Council holds off on room tax increase
The Merrill Common Council last Tuesday referred an ordinance seeking an increase in the city’s room tax back to the Committee of the Whole and Tourism Commission.
Mayor Bill Bialecki had asked that the city consider an increase in the room tax to 8% from the current 4%. The proposed increased portion of the room tax would be controlled by the city rather than the Chamber of Commerce, as the current 4% is. The city would use the additional room tax revenue toward new and additional directional signs and business district beautification projects.
The ordinance was referred back to committee at the request of the Tourism Commission, seeking more discussion on the size of the increase and the way the proceeds would be used.
“The Tourism Commission met and requested a joint meeting before the council makes any decision,” said Debbe Kinsey, executive director of the Merrill Area Chamber of Commerce. “There is some concern about doubling the room tax in one giant step. We want to look at how much we’re going to raise it and make sure everybody understands the rules. We want to make sure every penny is utilized for the reason that it’s there.”
State law specifies that at least 70 percent of the room tax revenue must be used for tourism promotion and development projects.
Under the current arrangement, the room tax is divided with most of it going to tourism through the Chamber. Smaller portions go to the Merrill Area Recreation Complex and the city. In 2012, $45,639 was generated by the room tax. Of that, $35,107 was transferred to Merrill Convention & Visitor’s Bureau through the Chamber and, $5,851 went to the MARC and $4,681 was kept by the city.
Under state law, the maximum room tax rate is 8%. In Merrill, the room tax proceeds are forwarded by the Tourism Commission to the Merrill Area Chamber of Commerce, aside from the portions that go to the MARC and the city. The money administered by the Commission goes toward tourism related expenses such as promotional publications, marketing and grants for events.
Kinsey said it’s time to talk about raising the room tax, which has been in place in Merrill for over 20 years. Still, there is a fear that too steep an increase would have travelers looking elsewhere for lodging.
“Maybe the wise thing is to raise it in steps,” she said. “We don’t want any adverse affects. If we don’t have the overnight stays, we’re losing all the money they spend while they’re in town, too.”
On a 5-3 vote, the council approved a development agreement between the city and Gateway North LLC for the construction of an El Mezcal restaurant on East Main Street. The restaurant will be located between AmericInn and the Pine Ridge Mobil station.
The agreement calls for the city to contribute $135,000 toward the project. Of that, $35,000 would go toward stormwater drainage improvements to handle stormwater coming to the site from the north. The city would also pay development incentives to the developer of $20,000 per year over five years.
Mayor Bialecki noted that the city has provided development incentives in the past to projects such as Walgreen’s, Lincoln Community Bank, Caylor’s and Culver’s. The city needs to be proactive, he said, to bring development projects to Merrill.
“I want to help bring this restaurant in and get development going,” Bialecki said.
The project is located within Tax Increment District (TID) 3. Taxes paid on new development in a TID can be used for infrastructure improvements within the TID or in a blighted TID in other parts of the city.
“If we’re going to create TIDs we should be using them,” Bialecki said, “and the money comes from that new development.”
The vacant land where the restaurant will be built is currently valued at $147,100. The projected value of the property after the restaurant is built is $950,000. The taxes to be paid on the restaurant are estimated at $26,805 for 2013. The restaurant is projected to generate $282,277 in taxes through 2025.
Alderpersons Steve Hass, Anne Caylor and Chris Malm cast the dissenting votes on the resolution approving the development incentives.
NTC noise complaints
The council did not act on a petition regarding noise issues at the new NTC Public Safety Center of Excellence on Champagne Street. The council received a petition with 80 signatures of residents in that area of the city, complaining of excessive noise from sirens, squealing tires and loudspeakers during training at the campus.
NTC President Lori Weyers said the college wants to be a good neighbor in Merrill has come up with some potential solutions to the noise issue. She proposed limiting the hours when sirens would be used to 7 a.m.-9 p.m., and also the construction of a sound fence around the Emergency Vehicle Operations Course, from which the objectionable noise emanates. The wall won’t eliminate the noise entirely, but should cut it down substantially, Weyers said. She added that the college’s Board of Trustees will propose postponing a project in Wausau to address the concerns in Merrill.
Following discussion, Council President Steve Hass thanked NTC officials for their efforts in addressing the issues.