Visitors will pay a special 2 percent tax when purchasing rooms and other goods at the Drury Plaza Hotel when it opens after extensive renovations. That money will be channeled to developers to pay for renovations at the hotel.
Wichita City Council members voted 6-1 Tuesday in favor of allowing the extra tax at the hotel, formerly known as the Broadview Hotel. Council member Jim Skelton opposed it after hearing that the hotel developers wouldn't necessarily need that incentive to complete the project.
The extra tax — collected only inside the hotel's community improvement district — is expected to generate about $2.6 million over 22 years. The tax flows to the state, back to the city and then back to the developers. Developers will use it to help pay for construction of a restaurant, pool and elevated walkway and for other expenses in the hotel.
This is likely the last community improvement district the council will vote on before changing its policy at its Nov. 2 meeting, according to City Manager Robert Layton. Changes probably will require stores inside community improvement districts to disclose the extra tax either through a sign on the front door, a line item on their receipts or on a website that shows every location in the city that charges the special tax.
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Scott Ragatz, general manager of the Drury Plaza Hotel, said that consumers always will be told the total cost of their room and services before they make a purchase in person, on the phone or online. That includes the amount of taxes they pay, but not what portion of that tax is for the community improvement district. He said the hotel could break that out as a special line item if the city wants.
The hotel also has received historic tax credits.
Council member Janet Miller noted the unexpected costs the hotel has encountered in the building and said that she supports some type of signs to tell consumers about the tax.
"I think it's clear that without some incentives we'd have another vacant hotel downtown, which is not a neutral, it's a negative," she said.