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Haywood threatens lawsuits against lodging owners over room tax

Businesses skirting Haywood County’s room tax laws should pay up or they could soon find themselves slapped with a lawsuit.

The Haywood County Tourism Development Authority plans to sue six accommodation owners who have repeatedly and openly neglected to pay the county’s 4 percent tax on overnight lodging, announced Executive Director Lynn Collins at the tourism board’s meeting last week.

“That will set an example,” Collins said. “Let them know that we actually are serious about it.”

Some businesses owe more than three years worth of room taxes, Collins said, and some have openly stated their defiance of the law.

Collins added that she sees places that are not paying the lodging tax with vacancy signs welcoming people. They are clearly doing business but either haven’t been charging the tax in the first place or have been pocketing it instead of remitting it to the county.

The tax is supposed to be tacked on to a tourist’s bill when they stay in a hotel, bed and breakfast or vacation home rental. Lodging owners then remit the tax they collect to the county on a monthly basis.

The tourism agency has not yet chosen which six taxpayers, or rather non-taxpayers, it will sue. But, Collins said it will go after “the most blatantly delinquent” properties.

“(Taking legal action) is the only thing you can do now,” said Al Matthews, Canton town manager and a member of the tourism board.

However, the board will continue to look for ways, such as changing legislation that would give them the authority to impose further sanctions, to bring more people into compliance. Currently, the authority has few options for punishing delinquent lodgers beyond lawsuits and liens.

For years, the tourism authority board has struggled with ways to bring accommodation owners into compliance. Each meeting, the board is presented with an list of people who owe overdue taxes.

“Every month we look at these penalties, and it’s the same people time after time after time,” said Marion Hamel, a tourism board member from Maggie Valley.

The revenue from the room tax is used to promote tourism in Haywood County.

In September, the tourism agency collected more than $96,000 from its 4 percent occupancy taxes — about $8,000 more than its estimated revenue for that month.

The increase is a vast improvement compared to August, when the actual amount of taxes collected came in 20 percent under the TDA’s year-to-date projections. The agency estimates it will bring in a little more than $863,000 this fiscal year.

Furor prompts re-think over TDA funding in Haywood

The Haywood County Tourism Development Authority board backed down from plans to cut grant funding for long-celebrated events such as Folkmoot USA, Downtown Waynesville street dances and Canton’s Labor Day Festival.

The tourism board had been contemplating new grant guidelines for events — cutting off grant funding after four years and capping one-day events to a maximum grant of $1,500. But they reversed course following backlash from event organizers over the proposed changes.

Not all tourism board members wanted the changes in the first place. Mark Clasby, executive director of the county’s Economic Development Commission and a board member, was among those on the tourism board who raised concerns about the repercussions of cutting funding for existing festivals.

The intent was to free up grant money to boost new, up-and-coming festivals. The watered-down guidelines encourage rather than mandate that “new, qualified events” are given priority status.

Established festivals already have strong sponsorships and attendance, and after receiving TDA money for four years, new events should be better able to support themselves, said Marion Hamel, a member of the board from Maggie Valley.

“We didn’t feel like it would be that big of a hardship,” said Hamel, who helped draft the proposed guidelines.

Hamel said four years of grant funding should be adequate.

“It is going to take three years for any new event to get off the ground,” Hamel said.

But, just because an event is longstanding does not mean it’s profitable or no longer needs grant support. The town of Canton doles out $20,000 for music, portable toilets, stages, tents, clean-up crews and law enforcement at its annual Labor Day Festival.

“Ours is a little over a 100 years now. We are going to get it right,” joked Al Matthews, Canton town manager and a board member.

Many of these events depend on TDA funding to help broaden their promotional efforts beyond Western North Carolina. Organizers said they would not be able to continue attracting larger crowds to the popular annual events without the funding, and the loss could force some perennial favorites to shut down.

“You don’t want to penalize somebody who is successful,” said Kay Miller, executive director of the Haywood County Arts Council, who attended the meeting. Miller said International Festival Day would never be able to advertise in publications, such as Southern Living, if it did not receive TDA money.

Most events are run by nonprofits, which are only allowed to keep a certain amount of money in the bank. Any monies left over go back into the nonprofit or are used to promote the event the following year.

“This would be very devastating to some of us,” said Deborah Reed, a member of the tourism board. Reed is also leader within the Canton merchant’s association FOCUS, a nonprofit that puts on the annual Mater Fest.

