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HomeMy WebLinkAbout07082019 City Council Laydown - Carpenter Info on Hotel Tax use uena'ina exceeds expectations despite economy-Anchorage Daily News /g07Q g ANCHORAGE DAILY NEWS Dena'ina exceeds expectations despite economy / Author:Elizabeth Bluemink 0 Updated:September 29,2016 Published October 31,2009 • There's a bright spot in Anchorage's dull economy this year. Roughly 200,000 people --ranging from postmasters and sorority women to Secret Service agents guarding the Palin family during a vice presidential political rally--walked through the doors of the new Dena'ina convention center. It's become a preferred spot in town for big business luncheons and ground zero for huge events like the Alaska Federation of Natives annual convention,which drew more than 4,000 people last month. The Dena'ina center recently ended its first full year of operation in the heart of downtown, and its financial performance so far is confounding the skeptics who on talk radio and in letters to the editor four years ago warned that it could be a disaster. Despite the slow economy--in Alaska and the Lower 48 --the Dena'ina racked up millions of dollars more in sales than expected in its first year. It is stealing some meetings away from the city's older and smaller convention center, the Egan,but not enough to hurt their combined operating budget.As the city predicted, the two centers are operating at a$1 million annual loss that is covered as planned by revenue from hotel-room taxes. At a time when the city government is stuck in a budget crisis,the Dena'ina center isn't.Next year's financial outlook doesn't look too bad, either. That's not what everyone expected. The S 111 million building was controversial for much of the past decade because Anchorage voters worried about footing its bill.After the voters rejected the initial bid to build the center in 2002,city leaders revised their pitch in 2005 --the center would be funded with hotel-room-tax revenue and its own sales. The two revenue streams would cover construction debt and day-to-day operations, and would do so easily even if the tax receipts grew very slowly. Voters changed their minds and approved the project. The Dena'ina was finished on time and on budget last fall, just as the global economy was cratering. NO CANCELLATIONS • tps:/iwww.adn.comieconomy/article/denaina-exceeds-expectations-despite-economy/2009/11/01! 4/S r,cu,y uena ma exceeds expectations despite economy-Anchorage Daily News Visitors to the center occasionally remark that when they attend business meetings there,the block-sized building seems almost vacant. It's a valid concern because many new convention centers around the country have fallen into financial trouble because they don't attract enough traffic. But the new building never was expected to be fully booked in every room, day after day.The Dena'ina met its sales expectations this year despite the slow economy, said Julie Saupe,president of the Anchorage Convention & Visitors Bureau,which oversees the Dena'ina and Egan. The recession didn't prompt any cancellations by national groups that had booked the Dena'ina for large conventions, she said. Fitting with the city's rationale for building it, the Dena'ina hosted at least a dozen large conventions and trade shows this year that were too big for the Egan,built in the 1980s, according to SMG Management, a firm that runs both centers. The recession's main impact on convention sales has been that several meetings at the Dena'ina center netted fewer guests than expected, according to SMG staff. This year,the Dena'ina hosted about 220,000 people for events ranging from local Chamber of Commerce luncheons to the national Alpha Kappa Alpha conference,which brought more than 1,000 sorority members to the city in July and the 4,000 at the AFN convention.The sorority meeting was one of several Dena'ina events that overflowed into the Egan. City tourism officials said they are booking future events --through 2014-- at about the same rate as they did last year, despite the recession. Dena'ina and Egan will generate a combined S95 million-worth of future meetings this year, Saupe said. "The ($95 million) sales goal is one that was set last fall, just as we were seeing the first signs of the global recession.Despite these signals,we did not significantly adjust our goal down and I'm pleased that we will meet, or be very close, to meeting the goal," she said. • POPULAR FOOD? The Dena'ina center is on target to generate S2 million more in sales than the amount projected for this year back in 2005,when the project was put in front of voters. A big component of the center's higher sales is food and beverage receipts.They were nearly$500,000 more than budgeted,mainly due to an uptick in banquets, such as the Alaska statehood gala that fed roughly 1,800 people. The Egan's sales declined in the same period: revenue plummeted from$3.3 million last year to $1.8 million this year.A major reason for the decline is that several local organizations -- including the Anchorage Chamber of tps://www.adn.com/economy/article/denaina-exceeds-expectations-despite-economy/2009/11/01i ',c „< uenama exceeds expectations despite economy-Anchorage Daily News