A&P Commission Turns 35

City Panel Considers Giving $1 Million To University

Visitors exit the Fayetteville Town Center on Friday on the Fayetteville square.

Visitors exit the Fayetteville Town Center on Friday on the Fayetteville square.

Sunday, December 9, 2012

— The Advertising and Promotion Commission has been using hospitality tax dollars to draw visitors to town for more than three decades.

Commissioners will celebrate 35 years of helping to pay for festivals and convention centers following a meeting Monday where they’ll consider giving $1 million to the University of Arkansas to help build a concert hall on campus.

By The Numbers

Hotel-Restaurant Tax

• 2 percent: The city’s hotel, motel and restaurant tax rate. Half the tax goes to the Advertising and Promotion Commission. The other half goes to the Parks and Recreation Department.

• 72: Number of people who have served on the A&P Commission since 1977.

• $145,328: Amount given to 22 event organizers and nonprofit groups last month.

• $6.95 million: Amount of a 1998 bond issue that helped build the Fayetteville Town Center. City officials also committed approximately $450,000 in sales tax to the project.

• $35 million: Hotel, motel and restaurant tax proceeds collected from 1977 through 2011.

Source: Fayetteville Advertising and Promotion Commission

The commission was created in March 1977 when the city Board of Directors decided to tax hotel stays and restaurant purchases. Voters ratified the 1 percent tax later that year.

In its early years, the commission put all of its money toward constructing the university’s Continuing Education Center, a meeting and classroom space on the northeast corner of the square that was built to lure a hotel — now called the Chancellor — to town.

“People think we’re a part of the city,” said Marilyn Heifner, commission executive director. “People think we have this huge tax that we can spend however we want.”

The 1965 Arkansas law that gave cities the ability to levy a hospitality tax requires two members of a city’s governing body to sit on the commission. And while City Council members officially name the commission’s other five members, the commission is a standalone entity, responsible for managing hotel, motel and restaurant taxes. It started without paid employees and now has a full-time staff of 10.

“Our mission is to increase the economic viability of Fayetteville through tourism,” Heifner said.

The commission is the third largest of 34 hospitality tax entities in the state, according to Heifner. About $2.5 million revenue is forecast next year.

Some of the money operates the Clinton House Museum and Fayetteville Visitors Bureau.

Money is given to event organizers and nonprofit groups who are expected to replenish the hospitality tax by putting heads in hotel beds and rear ends in restaurant seats.

Dozens of groups, including the Arkansas Air Museum, Autumnfest and Springfest, the Chili Pepper Cross Country Festival, Fayetteville Roots Festival and Fayetteville Underground, have been recipients of “special funding requests” over the years.

Sizeable chunks have gone to the Botanical Garden of the Ozarks, the Gary Hampton Softball Complex and a trolley that used to wind its way through downtown.

At A Glance

Commission Law

According to state law, four of the A&P Commission’s members must be owners or managers of businesses in the tourism industry; two must be members of the city’s governing body, and one is selected from the public at large.

A&P money can be used to fund the arts; to promote the city; to construct, improve, maintain or operate a convention center; and to pay principal and interest on bonds.

Source: Fayetteville Advertising and Promotion Commission

Voters in 1995 supported an additional 1 percent tax, which goes into the Parks and Recreation Department’s parks development fund.

In the late 1990s, voters elected to extend bonds used to build the Continuing Education Center to pay for the Fayetteville Town Center, a 14,400-square-foot event space used for wedding receptions, fundraisers, lectures, conventions and corporate meetings.

Joe Fennell, who owns Bordinos and Jose’s Mexican Restaurant and Cantina on Dickson Street and was chairman of the commission at the time, said the commission had been too focused on handing out one-time funding to various groups and was falling behind Springdale and Benton County in terms of providing meeting space.

“We just all felt like (the Town Center) was a great way to spend that money and to keep us competitive with our neighbors to the north,” Fennell said.

Bruce Dunn, owner of All Sports Productions, has received A&P money for several races he organizes, including the Fayetteville Half Marathon and Joe Martin Stage Race. In the late 1990s, Dunn led a committee that advocated for hospitality tax backed bonds that paid for the lion’s share of Town Center.

He said the Town Center revitalized the square and helped bring retail, residential and office space to the area.

“Obviously, as a small business owner, having more taxes is not something I’m in favor of,” Dunn said. “But I believe the Advertising and Promotion and Convention and Visitors Bureau tax is ... the most positive use of funds that you could have.”

Fennell said he doesn’t think the 2 percent tax has kept customers away from his restaurants.

“I just think it’s another way you can generate some income without always going back to the property owners,” he said.

According to Heifner, who has worked for the commission since 1993, about $2 million debt remains on the Town Center. She expects it to be paid off in 2015.

Heifner said she feels fortunate to have a job promoting Fayetteville.

“There’s just a mystique here,” she said. “When you’re in college, you create great memories here, so you want to come back and revisit those memories.

“Aside from that and aside from the beauty of the city ... all of those things go together to make a very unique, special place. I don’t think you can put your finger on just what it is. I think people just go, ‘Wow. There’s something special here.’”