Tourism leaders breathe easier - East Valley Tribune: Business

Tourism leaders breathe easier

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Posted: Wednesday, June 25, 2003 1:12 am | Updated: 1:26 pm, Thu Oct 6, 2011.

East Valley tourism leaders are cheering a couple of big wins in the Legislature.

The approval of $300 million in state financing for the Phoenix Civic Plaza expansion and the reinstatement of Proposition 302 funds during the 11th hour of the state budget melee were hard-fought victories, said Robert Brinton, executive director of the Mesa Convention & Visitors Bureau.

“It was a great political victory — the Prop. 302 funds,” Brinton said. “Last year the governor (Jane Hull) took half the money and promised it would happen one time only. This year the Legislature wanted to take all the tourism promotion funds. That was major and could have affected funding for years to come.”

Proposition 302 funds were approved by voters two years ago to build a stadium for the Arizona Cardinals, provide tourism marketing money, and help fund Cactus League stadiums and youth sports facilities. The money comes from an increase in bed tax — a charge added to hotel bills — at Maricopa County hotels.

Hoteliers backed the tax increase in expectation of getting a portion of it back in funds to pitch the Valley as a tourism destination, Brinton said. The Proposition 302 amount allocated for tourism for next year is $4.4 million — a tab eyed by the cash-strapped Legislature.

The Legislature previously had proposed stripping the Arizona Office of Tourism of its $9 million budget and merging it with the state’s Department of Commerce. The triple threat caused the usually laid-back hospitality industry, already suffering from the economic downturn and the travel drought after the terrorist attacks of Sept. 11, 2001, to get uncharacteristically aggressive.

Usually competitive hoteliers banded together into mini-gangs, each one charged with becoming a “buddy” to a specific legislator. The political buddies first agreed to keep the tourism agency separate from the Department of Commerce and gave back its $9 million operating budget. But they planned to keep the Proposition 302 money, tossing it into the General Fund. Gov. Janet Napolitano wanted half — just as her predecessor got.

The hoteliers shifted into high gear, prodding lawmakers with written legal opinions insinuating that a lawsuit would be forthcoming if the bed tax funds weren’t used for their voter-approved purpose.

The legislators gave that money back, too — all of it.

“I feel our legal standing was solid, and that helped them understand,” said Debbie Johnson, executive director of the Valley Hotel and Resort Association. “We are grateful that the Legislature and the governor did the right thing.”

Ken McKenzie, general manager of the Tempe Mission Palms Hotel, led the charge to “educate” the lawmakers on the legal implications of what they were about to do.

“It was a team effort,” McKenzie said. “We were just communicating the issues. We’re extremely pleased that the Legislature and the governor decided to make sure voter intentions were upheld.”

McKenzie’s charge also pushed the state funding of half the $600 million tab for tripling the capacity of Phoenix Civic Plaza, the downtown convention center. Phoenix voters had already agreed to ante up $300 million to pay the other half of the project’s cost.

East Valley hoteliers and tourism leaders backed the proposal, which surprised many by teetering into passage.

“We’ve got to be able to compete for major conventions, and (conventiongoers) will spill over opportunities for Mill Avenue retail and sometimes even into Tempe hotel rooms,” said Stephanie Nowack, president of the Tempe Convention & Visitors Bureau. “It will be a huge boost to the overall Valley economy.”

Scottsdale also would benefit from the increase in visitors attending the larger conventions that couldn’t be held in the Valley because of lack of meeting and exhibition space, said Rachel Sacco, president of the Scottsdale Convention & Visitors Bureau.

“A rising tide lifts all boats,” Sacco said. “There is too much parochial thinking. We need to cheer on a project that is good for tourism. What’s good for tourism is good for Scottsdale. Scottsdale will hold its own and fill a niche nobody else can fill.”

While the convention center expansion is expected to generate the need for a third downtown Phoenix hotel in a market that industry experts say has too many hotel rooms already, McKenzie said bigger conventions should bring enough additional people to the Valley to fill up new rooms and those of existing hotels.

Flush with success of fighting for four big points and scoring a win in all, the local lodging industry is likely to hang on to its newfound political clout, McKenzie said. “The buddy system is in place now, and we as an industry will utilize this to move forward on issues that impact our industry, the economy of the Valley and the state,” he said.

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