Commerce --moved their weekly lunches from the older center to the Dena'ina, Saupe said. Dena'ina's expenses for this year are expected to be about$1.7 million higher than predicted in 2005, in part because of the citywide increase in heating costs.But unlike the Egan, it generated more money than it cost to operate. The net operating loss for the two centers, at$1.1 million, is about the same as was predicted in 2005. One of the conditions stipulated by voters is that both centers' annual operating losses not exceed $1.6 million. If they top that amount, the ACVB must make up the difference out of its own budget. TAX DECLINE • As required by local voters, the city is paying the construction debt for the S 111 million Dena ina center with revenue from hotel-room taxes. Those taxes also cover operating losses. But a decline in tourism caused local hotel bookings to plunge this year. City financial officers say the city's room tax revenue could slump by 18 percent. Although the tourism decline might raise concern about Dena'ina's debt payments, the center seems to be on solid footing. When it financed the construction with revenue bonds, the city projected that room-tax revenue would more than adequately cover the debt, even if revenue grew only 1 percent per year. Instead,room-tax revenue grew by 21 percent from 2006 to 2008. That has allowed the city to build up a large reserve fund that it can use to supplement tax revenue if the economy worsens, Saupe said. Once Dena'ina's debt is fully paid,whatever money is left in the reserve fund will go back to the city. OPTEVIISM One Friday afternoon last month, the Dena'ina center's exhibit hall bristled with gleaming,new snowmachines, Chevy SUVs, hockey gear and other outdoor gear. Bill Holland, of Crowley Petroleum Distribution,walked into the 15,000-square-foot hall to check on his company's booth,where he planned to hawk Crowley's snowmobile engine oil, called Mystic,to local retailers. The event in the exhibit hall was the second Oxygen and Octane Expo. Last year's expo was the first public trade show held at Dena'ina's exhibit hall.Vendor space sold out last year, and again this year. Booking the exhibit hall is expensive but worth it, said John Woodbury, an expo organizer.He noted that semi- trucks can drive in and out of the exhibit hall,unloading Skidoos,RVs and other heavy items. °I can't do that anywhere else in town; he said. .ps:lrwtiw.adn.cornteconomwarticletdenaina-excperis_PxnA,rari,,.,—+—;,e ., -• • uena'ina exceeds expectations despite economy-Anchorage Daily News Tim Melican, owner of a local limo service called Magic Bus, also sees the center as a boon for his business. His fleet of six vehicles has been busier than usual because of events happening simultaneously at Egan and Dena'ina. "We've done more business than I expected," said Melican. Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317. Video: Tour the convention center before it opened(09/2008 Video:Tour the construction site (05/2008) By ELIZABETH BLUEMINK ebluemink@adn.com About this Author Elizabeth Bluemink • Comments Ds://www.adn.com/economy/article/denaina-exceeds-expectations-despite-economy/2009/11/01/ ..� Property Tax Exemptions - Fiscal Year 2020 (Applicable to 2019 Tax Year) General Fund - 4.70 Mills PELLIJOA ] w Exempted General Exempt General General Exempted Fund &Service Fund Assessed Fund General Fund Area Funds Tax Value($1,000) Count Tax Revenue Revenue MANDATORY EXEMPTIONS $150,000 Senior Citizen $ 711,763 5,165 $ 3,345,286 $ 7,488,272 ANCSA Native 834,909 1,848 3,924,073 8,615,848 Cemetery 1,739 10 8,172 10,449 Charitable 66,510 152 312,597 555,939 Disabled Veteran 51,512 375 242,106 564,766 Electric Cooperative 18,674 110 87,768 159,983 Government 8,088,688 4,812 38,016,831 75,190,433 Hospital 5,251 3 24,680 46,645 Housing Authority 14,086 51 66,206 117,830 Mental Health Trust 114,997 142 540,485 1,363,854 Multi-Purpose Senior Center 4,249 7 19,969 47,185 Native Allotment(BIA) 31,355 262 147,369 305,306 Religious (Real and PPV) 109,722 218 515,694 1,065,791 State Educational 92,039 35 432,581 561,277 University 84,623 189 397,727 818,874 Veterans 2,863 10 13,454 26,802 Total Mandatory Exemptions $ 10,232,979 13,389 $ 48,094,998 $ 96,939,254 OPTIONAL EXEMPTIONS $10,000 Volunteer Firefighter/EMS 413 42 1,941 4,028 $50,000 Homeowner -Borough 520,533 10,905 2,446,507 5,547,286 $100,000 Personal Property 29,034 1,102 136,461 265,596 $150,000 Senior Citizen-Borough Only 405,093 4,066 1,903,935 4,274,313 Community Purpose (Real and PPV) 70,132 185 329,620 664,797 Disabled Veteran-Borough Only 54,982 307 258,417 598,148 River Restoration&Rehabilitation 92 15 431 1,004 Total Optional Exemptions $ 1,080,279 16,622 $ 5,077,312 $ 11,355,172 TOTAL ALL KPB EXEMPTIONS $ 11 313 258 $ 53 172 310 $ 108,294,426 DEFERMENTS Agriculture Deferment - - Conservation Easement Deferment - - Total Deferments - - $ - $ - TAX CREDITS-amt deducted from actual taxes owed. Disabled Resident up to$500 tax credit-Borough Total Tax Credits - $ $ - 47 Tax Exemptions $10,000 Volunteer Firefighter/EMS Provider — Conservation Easement Deferment - To secure this Exempts $10,000 of assessed value of the home of an deferment, the property owner of land subject to a active volunteer firefighter