Group formed to oppose guest tax use for proposed Ambassador Hotel
08/27/2013 9:38 AM
08/05/2014 5:54 PM
Several activists who are opposed to using tax proceeds to help fund development of a downtown hotel have taken on a new name to campaign against the move.
The group, led by long-time libertarian blogger Bob Weeks, is calling itself Tax Fairness for All Wichitans. The election on Feb. 28 will determine whether developers of the Ambassador Hotel project at Douglas and Broadway can keep 75 percent in transient guest tax over 15 years, about $2.25 million.
The hotel, which is already under construction, is planned as a upscale hotel in the former Union National Bank.
The $22.5 million project is largely funded by tax incentives, credits and subsidies. Most of these breaks come from tax income that wouldn’t exist without the construction of the hotel. The financing plan was approved by Wichita City Council.
The law only allows a public challenge on the use of the guest tax. Weeks and others led an effort to gather more than 2,700 signatures on a petition to force the public vote.
At Thursday’s announcement, Weeks laid out several reasons for opposing the hotel tax. The most basic was the idea that taxes shouldn’t be used to help companies.
“We believe that taxation is a public function and not to be used for private gain,” he said.
He disagreed with a common argument made by proponents of public-private projects: that the tax money used to build the hotel was generated by the hotel, that the hotel would pay for itself if it didn’t have to pay taxes.
That’s unfair to the city’s other hotels, which don’t get to keep the guest tax, he said. These hotels may lose business to the new tax-subsidized hotel.
“Think what other hotels would do if they could keep 75 percent of their guest tax,” he said.
Developer Paul Coury rejected Weeks’ argument that using the guest tax was unfair.
“That’s a complete misstatement,” he said. “It’s been used as an economic development tool for a long time.”
Three other downtown hotels have used similar financing, he said.
If the developers lose the vote, he said, the hotel project will go on, but they’ll have to find the money somewhere. One place, he said, is fewer jobs and lower salaries.
“It’s almost like cutting your staff before you open,” he said.