Council approves pledging innkeepers tax to fund Maple Leaf venue

The Brown County Council voted unanimously last week to pledge innkeepers tax revenue to pay the mortgage of the Maple Leaf Performing Arts Center.

That was the third of three board votes needed to move the project along to the next step.

Before the council voted, council President Dave Critser told the audience twice that income and property taxes would not be used to pay for the venue.

He said this meeting was not a place to debate the merits of the proposed 2,000-seat concert hall. He told audience members they would have 30 seconds to a minute to ask questions after a motion was made to accept the resolution.

“If anyone wants to stand up say, ‘I am for the project,’ then stand up and say, ‘I am for.’ If someone wants to stand up and say, ‘I am against’ they can stand up and say, ‘I am against,’ but this is not a debate tonight on whether this project is good, bad or indifferent. This is just a passing allowing them the money to borrow,” he said.

Supporters of the Maple Leaf applauded when the motion was voted on and approved.

“I think this is a wonderful opportunity to have the tourists — because that’s who’s paying this, the tourists — pay for a property that we’re going to own,” Andy Szkalay said.

Szkalay has owned hotels and has served on the Brown County Convention and Visitors Commission, which is the board that manages innkeepers tax revenue.

Innkeepers tax is a 5-percent tax paid on overnight room rentals in the county.

The resolution reads, in part: “The county hereby pledges innkeepers tax revenues pledged to the county by the Brown County Convention and Visitors Commission together with the net operating revenues generated by the project to the payments under the installment payment contract.”

A request seeking the full text of the resolution was not answered by deadline.

“What it amounts to is, we’re allowing them to do that with their money,” Critser said. “Them” is the convention and visitors commission.

The innkeepers tax would be used as a “backup” revenue source if the Maple Leaf does not bring in enough money to cover the mortgage payments, said Lorren Matthas, with the county’s financial adviser, H.J. Umbaugh & Associates.

Matthas said the bank wants mortgage payments to be made monthly.

Projections that CVC member Barry Herring shared earlier this month show the Maple Leaf making $341,422 in annual net operating income before the $559,000 mortgage payment is made. Herring suggested that extra fees could be added onto the cost of tickets to make up the difference between income and the mortgage, or innkeepers tax could be used.

After 2023, mortgage payments would go up to $733,000 per year.

The county will own the property at the end of the transaction, County Attorney Jake German said.

Concerns

The main concerns that residents have raised lately about this project center on whether property taxpayers could have to pay for the Maple Leaf one day if something would happen to innkeepers tax revenue.

Resident Tim Clark asked if the resolution could be changed to put county taxpayers on the hook if the project runs into “difficulties or the strategy changes.”

Critser said that would require a new resolution to be passed, and county commissioner Diana Biddle said that the county “can’t do a bait-and-switch that way.”

“They can’t choose to add the property taxpayers later,” Matthas said. “They would have had to get it approved now, and they didn’t.”

Resident Paul Nelson asked the council if it would be possible for the CVC resolution to be renegotiated to start paying mortgage payments with property taxes.

“No, they can’t,” Critser said. “You can’t pass something and then turn around and start dumping it on the taxpayers.”

Nelson said that is done to taxpayers “all the time” and that he is against the project because it’s too vague.

“Let’s just say, in three years, this thing goes bottom-up. It still would be here, but it goes bottom-up and Lizton Bank owns it. (Then) we start collecting property tax on it,” Critser said.

“If it goes bottom-up 10 years from now (it’s) the same … situation: The bank owns it and we start collecting property tax. Whenever this is completely done and it’s all paid for and (if) it goes bottom-up, then the county owns a multi-million-dollar piece of property that we can sell or do whatever we want do with it. I see no down side.”

Clark said he would argue with Critser over saying the innkeepers tax is the CVC’s money.

“That’s a county asset to me, not a CVC bucket of money,” Clark said. Because it is a county asset, the public should have been able to give input on how they think the tax money should be spent as far as tourism goes, he said.

“I don’t think we’ve asked people, ‘What’s the best investment option for this revenue?’ I don’t believe that question has been asked. It’s been assumed we’ll do a music venue,” he said.

Clark also questioned if studies had been conducted about managing the music venue to see if it’s viable. CVC members didn’t answer that question.

Clark said it’s not right to have people serving on the CVC who would benefit from the Maple Leaf if it’s a success. All five members of the CVC own or manage lodging establishments.

“Given that inherent conflict of interest, where in the government do you allow to have some objectivity to keep these guys out, to make sure that is objective?” he asked.

Clark said he is neither for nor against the Maple Leaf project, but he would like to see leaders “pause” to get public input.

“At least you have listened, you’ve considered other aspects or perspectives that you may not have realized that were out there and then make a decision,” he said. “At least you’re involving the community and make them part of the process.”

The League of Women Voters offered to moderate a community conversation about the Maple Leaf before the property purchase is final.

As of Nov. 22, League President Julie Winn said a date for that conversation has not been set, and that the ad hoc Maple Leaf committee would look at possible dates for a public forum at their Nov. 27 meeting.

Next steps

In an email Nov. 21, German said the next step for the Maple Leaf project is to form a building corporation.

The building corporation will contract with the CVC to take the innkeepers tax revenue to make the mortgage payment, Herring said.

The county already has one building corporation; it operates the county jail. German said the Brown County Maple Leaf Building Corporation will be modeled after the jail corporation.

The county commissioners will appoint building corporation members, Herring said Nov. 15. A follow-up question to Biddle and German about when those members would be appointed was not answered by press time.

The deadline to close on the purchase of property for the Maple Leaf is Dec. 15.

A tentative agreement with Chuck Snyder has been in place since July to buy 13.472 acres of his farm, behind Brown County Health & Living Community.

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Suzannah Couch grew up in Brown County, reading the Brown County Democrat. A 2013 Franklin College graduate, she covers business, cops/courts, education and arts/entertainment.