Board members agreed that new events should be given a chance but disagreed over whether older events should be excluded from the TDA’s funding pool.

“You don’t want to create funding dependent organizations,” agreed Matthews, who also suggested cutting out the proposed guidelines how much money older events can receive.

About $215,000 of the tourism agency’s funds — a quarter of what is collected from the county’s 4 percent tax on overnight lodging — are earmarked this year for special tourism initiatives. The TDA collects more than $850,000 in revenue each year from the county’s 4-percent lodging tax.

Maggie Valley, Canton, Waynesville, Lake Junaluska and Clyde each keep a portion of the tax revenue they generate. The five areas also have their own committee, which divvies up their share of the tourism agency’s funds.

Ken Stahl, the tourism board’s finance chair, said the committees need to try to achieve a balance between giving new events an opportunity to flourish and supporting the events the county is already known for.

“Our prime directive is to get an increase in tourism,” Stahl said.

Each year, the committees sift through applications and make recommendations to the tourism authority, which has final approval in all funding decisions.

The committees have “a very difficult time sometimes,” Hamel said.

“The best things to do would be to clarify (the guidelines),” Hamel said. “This is what we are suggesting.”

Some board members and event coordinators did not know about the proposed changes until they received a call for comment from The Smoky Mountain News for an article prior to the tourism meeting last week.

“It caught me a little off guard,” said Matthews, who noted that he had not seen the changes to the guidelines until he received the board’s meeting agenda.

Although a tamer version of the proposed guidelines was passed, the board could decide to pass stricter standards in the future.

“This subject comes up every two or three years for discussion,” said Lynn Collins, executive director of the Tourism Development Authority.

County commissioners demand answers from Cashiers tourism leader

A failure by the Cashiers Chamber of Commerce and the Cashiers Travel and Tourism Authority to provide county leaders reports on how room-tax dollars are spent led this week to promises of prompt corrective action.

Mark Jones, who serves in a dual role as county commissioner and chairman of the Cashiers Travel and Tourism Authority, said he had not been aware that there had been multiple and ongoing attempts to understand tourism marketing efforts. These are carried out with county funds under the direction of Cashiers Chamber of Commerce Director Sue Bumgarner. Bumgarner also has failed to provide the county with copies of minutes from Cashiers tourism board meetings as requested.

Jones’ concession came, however, after he indicated that he believed adequate information was already available to commissioners from the county’s finance office.

County Finance Officer Darlene Fox “prepares reports every month. Every dollar that goes in and every dollar that goes out,” Jones told the board.

While the bills for the Cashiers tourism agency are filed with the county finance department, it is often not clear from the invoices exactly what it is for, however, with only general references to an ad that ran in an unnamed magazine during an unspecified month or generic “marketing” services.

Chairman Jack Debnam made it evident that he didn’t consider Jones’ suggestion to simply rely on the finance office a satisfying one. Debnam indicated that he wants direct answers from the people with their hands down in the money pot.

“I’ve requested copy of minutes, since January, and information from (Bumgarner) and received nothing,” Debnam said.

Debnam said that the Jackson County Tourism and Travel Authority, by contrast, has provided him information and minutes of board meetings.

“I apologize,” Jones said. “I was not aware of the repetitive requests, but I hear loud and clear now.”

County Attorney Jay Coward told board members they have a lawful right to the information being sought. He did not detail possible remedies if the Cashiers TTA information and minutes continue being withheld from county leaders.

Bumbargner also was unable to provide The Smoky Mountain News with minutes from her tourism board meetings or an accounting of how marketing money was spent, including magazines ads had published in. Bumgarner was not at the commission work session, held this week to discuss whether to hike the county room tax from 3 percent to 6 percent.

 

Room tax hike deliberated

Jones urged a slowdown on the consideration of a room tax hike from 3 to 6 percent. The tax on overnight lodging generated $440,000 last year, which is pumped back into tourism marketing efforts carried out by two separate tourism promotion agencies in the county — the Cashiers and Jackson County Travel and Tourism authorities.

Commissioner Doug Cody defended the county’s attempt to demand accountability for how tourism tax money is being spent.

“I want to know why we are getting our butts kicked, and where our money is going, and is it being used wisely, and I want to find out now. And putting the tax increase aside, there’s a reason we are lagging behind. And, I don’t want to wait a year,” Cody said.

Regional tourism numbers show Jackson County behind other Western North Carolina counties, both in revenue made and jobs created.

