Council: Shelve conference center idea for now

Several council members ask if there’s better use for lodging tax fund

After last week’s vote by the Jefferson City Council to reject two proposals for a proposed conference center, some council members are questioning whether there isn’t a better use for the lodging tax funds.

At a council meeting last week, members voted 9-1 to reject conference center proposals from the Jefferson City-based Farmer Holding Co. and the Hannibal-based Ehrhardt Hospitality Group. Fourth Ward Councilwoman Carrie Tergin was the sole opposing vote. But after nearly two years of work on the process, where does the city go in terms of a conference center and the dedicated lodging tax funds?

Second Ward Councilman J. Rick Mihalevich said the council needs to step back for now and see what the public expects from the use of the lodging tax. Mihalevich said it was always clear to him that the 4 percent lodging tax increase, approved by voters in February 2011, was marketed as a means to construct a conference center, though the ballot language stated the money would be used for the promotion of tourism.

“Until I’m convinced otherwise, I always thought it was for the conference center,” Mihalevich said. “I’m open to any new use of those funds that would promote tourism … In my mind, it’s a conference center. So convince me otherwise.”

Fourth Ward Councilman Carlos Graham said he plans on hosting town hall meetings for 4th Ward residents, which he hopes to start in June, to ask how people believe the lodging tax funds should be spent.

“At this point, I’m just going to engage the constituents of the 4th Ward to see if a conference center is something that we should even be discussing,” Graham said. “Be open to all ideas.”

Graham said for anything to be moved forward, the council needs to engage city residents to find out how best to proceed.

Glen Costales, who will be sworn in as the new 4th Ward councilman later this month, agreed with Graham, saying everybody needs to step back so the council can hear what the public wants.

“I want to hear from the people,” Costales said.

Costales said his idea would be to use the funds for a multipurpose arena, which would allow for concerts, meeting areas and even monster trucks or motor cross events.

“But it’s going to depend on what the voters want, ultimately,” Costales said.

First Ward Councilman Rick Prather said everyone should let the issue rest for now. And later, he said, the city will need to get the opinion of the public on how to proceed. Prather said there is some flexibility on how to use the lodging tax funds, and he’s open to new ideas.

Other council members say the conference center is still the intended use of the lodging tax funds and rejecting the two proposals last week did not kill the concept.

Fifth Ward Councilman Larry Henry said though he’s not sure how long it will be before the concept comes back up for discussion, but the conference center is still needed.

“We obviously want to have, most of us want to have, a conference center,” Henry said. “That’s what the lodging tax is for so we press forward and see what other opportunities present themselves in the future.”

Henry said the council will “need to go back to the drawing board” and figure out exactly what is wanted and needed in a future process. Henry said the council needs to be more clear and detailed up front about what it’s looking for to ensure a clear understanding with potential developers.

Fifth Ward Councilman Ralph Bray said the lodging tax was passed with the understanding that it would pay for a conference center located downtown and that should still be the focus of how those funds are used. Bray said the city is only three years in on collections for the tax and he’s still optimistic about the project.

“I think it’s too soon to abandon that plan,” Bray said.

Instead, he said, the council needs to recognize what should be changed in a future process, taking the lessons from the past two years. Bray said the council should not have asked developers what incentives would be needed, but decide what incentives would be acceptable to the city first. He also said the council should not have opened up the location to anywhere in the city when the lodging tax increase was marketed to voters with a conference center located downtown.

Bray said by figuring out those details and what truly can be afforded by the city, the council can get better results from a future request for proposals.

“I think our patience can be rewarded,” Bray said. “I think this is the beginning of something really great here.”

Mihalevich said when the council decided to solicit proposals, the city should have issued a request for information first, which would could have avoided some of the problems the council had later.

“I think the RFP process was flawed from the beginning,” Mihalevich said. “We had a lot of strikes against us going throughout this process that created some delays.”

Strikes like switching city administrators halfway through the process, he said. The City Council voted to fire former City Administrator Nathan Nickolaus in September. City Attorney Drew Hilpert performed in the interim, with current City Administrator Steve Crowell starting last month.

Mihalevich said the city also had to focus on an unanticipated $1.68 million budget shortfall last year, switching the council’s attention for several months.

“A lot of things happened that really worked against us,” Mihalevich said.

Second Ward Councilman Shawn Schulte said next time, the city simply needs to stick to the RFP process and if initial responses don’t match what was requested, they should be thrown out and the city should issue a new RFP. Schulte said this past process become lengthy and flawed because the council didn’t stick to its original criteria and grade the proposals accordingly.

“I think that was part of the problem,” Schulte said. “We kind of threw that RFP out the window.”

As for now, Schulte said, the whole topic should be put on a shelf. The lodging tax funds are held in a lockbox that collects interest, and Schulte said there’s no harm in letting that interest collect for a while.

“When the time is right … at some future date, it needs to be evaluated,” Schulte said. “In the short term … we need to walk away for a little while.”

First Ward Councilman Jim Branch agreed with Schulte, saying the issue needs to “sit for a while,” so people can detach from the subject a bit.

“It just got way too emotional,” Branch said.

After some time, Branch said the issue can be re-evaluated.

Mayor Eric Struemph, 3rd Ward Councilman Bob Scrivner and 3rd Ward Councilman Ken Hussey did not return calls for comment.

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