County to consider steering tourist tax money toward Mote aquarium

On Wednesday, the Sarasota County Commission will discuss options for granting an outstanding request for $20 million from Mote Marine Laboratory and Aquarium, which hopes to use public funding to help build a $130 million aquarium project near University Parkway and Interstate 75.

Although multiple commissioners have expressed enthusiasm about offering some financial support for the project — and the commission has already voted to allow Mote to use 12 acres in Nathan Benderson Park — the board has not yet formally taken a vote on the funding request, which Mote made in 2018. In December, the commission directed staff to develop options for generating $20 million for the project.

The agenda for Wednesday’s meeting includes a presentation outlining the funding options county staff produced. In previous discussions, county officials have focused on the tourist development tax as the most likely source of funding for the aquarium project. Because there are no unallocated tourist development tax funds available, staff has outlined two options for reallocating tax money currently slotted for tourism promotion and the arts.

Tourist development funds are generated from a 5% tax on rentals of six months or shorter. The county collected $23.5 million in tourist tax funds in fiscal year 2019. Currently, the funds are distributed as follows: 25-30% to tourism promotion, 24% to beach maintenance, 16-21% toward sports stadiums, 10% toward arts, 10% toward beach renourishment and 10% toward Nathan Benderson Park.

Staff will present two options Wednesday for allocating 5% of annual tourist tax revenues, projected as $1.2 million in fiscal year 2020, toward the Mote project. One would divert 5% of the fund allocated toward promotion to the aquarium instead. The other would combine 3% of the fund dedicated to promotion and 2% of the fund dedicated to the arts for Mote’s use.

In the presentation, county staff outlined a scenario in which the county takes out a 30-year bond to borrow the $20 million Mote is requesting. Staff estimated the bond would carry an annual debt service payment of $1.1 million.

In addition to the tourist development tax, staff also presented information about the use of general fund property tax revenue to pay off a bond. The presentation states the annual millage rate associated with making the annual payments is 0.0165, equivalent to $3.30 in taxes on a property valued at $200,000.

A fight for funds

Ahead of Wednesday’s meeting, the leaders of Visit Sarasota County and the Arts and Cultural Alliance of Sarasota County objected to the prospect of reducing the amount of money dedicated to promotion and the arts.

Virginia Haley, Visit Sarasota’s president and CEO, said she believes Mote is a strong tourism asset for the county, but the lack of unallocated tourist tax funds complicated the question of whether to give the organization significant resources for the aquarium project.

“There’s no available funds anymore in the tourist tax without seriously hurting the promotional efforts for years to come,” Haley said.

The county previously adjusted its tourist tax allocations in 2018, diverting up to 5% of the tax devoted to promotions toward sports stadiums to fund renovations at Ed Smith Stadium. Haley argued reducing the funding for promotional efforts would negatively affect the growth of tourism revenues in the area.

“You’ve increased your supply of hotel rooms by 40%, and you’re decreasing the ability to create new demand,” Haley said, citing recent growth in the hotel sector in Sarasota.  

Haley noted that with other major capital projects funded with tourist tax revenue — Ed Smith Stadium, Nathan Benderson Park and CoolToday Park — the money went toward assets the county owned, even though private entities operate the facilities. Although Mote is currently on a short-term lease to use the Benderson Park land, the county has agreed to sell the aquarium site to Mote for $100 if the project gains the necessary development approvals to move forward.

Jim Shirley, executive director of the Arts and Cultural Alliance, believes local arts organizations have demonstrated their ability to serve as a tourism generator for Sarasota. Shirley said organizations saw the 10% tourist tax allocation as a stable source of funding for the arts on a county level, and he worried the diversion of funds could affect the programming those groups were able to offer.

Shirley acknowledged the potential for increased outside interest in tourist tax funding as organizations such as Mote pursue public support for large capital projects. He thought it was reasonable for the county to consider those requests, but he didn’t think they should move forward at the expense of arts funding.

“Most of the longer-term tourists that come here come because they love the environment and the beauty of Sarasota and because they have access to great, high-quality arts,” Shirley said.

Haley said there was no third-party information available analyzing the effect the new aquarium would have on tourism in the area. She said other communities have a formal evaluation process in place to judge the merits of a request for tourism tax funds. Visit Sarasota has recommended establishing a similar process in Sarasota. In 2018, County Commissioner Charles Hines also expressed interest in such a concept.

“Mote’s a great organization,” Hines said at a commission retreat. “Will that aquarium put heads in beds? I don’t know; it might. … That needs to be part of our discussion, rather than, ‘I like that project; I think it’s good.’”

When it announced plans to build a new aquarium in Nathan Benderson Park, Mote shared economic impact projections that estimated there would be 700,000 visitors in the opening year and $28 million in statewide economic benefit associated with annual operations. In 2018, a county consultant questioned some of Mote’s projections, suggesting the attendance estimates were possibly too high.

Debate and deliberation

At publication time, Mote did not return requests for comment. In December, Mote President and CEO Michael Crosby spoke at a County Commission meeting and asked them to make granting the funding request one of the county’s “highest priorities” for the next year. Commissioners have said Mote has expressed a sense of urgency regarding the pursuit of county funds because the organization believes a commitment from the county could help Mote secure state funding for the project, as well.

In previous interviews with the Sarasota Observer, Crosby said the county funding was essential for completing the five-story, 110,000-square-foot aquarium. Crosby has said the economic impact of the project — and potential partnerships with other community groups, particularly pertaining to education — makes it a sound investment for the county.

“The case for support is so strong,” Crosby said in 2018. “Everybody wants to say yes. All we’ve got to do is sit down and put our heads together.”

The County Commission offered mixed perspectives on the Mote proposal at a December workshop. The board agreed to make working with Mote a top priority but stopped short of endorsing the actual funding request.

Commissioner Nancy Detert said she wanted the county to carefully consider the request and didn't think the commission should commit to granting the full $20 million. Hines also said he wanted to analyze the county's ability to provide the necessary funding and the effects associated with financially supporting the aquarium project.

Commissioners Christian Ziegler, Al Maio and Mike Moran have all expressed optimism about the potential to find a way to offer financial support for Mote.

“If they go out in this community — and frankly, around the globe — and raise $110 million for that facility, I don’t think it’s a stretch for the home community, Sarasota County, to pledge the last $20 million,” Moran said in September 2019.

Wednesday will mark the commission’s first discussion regarding the specifics of how to potentially grant the funding request. Ahead of those deliberations, Haley said she hoped officials would carefully vet the proposal before making a decision rather than letting Mote’s urgency dictate the timing. 

“I think when you are investing a potentially significant amount of public tax dollars, you just can’t let that be driven by a quick answer,” Haley said. “It needs to be done correctly.”