The commissioners did not weigh in during the workshop on their individual stances on a room tax increase. Previously, four voted in favor of the increase, but that was before public backlash. Commissioners will take up the issue in early January for a vote, with intentions of studying the issue between now and then.

County Manager Chuck Wooten estimated the county’s two TTAs have spent as much as $10 million combined in tourism tax money over the past 25 years. Cashiers receives 75 percent of the lodging tax generated in the Cashiers area — which amounted to $177,000 last year. The remaining $263,000 went to the Jackson Travel and Tourism Authority.

Cashiers’ efforts to attract tourists have been isolated from the county’s overall tourism efforts, spearheaded by the separate Jackson County Travel and Tourism Authority and the Jackson County Chamber of Commerce.

Cashiers does not share marketing strategy or advertising campaigns with the Jackson County TTA.

 

How we got here

• Jackson County commissioners in early October voted 4-1 to hike the county’s room tax from 3 percent to 6 percent, with Mark Jones voting against the increase.

• The board later rescinded that vote because, as advised by County Attorney Jay Coward, they failed to hold a legally required public hearing.

• A side issue erupted over whether the two separate tourism marketing arms — one for Cashiers and one for the county as a whole — should be merged.

• The obligatory public hearing was held last week, attracting a swarm of unhappy lodging owners from the southern portion of the county who aired their vast displeasure with the proposed increase.

• Commissioners held a work session this week to discuss the possible hike. Discussion among commissioners deteriorated into accusations of underhanded dealing and political power plays. Before the argument broke out, County Manager Chuck Wooten defended the sequence of events leading up to the room-tax vote by presenting commissioners and members of the news media with an inch-tall stack of paperwork. These included emails and other documentation accumulated before and after the October room tax hike.

 

Where do we go next?

County Manager Chuck Wooten provided the following suggestions for consideration by commissioners, carefully emphasizing these were an attempt to help, not control, the debate:

• Take no action: Occupancy tax remains at 3 percent and the county’s two travel and tourism boards continue as currently configured.

• Make minor structural changes: Keep two tourism agencies, but provide more flexibility in how the room tax is spent, allowing a portion to go toward “tourism-related expenditures,” including capital projects, rather than solely marketing and promotions.

• Do a comprehensive performance evaluation of the current tourism agencies and analyze the effectiveness of these organizations, then make decisions based off of the results.

• Hike the tax from 3 percent to 6 percent and form a single Jackson County Tourism Development Authority.

Optimistic outlook for lodging revenue falls short

The Haywood County Tourism Board was hoping for a 15 percent increase in occupancy tax collection this August, but what it saw was a 20 percent decline.

“The August numbers aren’t good,” said Lynn Collins, director of the tourism agency.

It brought in $93,646 from its 4 percent tax on overnight lodging this August. However, it had projected that it would raise at least $114,442 — a 20 percent different.

“A lot of it has to do with the increase I projected for August,” Collins said. “If you look at it in comparison to last year, it doesn’t look as bad as it does compared to budget.”

When compared to last year, the decrease is only 7 percent, or almost $5,000.

Collins said she predicted an increase because of the number of area sporting events, including the Blue Ridge Breakaway and the Maggie Valley Moonlight Run. High gas prices and the economy continue to negatively affect the tourism board’s occupancy tax numbers, she said.

Despite the decline, Collins said she remains optimistic that things will improve.

“I feel good about it,” Collins said.

The tourism agency will not adjust its projections or make any cuts until January, she said.

At its quarterly meeting earlier this month, the tourism board began discussing ways to find vacation home renters who are evading the county’s lodging tax.

Collins is currently looking into software from the Virginia-based company VRCompliance, which searches the Internet for property listings and identifies rentals that are not paying the room tax.

The agency is also looking for more effective ways to censure businesses or renters who know about the tax but do not pay it. The tax doesn’t come out the lodgers’ revenue but is supposed to be added to the bill of those renting a room or house.

Haywood tourism leaders leave no stone unturned in hunt for room tax money

The Haywood County Tourism Development Authority may outsource its search for vacation home renters who are evading the county’s 4 percent tax on overnight lodging.

Lynn Collins, director of the tourism agency, plans to meet with Virginia-based software company VRCompliance over the next month. The company scours the Internet for property listings and helps identify renters in the county who are not collecting room tax.

The company would get a finder’s fee for each offender it tracks down that is brought into compliance, Collins said, but didn’t know exactly what that fee is yet.

