of Navitat guests who stayed overnight, stayed in a Buncombe County lodging property.
In 2014-2015, over a 12-month period, Stamps said Navitat showed a bump in that 85 percent of guests stayed in a Buncombe County lodging property.
“It is a destination and that was part of the attractiveness to the TPDF committee that it’s not an hour adventure,” said Stamps. “This is a half-day adventure so that further [motivates] people to stay overnight.”
TPDF committee chair Foster agreed.
“Navitat came with a product that gave us national attention, the longest and tallest zipline in the country,” Foster said. “And it was new room nights in the market.”
According to the legislation enacted to create the TPDF, the committee does have the right to choose both for-profit and non-profit projects they think will draw in more tourists, who’ll stay in hotels and potentially add to the county’s tax base. However, longtime Asheville chef Mark Rosenstein who helped create the TPDF fund and draft the legislation it operates under, said he always had reservations about the money going to for-profit enterprise.
“The argument is, if a privately funded project can stand on its own, why should it have a public partnership?” Rosenstein said. “Obviously, if one business gets a grant and a similar business does not, how do you balance that? I personally steered away from private funding when I was on the TDA just because of this very question. I’m really glad I’m not on this committee now because it is, it’s charged, it’s really charged with what’s fair.”
But Robert Foster who chairs the TPDF committee feels the committee is justified in awarding grants to private enterprise and said the committee carefully reviews and considers every year which projects will potentially draw more overnight hotels stays. He also cites the benefits for the larger community in Asheville.
“These things have created an infrastructure and an image that makes employers like New Belgium want to move here,” Foster said.
One TPDF project that failed was the Asheville Health Adventure. Though the project received more than $1 million from the TPDF fund, the Health Adventure isn’t listed on the TPDF fund’s website.
“Through circumstances that no one anticipated, [the project] did not come to fruition,” said Stephanie Brown. “And they had received a series of grants.”
The grants totaled $1.5 million.
“We began disbursements, that land was purchased,” Brown said.
The project failed during the recession years, but the TPDF Committee and TDA Board learned from the experience. There are now specific benchmarks of building a project must show before TPDF funds are dispersed.
Brown also emphasized that a project can only be considered for a grant if the project shows it has matching funds from other sources besides a potential TPDF grant.
Foster emphasized what applicants should know before applying.
“Be ready to prove your case and be ready to back your numbers,” Foster said. “Be sure you have a tracking method that is solid, that allows us to understand how you’re going to create these new rooms.”
While there remains controversy about money going to for-profit local enterprise, Rosenstein said he feels the fund has done wonderful things to enhance Asheville.
“When you look at the amount of money that’s been re-invested into the community and projects it’s helped,” Rosenstein said. “It’s awesome.”
Applications for the 2015 TPDF grants are due in less than a month on June 3.
Related Links:
Asheville Convention and Visitors Bureau
Buncombe County Tourism Development Authority
Reality Check: Buncombe County Hotel Tax
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