La Crosse Mayor Tim Kabat is in very early conversations about raising the room tax to help offset the cost of a proposed $42 million La Crosse Center renovation and expansion.
Kabat met with a La Crosse County Convention and Visitors Bureau committee Wednesday and sent a letter to La Crosse Common Council members asking them to consider raising the tax on hotel room reservations to 12 percent from the current 8 percent.
“It would allow for visitors and tourists to in essence contribute more to the cost of the Center facility,” Kabat said.
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 La Crosse Common Council will vote Thursday on whether to move forward with a west concept that would add an about 12,000-square-foot ballroom, meeting rooms and increase connectivity. The concept allows a variety of additional options, including more meeting space, a larger exhibition hall and a hallway connecting the two ballrooms.
Should the council approve the concept, Kabat hopes that the stakeholders will take a serious look at what it will take to pay off the debt for the project.
“We’re looking at ways rather than just city tax levy to help pay for that debt service and room tax would be one of them,” Kabat said.
He intends to have a financing plan by this summer and thinks the room tax should be a part of that.
Kabat stressed that the proposal wasn’t formalized yet and he intends to have conversations with a variety of stakeholders, including meeting with the CVB board next week, before introducing any legislation.
“I’m asking folks to think about the potential of room tax as being part of that financing plan,” Kabat said.
Specifically, he’s looking at applying the full increase, which would amount to about $1.3 million to the debt service payments, which are estimated at an average of $2.7 million annually. Currently, the 8 percent room tax is divided about equally between the city, the CVB and the La Crosse Center.
Including room tax funds would be a regional sharing of the costs, Kabat said, and recognize that the entire region, as well as visitors and tourists, benefit from the investment in the convention center.
“I think it’s only fair for city of La Crosse taxpayers that the mayor and the council are looking at every possible way to fund this project without having to raise property taxes,” Kabat said.
The mayor is asking city council members to consider raising the tax on hotel room reservations to 12 percent from the current 8 percent.