Ferreting out people who rent their vacation homes under the radar is such a universal problem, VRCompliance, which stands for Vacation Rental Compliance, saw it as a business opportunity. It created software to search the web for vacation listings, and is now marketing that service to tourism agencies across the country trying to enforce the room tax.

Part of the problem is simply ignorance that vacation home rentals are subject to the overnight tax. Last month, the Haywood tourism agency announced a campaign to inform vacation homeowners that they are required to levy a 4 percent tax if they rent their property.

“That’s where the big money is,” said Ken Stahl, the board’s finance chair.

Stahl said he looked into cross-referencing local cabin addresses with the North Carolina Department of Revenue’s income tax records, but the department has not been willing to cooperate in the past.

And, even if the agency identifies properties skirting the tax law, the consequences — a fine or legal action — are still not enough to convince some to pay. While some are unaware of the law, other lodge owners are knowingly ignoring it, apparently collecting the tax from patrons but not passing it along to the county.

“Many of the hotels and motels feel that nothing is going to happen … because nothing has happened in the past,” said Marion Hamel of the Haywood County TDA.

During its meeting last Wednesday, the tourism board discussed other ways to enforce the tax law.

“We just got to have teeth,” said County Commissioner Michael Sorrells.

Among the options discussed were printing repeat offenders’ names in the newspaper and pulling their information from the board’s website and publication.

The county has previously used liens to bring people into compliance and mailed letters threatening legal action. Those who owe taxes also receive monthly bills.

“They know they’re not paying,” said Julie Davis, the finance officer for Haywood County.

The tax on overnight lodging is used for tourism promotions for the county. Haywood County collected about $135,198 in occupancy taxes this July — almost $10,800 less than the same period last year.

Stahl said the economy and a decline in tourism are responsible for the decrease.

“People say it’s not a double dip recession, but it sure feels like it,” he said.

Tourism agency targets tourist rentals flying under the room tax radar

Haywood County business owners who have been dodging the 4 percent lodging tax will now find themselves facing a crackdown, although some dodgers may not even be aware of their crime.

The lodging tax applies not only to hotels, B&B’s and traditional overnight stays, but also to those who rent out vacation homes or rooms for fewer than 90 days.

A flyer will be included in every property tax bill this year explaining the 4 percent tax vacation home owners should be levying and remitting to the Haywood County Tourism Development Authority.

Many second-home owners who rent their houses on the side for a little extra money often don’t even know that they have to pay, said Lynn Collins, executive director of the TDA.

Collins and her team trawl Websites such as Trip Advisor, Home and Away, and VRBO, which all advertise vacation rentals, complete with address, photos and customer reviews.

Mostly, when people realize they have to pay, they’re pretty good about getting compliant, said Collins.

Collins calls the push to bring in the money an awareness campaign, but her group isn’t just trying to reach the unknowing. They’re going after folks who have simply stopped paying outright, not only by the standard methods of levying fines but also pursuing delinquents through court.

Determining why business owners don’t pay is a little tricky, especially motel owners who know they should and simply don’t.

“It’s a combination of things. Some of it has to do with the economy, some of it has to do with awareness,” said Collins. “For the people who have perhaps quit paying or quit filing, we don’t know.”

For those who use the economy as an excuse to not pay, the reason falls pretty flat.

“This is not coming out of their pockets,” said Collins.

The businesses are simply acting as a pass-through from customer, who pays the extra tax on their overnight room bill, and remitting it to the TDA.

Many businesses, she posits, may not consider the tourism tax quite as mandatory as across-the-board taxes like sales and income tax.

And, said Collins, the tourism authority hasn’t been as staunch about enforcing the laws in the past, which will now change.

Collins said that businesses who begrudge the tax should recognize that its buying them a range of marketing services, even for small, by-owner vacation rentals.

“They get a free listing on the TDA website, they get a free listing in the TDA visitor’s  guide, they get a free listing in the state visitor’s guide and travel website, so there’s a tremendous amount of marketing being done on their behalf,” said Collins.

Regardless of the benefits, paying up is just the law.

“We’re losing a lot of money and it’s not fair to the folks who are following the law and paying the tax for some of their peers to not be doing it,” Collins said.

Canton feels slighted by shift in visitor center funding

In the world of Haywood County tourism, a turf battle is brewing, and the fiefdoms under fire are the county’s visitor centers.

