Council approves hotel tax hike

City to provide $30-$35 million in tax abatement to new sports complex

click to enlarge Hotel owners in Springfield, like those for the Wyndham Springfield City Centre on the left and the President Abraham Lincoln Springfield DoubleTree by Hilton Hotel on the right, will owe higher taxes due to a city ordinance that passed Sept. 7. - PHOTO BY RACHEL OTWELL
Photo by Rachel Otwell
Hotel owners in Springfield, like those for the Wyndham Springfield City Centre on the left and the President Abraham Lincoln Springfield DoubleTree by Hilton Hotel on the right, will owe higher taxes due to a city ordinance that passed Sept. 7.

All Springfield hotels will see a 1% tax increase under a number of ordinances passed by the Springfield city council last week and effective immediately. As a result, the sports complex planned for the land near Scheels along South MacArthur Boulevard will benefit from an estimated $30 million to $35 million in tax rebates.

The council approved ordinances increasing the city's hotel and motel tax to 8% from 7%, as well as a 2% hotel tax rebate for the planned Legacy Pointe Sports Complex, along with sales and property tax rebates. The sales and property tax rebates will apply to the complex itself, while the 2% tax rebate will be drawn from all Springfield hotel tax revenue. All told, tax abatement for the project is slated to be about 50% of its total cost, said Mayor Jim Langfelder.

The push for an additional sports complex in Springfield began in 2019 after the city requested an analysis from Sports Facilities Advisory, which provided market analysis showing Springfield could support another facility. The resulting studies proposed a project that promises a sprawling new multiuse campus, with basketball, volleyball, baseball and other entertainment and fitness facilities with a $66 million price tag, according to a feasibility study.

City council members Shawn Gregory, Roy Williams Jr. and Joe McMenamin voted "no" on the measure, which passed 6-3. Gregory said he opposed the plan because it failed to incorporate citywide benefits, citing the existing sports facilities on the city's north and east sides which will not see any tax abatement.

"We could've affected three sides of the city," Gregory said. "I believe there was a way we could have helped out existing facilities. We could have spread the wealth more."

Speaking prior to his vote, Williams expressed concerns that the city had not built in assurances that the development's revenues would benefit Springfield Public Schools and that the plan did not benefit all parts of the city.

Ward 8 Ald. Erin Conley argued the incentives inherent in the agreement push the developers to ensure the projects are built within the bounds of Springfield, a factor she said was crucial to her support of the measures.

"The tournaments themselves are going to have to be designed to attract people to our Springfield hotels so [the sports complex] can get their money back, because otherwise the site won't do well," Conley said.

Langfelder said the city's next step is to extend the agreement for a special service area focused on the complex. He said that assurances about the development being placed within the Springfield public school district's taxable area will be included in it.

"This makes Springfield a multi-day stay community," Langfelder said. "That's been one of the nuts that's been hard to crack. When it comes to fruition, it'll put us on a new level."

Local hoteliers seem to be in favor of the ordinance. The Springfield Hotel and Lodging Association (SHLA) spoke out in support, citing the feasibility study in a letter to city council, which found that the sports complex would bring about $25 million in direct economic impact to the city annually.

Darin Dame, acting president of the SHLA and general manager of SpringHill Suites, a hotel near the development site, said the group's goal has always been that all hotels in town will benefit from the arrangement.

"We feel this will be a way to have more revenue that is citywide and will help all the hotels," Dame said. "We look at this [the sports complex] as another engine that's going to fuel the hospitality and restaurant industry."

The move represents a major step forward for the Legacy Pointe area, which has grown slowly in the decade since the city set its sights on building it up. Sporting goods store Scheels and a few other businesses operate in the area. The ambition to have full outlet malls, residential subdivisions and restaurants has fallen short, however.

The city's next step, extending the special service area, is slated to come up for a vote in October.

Contact Kenneth Lowe at klowe@illinoistimes.com.

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