Hermiston RV parks and motels are about to get a new tax. Those who stay at RV parks would pay 50 cents a night more and those who opt for hotel rooms would donate a dollar.
The money would be used to a fund the marketing campaign for Eastern Oregon Trade and Event Center. Apparently, a key part of this effort is potentially hiring the Superlative Group, a Cleveland, Ohio-based company to determine the value of naming rights for the rodeo arena, amphitheater and other facility venues along with other services.
The suggested contract is for $75,000 with a 10 percent or 12 percent commission on all sponsorship sales, depending on the variation accepted.
The Hermiston City Council will take up this proposal at its Monday meeting.
We find the proposal troubling because the EOTEC board continues to be rather closed as to its budget and where it is heading.
The funding subcommittee, headed by Dan Dorran, reported last week that seven more local businesses have signed up to sponsor the facility. This brings the total to 12 business who have signed on, according to the report. The board has been unwilling to name the sponsors or indicate how much money they are willing to ante up.
But, if 12 have already signed on, why does the board need to spend upwards of $100,000 to find a naming sponsor?
It also remains troubling that the chair of the EOTEC board is also the city manager of Hermiston.
Board Chair Ed Brookshier is going to be presenting a tax proposal to his own city council. Will he have the best interest of Hermiston taxpayers in mind? Or, will he be trying to assure the EOTEC goes forward at all costs?
One can hope that the presentation on the new tax will come with hard budget numbers for what it will cost to operate such facilities in the longer term.
Such a budget has not been formally developed or presented, as far as we know.
What will Superlative Group do for its money?
Is EOTEC targeting national companies for naming rights? How much will likely be raised? What are the chances of success? It doesnt seem like we need to spend that kind of money to talk to local companies.
What other services will Superlative Group provide? Is this an ongoing relationship? How much money will be generated by the new tax?
Since this tax will apparently be going to the marketing effort, how will the city and county raise money to build the facility?
Again, how much will it cost to maintain and operate these facilities once they are built? Will more taxes be required?
A funding subcommittee recommended in April that a $31 million facility be built.
Earlier this year, two plans for EOTEC were prepared by Fishel CM.
One had a cost estimate of $31.5 million and includes a 60,000-square- foot covered arena and a 60,000-square-foot event center, as well as facilities for the Umatilla County Fair and Farm-City Pro Rodeo. The second, a $21.4 million plan, also includes fair and rodeo facilities, but reduces the event center to 43,500 square feet and provides only a bare shell for the covered arena.
The April recommendation proposed three target dates: $21 million in funding committed by May 2013; $26 million in funding committed by May 2014, with groundbreaking for the facility scheduled for later that year; $31 million in funding committed by May 2015.
The authority has about $12.8 million in funding and in-kind contributions (land and utility services) in hand.
Where will the extra $18.2 million come from to get to $31 million. Is this the reason to hire a marketing company?
Also in April, Umatilla County Commissioner and EOTEC secretary/treasuer Dennis Doherty said he hoped the city, county and local businesses would help fund a $25,000 budget to run the EOTCE boards basic administrative functions.
At this point, Im just asking for a one-year commitment, he said. This is the first real test of the community support.
Did the local community step up with the $25,000?
Back in March, Doherty, who spoke only for himself and not the three-man board of commissioners, said the center should not be expected to turn an immediate profit.
Few, if any, event centers do, he said. What they do is serve as business and economic development engines.
The county, Doherty said, should consider a minimum financial commitment to the center at least equal to the average support the county has provided the fairgrounds over the past five years. Doherty later estimated that cost could be in the six-figure range.
Brookshier said at the same time that running and maintaining the facility should not mean a local tax hike. He said the city may contribute probably to the tune of 1 to 1.5 percent of the general fund each year to support the center. That amounts to about $60,000.
Before it passes an RV/motel tax, the Hermiston city council should demand some hard answers. Such as, is this a local tax?