What might seem like the friendly face of local tourism has once again become a battleground where funding dollars are the ultimate prize, and the most recent conflict has flared over Canton’s visitor center. It’s a small building, situated just off Interstate 40 on Champion Drive, in what was once a car wash. It has been closed on and off for the past year as the county’s tourism agency struggled with funding shortfalls, and is now at risk of having the plug pulled completely.

The Haywood County Tourism Development Authority plans to shift funding for the Canton visitor center, which sees little traffic, to a new, flagship visitor center on Main Street in downtown Waynesville with the promise of reaching more people.

Canton Mayor Pat Smathers has spoken out against the funding cut, pointing out the Canton visitor center’s proximity to I-40, making it more visible than any of the other three visitor centers in the county.

“I think a big push ought to be made to make that the premier center in the county, not just because it’s Canton, but because that’s the main corridor in the county,” said Smathers. “More visitors come in contact with I-40 than with any other place in the county and that visitors center should be a place to stop people and be able to funnel them into Maggie Valley, into Waynesville, Cruso, Canton, Clyde — everywhere in the county.”

Smathers said he’d be disappointed if the Canton center was relegated in favor of TDA’s newer Waynesville visitor center.

“I don’t know why we’re going to put more visitor centers up in Waynesville and not fund the one here on the main corridor,” Smathers said.

The visitor center isn’t Canton’s only bone to pick with the TDA. At last week’s TDA meeting, it was highlighted that a new map put out by the tourism agency showcased Waynesville and Maggie Valley as the only towns in the county. Canton didn’t even make an appearance. Neither did Clyde.

TDA Executive Director Lynn Collins defended the map, saying that listed locations were given to those who bought ad space.

 

TDA makes amends with Haywood Chamber

Canton isn’t the only visitor center to lose funding to make way for TDA’s new endeavor. The tourism agency announced it would ax $30,000 in funding a year for a Waynesville visitor center operated by the Haywood County Chamber of Commerce — diverting the money to its own visitor center instead.

While the TDA’s new visitor center will be mere blocks from the one run by the chamber, the chamber plans to keep operating its visitor center anyway — resulting in two visitor centers three blocks apart.

Pleas from the chamber of commerce not to yank its funding so suddenly convinced the TDA board to partially reverse course. The TDA board decided last week to restore partial funding to the tune of $13,000 for the coming fiscal year, but not without some dissension among board members.

TDA board member Lyndon Lowe questioned the decision, especially in light of the Canton visitor center predicament.

“Canton’s visitor center we say that we don’t have money for but we’re going to subsidize the one here?” Lowe asked fellow board members before voting against the funding.

Marion Hamel agreed, saying she would feel more comfortable with a smaller amount.

“I feel that $13,000 is putting us over the edge,” said Hamel, who represents Maggie Valley on the TDA. “I understand the rationale behind it, I just wish that it wasn’t as much money as it is.”

Jennifer Duerr, TDA board member and owner of the Windover Inn, also expressed concerns over the fairness of partial funding to the chamber for its visitor center but not Canton’s.

“If we’re going to not be making an exception for one, I’m a little uncomfortable making it for another,” said Duerr.

The measure eventually passed, though not unanimously, with Hamel, Lowe and Duerr casting the only dissenting votes.

 

Canton fate up in the air

TDA planned to pull its staff out of the Canton visitor center in May and turn it over to volunteers to run, but not enough volunteers materialized. Total closure seemed imminent, but a rescue came through from a special pot of tourism money controlled by Canton.

A portion of tourism tax dollars are divvied up between five locales in the county to use on pet projects. Canton has elected to use $3,000 from its special pool of money to staff the visitor center through July. The TDA, however, is still calling for volunteers to help work the center at other times.

TDA board members maintain that they are committed to keeping the center open and believe in its viability.

“It is our every intention to keep that visitor center open,” said Ken Stahl, a TDA board member, but he has also noted that many driving visitors find information via GPS and Web-enabled phones, rather than through traditional highway visitor centers.

Strictly by the numbers, Canton’s center ranks third out of the county’s four visitor’s centers for actual visitors, trailing the popular Balsam center and Maggie Valley’s location.

However, Haywood County Economic Development Director Mark Clasby, who sits on the TDA, said that the Canton center should be a priority for tourism in the county.

“I think it plays an important role,” said Clasby. “Before the rock slide that we had, the numbers for the Canton visitor’s center were up. I think it’s a very important geographic location.”

