Ambassador Hotel project regrouping after Wichitans voted down guest tax

It was something less than business as usual Monday for the lead developer of the Ambassador Hotel at Douglas and Broadway.

“I’m still depressed,” Tulsa boutique hotel developer Paul Coury said Monday morning, six days after Wichita voters took away $2.25 million in city guest tax revenues — $132,000 a year — from the project with 61 percent of a referendum vote.

“I mean, in retrospect, I don’t know that we ever had a chance.”

Wichita voters overwhelmingly turned down the guest tax allocation Tuesday in a referendum, plunging the operations side of Coury’s $22.5 million, 117-room hotel into some confusion.

“I mean, it’s a piece of yearly income that you can’t count on,” he said. “The capital side is pretty firm, but it’s the operations side that we’ll have to tweak.”

Coury said the hotel group has not settled on any specific cuts. But he said earlier this year that room rates, employee salaries and room amenities could be affected by the loss of the guest tax revenue.

“I’m not sure we’re really going to know much until we get the hotel going and operating,” he said.

Coury, and city officials, are second-guessing the aggressive campaign the Vote Yes group ran, with television, radio, print and Internet advertising.

“I don’t know about the campaign we ran. It might have been better to scale the whole thing back and just run a simpler campaign,” he said. “It got to the point that I wonder if we weren’t just throwing fuel on the fire of the people who were opposed to the tax.”

Wichita Mayor Carl Brewer and local attorney Tom Docking, chairman of the Wichita Downtown Development Corp., disagreed with Coury. They thought the Vote Yes crowd had a chance to prevail.

But upon further review, the vote’s failure may point to some communications issues with downtown revitalization, the city officials admitted.

“You have to always be educating people,” Brewer said. “You have to grab something that resonates with people, like (the other side’s) claims of no taxes for police and teachers. That resonated real well, especially with the school closing stuff going on. It wasn’t an issue of whether that’s the truth or not. Most people just don’t understand it all.”

Docking agreed with Brewer.

“It’s understandable that when people think something is an inappropriate tax increase for a limited group of developers, they won’t like it,” Docking said. “Here, we were segregating a portion of the transient guest taxes and we weren’t imposing new taxes on anybody, but a lot of people thought we were. ...

“The job falls to those of us on this side to explain ourselves. We clearly didn’t get enough of our message out.”

Brewer said that unless all Wichitans clearly understand the city’s revitalization goals downtown, the Project Downtown communications effort is failing.

“We have to make sure that everyone understands what the plan is, from the CEO to Mr. Jones to the high school student,” the mayor said. “If you ask them a question about the plan and they can’t give you the answer, you haven’t done enough communicating and educating. We’ve done a bunch, but we still need more. You can never do enough.”

It’s less clear about the future of the guest tax as an incentive for downtown hotel development. Last week, city officials pledged they’d use it again if appropriate for a downtown hotel. But at the same time, Ambassador supporters wondered whether the guest tax should be discarded, to give future downtown hotel developers the certainty they won’t be challenged politically.

“What is clear, though, is that if a developer comes forward with a hotel proposal that utilizes this tool (the guest tax), they’ve got their work cut out for them,” Docking said.

This story was originally published March 5, 2012 at 5:00 AM with the headline "Ambassador Hotel project regrouping after Wichitans voted down guest tax."