or EMS provider. Maximum conservation easement created under AS 34.17 must of 2 per household allowed. This exemption is also apply annually by May 15th. The Assessor shall recognized by the cities of Soldotna, Seward, Homer maintain records valuing the land for both full and true and Kachemak. value and value subject to the easement. Homeowner - Available to any Borough resident who Disabled Resident - Available to any disabled resident owns their own home and occupies it as their who has been determined to be totally disabled by the permanent place of residence. The exemption is a US Social Security Program or other government maximum of $50,000 assessed value of the home and alternative to Social Security. Qualified applicants the land on which it sits. The cities of Kenai, Soldotna, receive a tax credit up to $500 of borough tax and Seward, and Seldovia do not recognize this exemption; $250 of City of Kenai tax. the City of Homer recognizes a $20,000 exemption. Disabled Veteran - Granted to honorably discharged $100,000 Personal Property — Exempts the first veterans of the US armed forces who have a service $100,000 of personal property owned by a taxpayer, connected disability rating of 50% or more. The State excluding motor vehicles,aircraft and watercraft. exempts up to $150,000 of their total assessment. The borough exempts the remainder. If a disabled veteran $300,000 Senior Citizen - Available to any Borough lives inside city boundaries,the city only recognizes the resident, who is at least 65 years old, owns and exemption to $150,000 value. The amount of occupies their home as their primary residence and exemption is proportional to the veteran's ownership permanent place of abode, and qualifies for a PFD.The and/or use of the property, up to the full value of the State exempts up to $150,000 of their total assessment. property. The Borough exempts an additional $150,000. If a senior citizen lives inside city boundaries, the city only Economic Development Property - Exempts up to recognizes the exemption to $150,000 value. The 50% of the assessed value (general fund levy only) of amount of exemption is proportional to the seniors' property that is used for economic development for 5 ownership and/or use of the property. years (effective FY2020). Agriculture Deferment - Mandated by the State of Electrical Cooperative - Exempts property held by Alaska, this deferment is available to people whose electricity producing cooperatives. farmlands produce a minimum of 10% of their annual income. Qualifying property shall be assessed on the Government - Completely exempts all City, Borough, basis of full and true value for farm use. State, and Federal properties from taxation. ANCSA Native - Exempts property deeded to Alaskan Habitat Protection - Provides tax credits as partial native corporations under the Alaska Native Claims reimbursement for habitat protection and restoration Settlement Act. project expenses to promote the health of designated anadromous waters within the borough. One half of Cemetery - Exempts properties owned by a non-profit the tax on land for 3 years following completion of the entity and used exclusively for cemetery purposes. approved project or until all costs are recovered, whichever comes first. Charitable - Exempts properties owned by non-profit organizations that are used exclusively for charitable Hospital - Exempts properties owned by nonprofit purposes. organizations and used exclusively for hospital purposes. Community Purpose - Exempts property of an organization not organized for business or profit- making purposes and used exclusively for community purposes. 440 • Tax Exemptions Housing Authority - Granted in accordance with rules River Restoration and Rehabilitation —Exempts all or governing the Housing and Urban Development part of the improvement value for 4 years when the Authority and subject to a Cooperation Agreement improvement meets the criteria defined for habitat with the borough. protection and restoration along the river. Mental Health Trust - Exempts Mental Health Trust Educational — Exempts property owned by non-profit property from taxation as a branch of state entities and used exclusively for non-profit educational government, purposes. Multi Purpose Senior Center — Exempts a parcel Vessel Exclusion - Vessels having a homeport location which has a multi-purpose senior center developed outside the Borough, but are brought into the Borough and operated by a nonprofit corporation. solely for lay-up or repair, are not deemed to have established taxable situs. This exclusion does not apply Native Allotment - BIA holds in trust and issues to to city tax. native individuals a restricted deed for homestead purposes, which expressly states that the land is Armed Forces Organization - Exempts property of a inalienable and nontaxable until otherwise provided by non-business organization or its auxiliary composed Congress. entirely of persons with 90 days or more of active service in the armed services of the United States. Religious - Exempts properties owned by non-profit organizations that are used exclusively for non-profit University- Exempts property owned by the University religious purposes. of Alaska as a branch of state government. 441