Canton Town Manager Al Matthews is  both the town manager in Canton and a TDA board member himself.

“The town sees the necessity and advisability of having a visitor center here,” said Matthews. “We have been working with the TDA, trying to make sure that the visitor’s center is open on a regular basis.”

The car-wash-cum-visitor’s-center may not be the only iron in the fire for Canton, though. Back in 2004, the idea for a more comprehensive visitor’s experience off I-40 in Canton was proposed, but stalled before getting funding for a feasibility study when the economy tanked two years later.

There’s talk of the concept being resurrected, however, as part of an economic development plan being crafted for the town using a grant from the N.C. Rural Center.

Matthews said that, though it’s an idea that’s on the table, it’s far too early to speculate about its practicality.

“Hypothetically that is an option, but it’s premature to say that could or should or would happen,” said Matthews.

It’s still unclear whether Canton’s current center will be able to stay open full time into the next fiscal year. Lynn Collins, TDA’s executive director, said they “were still working it out.”

Folkmoot funding gets the ax

Folkmoot festival has lost a vital source of advertising money, jeopardizing its ability to lure visitors to Haywood County during the festival’s two-week summer run.

The Haywood County Tourism Development Authority announced its intention this month to yank its annual contribution to Folkmoot USA. The TDA has given Folkmoot between $6,000 and $12,000 every year since the festival’s inception in 1984.

Folkmoot President Chuck Dickson made a heartfelt pitch to the TDA board last week, asking them to reinstate the funding.

“Folkmoot has helped put Haywood County on the map and has definitely enhanced Haywood County’s reputation as a tourist destination,” Dickson told the 15 members of the TDA board.

TDA board members cited a still-slumping economy and overhead associated with a new downtown Waynesville visitor center as the culprits.

The festival turns Haywood County into an international bazaar every July, with more than 200 dancers and musicians from a dozen countries staging a series of performances and parades. The TDA funding is spent marketing the festival to audiences across the South.

Last year, Folkmoot only got a portion of what they requested — $6,000 of the $9,000 they were looking for — which covered just under a third of the $19,000 spent on advertising.

Cutting the contribution altogether would hurt Folkmoot’s ability to publicize the festival. Dickson said Folkmoot helps TDA achieve its own mission of luring overnight visitors.

“We put heads in beds — perhaps more than any other event in Haywood County,” said Dickson. “In 2010, 5,000 people attended ticketed events, 2,000 attended free events, and over 50,000 attended the parade and Festival Day, two events for which Folkmoot receives absolutely no money.”

Dickson came armed with both a crowd of Folkmoot supporters and an economic impact study done by Western Carolina University in 2008.

The study walks through the particulars of just how much money and business the festival pulls into the county, but the final total was over $4 million for the 2007 festival.

“These contributions not only increase the appeal of the festival from year to year, but help reinforce the attractiveness of the area in general and that of all other cultural events in the region,” summarized the study.

 

TDA cuts spurred by budget woes of its own

None of the TDA board members were arguing against that claim. In fact, several espoused the merits of having such a large and unique event housed in the county for such a long time.

However, they weren’t enamored enough to restore the funding.

The TDA board cited the same oft-repeated reason for budget cuts heard at the local, state and national levels of late: it’s the economy, what else can we do?

“It’s more about looking at harsh finances right now and looking at the bigger picture. I would rather give people more money, but we’re just in a situation with the budget and the money’s just not coming in,” said Jennifer Duerr, TDA board member and owner of the Windover Inn.

The TDA raises money with a 4 percent tax on overnight lodging, bringing in close to $1 million a year. As tourism has dropped with the recession, however, the TDA has seen its budget shrink by nearly $300,000 in three years.

This year alone, the TDA has come up $115,000 short of what it anticipated, leaving the agency struggling to make mid-year budget cuts.

TDA Board Member Ken Stahl floated the idea that Folkmoot lobby Buncombe and Jackson counties for contributions, but Dickson said that tactic was a bit of a long shot, given that they only put on a max of two shows in those counties.

The official suggestion was that Folkmoot apply to special pots of TDA money controlled by individual communities within the county. Maggie Valley, Waynesville, Lake Junaluska, Canton and Clyde each get a slice of TDA money to spend on pet projects, from concerts to brochures to micro-level marketing. A quarter of the total TDA budget is divvied up among the county’s five locales.

The TDA board told Folkmoot to take its request to the five committees that oversee the five pots of money.

