Apr 9, 2024 - News

Don't spend Charlotte tourism funds on housing and transit, industry leaders say

Buildings in Uptown

The view outside the Charlotte Convention Center in Uptown. Photo: Alexandria Sands/Axios

North Carolina hospitality leaders want Charlotte's elected officials to stop even thinking about using hotel taxes to pay for "non-tourism" projects like transit.

Why it matters: The Charlotte region has a mounting list of infrastructure and housing needs yet limited finances to keep up with its growth. The booming hospitality revenue bucket could be a resource, some leaders say.

  • But the hotel industry, and now Mayor Vi Lyles, have been quick to shut down the mere suggestion of dipping into tourism funds.

Catch up quick: By law, Mecklenburg County's room occupancy tax revenue is supposed to pay for only tourism-specific projects. Some argue mobility needs — like a light rail — would boost tourism.

What they're saying: Lynn Minges, North Carolina Restaurant and Lodging Association's CEO, warned in a letter to Charlotte City Council Monday that rules on how the tourism tax revenue is spent are not up to broad interpretation.

  • "[I]f local elected officials decide to use it to fund affordable housing and other non-tourism related expenditures, that interpretation will be done by the courts," Minges said.
  • She added that expenses benefiting the entire community and other businesses should not be paid for "on the back of one industry" with targeted taxes.
  • In the letter, Minges urged council to "stay the course" and seek an increase in sales tax to pay for transit and mobility projects.

Mayor Vi Lyles, who was not part of the recent conversation about taxes, was swift to respond to Minges' concerns.

  • "The conversation you referenced in your April 8 letter was just that — a conversation," Lyles wrote back on Tuesday.
  • She clarified the city does not intend to change how it uses funds generated by hospitality taxes.
  • "The trust our local hospitality and tourism leaders have placed in the City of Charlotte to use those funds to attract visitors to Charlotte and promote our region is not taken for granted," she added. "It is not our intent to breach that trust."

Zoom out: Asheville has discussed using tourism money for needs like affordable housing. NCRLA says the mountain town's elected officials are trying to misinterpret and manipulate the law.

The big picture: Vinay Patel, chair of the Charlotte Regional Visitors Authority, told Axios last week that he'd be disappointed if the city tried to change how the taxes are spent.

  • "I would be the first one to go to Raleigh and then see if I can get the taxes repealed," he said.

The city is expected to use hospitality funds to help renovate Bank of America Stadium. The venue, which hosts high-profile concerts and sporting events, is credited for keeping Uptown alive and the hospitality industry thriving in the pandemic's wake.

Editor's note: This story has been corrected to note that Asheville has discussed using tourism money for needs like affordable housing (but has not done so).

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