The last piece of the room tax puzzle was placed Thursday when a city commission approved allocating money raised from the tax on hotel rooms to the La Crosse Center renovation and expansion.
The La Crosse Room Tax Commission unanimously approved a new division of room tax dollars that puts 42.2% toward debt service for the La Crosse Center, sends 27% toward the La Crosse County Convention & Visitors Bureau, 17.5% to city of La Crosse tourism development and 13.3% to the La Crosse Center.
The La Crosse Common Council approved raising the room tax rate to 9.5% from 8% last month as part of the compromise developed by Mayor Tim Kabat and LCCVB executive director A.J. Frels.
“I’d love to have other sources of funds we could utilize for putting this project together, but the reality is cities like La Crosse are pretty limited in what we can do in coming up with a resource to build projects like this,” Kabat said. “It really comes down to the property tax levy or something like the room tax.”
Kabat initially proposed raising the room tax possibly as high as 12%, a number that raised concerns about the impact on tourism.
Both Kabat and Frels agreed that no one was really happy, but all parties can live with the result.
“This is what we arrived on and agreed to. It’s time to move forward and work together to bring tourism to the area,” Frels said.
The compromise cuts $78,000 from the LCCVB budget.
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“Everybody’s got skin in the game, and we’re able to generate $1.3 million for debt service,” Kabat said.
The debt service payments are estimated at about $2 million per year.
The city has committed to borrowing $35 million to pay for the renovation and expansion, which is expected to bring the city-owned convention center’s economic impact up to about $45 million annually. The remainder of the funding is coming from a $5 million state grant and La Crosse Center funds.
The approved concept for the project adds a second ballroom to the facility, as well as additional meeting rooms, an atrium and a skywalk connecting two sides of the building on the western side.
There are also plans for a rooftop garden terrace over North Hall and a solar array. The project also includes about $6 million in maintenance.