Folkmoot has historically been paid out of the general fund since the festival is county-wide and holds events in literally each of the five locales, Dixon said. So which one would Folkmoot apply to? The board told Dixon to apply to all five.

The problem there is that those committees won’t have any cash to hand out until autumn at the earliest. In fact, grants for this round of funding were approved later at the same meeting.

Not everybody on the TDA board was in favor of cutting Folkmoot from the tourism agency’s general budget.

Mark Clasby, the county’s economic development director who also sits on the TDA, was vocally opposed to revoking the money.

“The recognition Folkmoot has brought to Haywood County is tremendous, and I disagree with the recommendation that you’re making,” Clasby told board members. “I think it’s wrong.”

Clasby said that Folkmoot is so well-known it’s one of the tools he uses to pitch Haywood County when he’s out courting business development for the county, and that if any organization deserves the money, it’s Folkmoot.

“I certainly understand the budget situation we’re all facing, but at least give them some funding and support,” said Clasby.

TDA Board Member Jennifer Duerr countered Clasby’s view, arguing that it’s just about a change in the way funds are given out, thanks to the economy. The dwindling general fund should be kept for county-wide causes, she said.

“It’s not that we want to not give the money, it’s just not there. Do we give the money to one event, or keep it to represent the entire county?” asked Duerr.

Other members voiced similar views, with Alice Aumen, the board’s chairperson, saying that this year’s budget has been particularly trying.

“It has been one of the most difficult years since I’ve been on the board,” said Aumen.

James Carver, owner of the Maggie Valley Restaurant and board member, said he’d love to give Folkmoot money this year, but that it just wasn’t there.

“I‘ve always been a big supporter of Folkmoot, but money’s down,” said Carver.

In the end, the TDA board gave Dickson and his compatriots their apologies and an invitation to come back and ask again next year, but if they were hoping for a check, they went away empty handed.

“What we would like to leave Folkmoot with is that it is an important event. We all hope it’s going to be a great year for travel and tourism and revenues are going to come up,” said TDA Board Member Sue Knapko, encouraging festival officials to come back again if the committees don’t work out.

New TDA visitor center will leave Haywood Chamber with funding woes

Less than a year after opening a new visitor center in downtown Waynesville, the Haywood County Chamber of Commerce learned last week that its funding for the site is on the chopping block by the Haywood County Tourism Development Authority.

The county tourism agency plans to open its own visitor center downtown and end its subsidy for the one run by the chamber.

The tourism agency is better positioned to operate a one-stop shop for tourists looking for things to do and see in the county, according to TDA Director Lynn Collins.

“Our sole purpose in life is to market Harwood County as a destination,” Collins said.

It makes sense for the TDA, which is in charge of branding and marketing the county, to run its own visitor center for tourists to provide a seamless message rather than contract the role out to the chamber.

“This is a good time for us to take control of our program and tell our story the way we want to tell it,” Collins said.

The chamber received $30,000 from the TDA to run a visitor center. Losing that revenue will not be easy and could mean the loss of staff, according to CeCe Hipps, the Haywood chamber’s executive director.

“Anytime an organization gets that big of a budget cut, we will have to look at how we do our day-to-day operations,” Hipps said.

The chamber says it will not shut down its visitor center, however, despite the loss of funding. A visitor center is still central to the chamber’s mission, Hipps said.

“Chambers are considered a trusted and established source of information,” Hipps said. “Regardless of the outcome of this we will maintain our visibility and maintain our visitor center. Nothing will change for us from that aspect.”

The result: two visitor centers less than three blocks apart in downtown Waynesville.

The turn of events comes as the Tourism Development Authority grapples with budget shortfalls of its own. The TDA raises money with a 4 percent tax on overnight lodging, bringing in close to $1 million a year. That money is pumped back into tourism promotions, from national advertising campaigns to mini-grants for local festivals.

As tourism has dropped with the recession, however, the TDA has seen its budget shrink by more than $200,000 in three years. This year alone, the TDA has come up $115,000 short of what it anticipated, leaving the agency struggling to make mid-year budget cuts.

“We didn’t just wake up one morning and say ‘Let’s go take the chamber’s funding away from it.’ There is a quite a bit of planning and pros and cons and up and down that when into this,” said Ken Stahl, TDA finance chair.

However, the chamber learned only last week that its visitor center funding is in jeopardy with the start of the new fiscal year come July. Such short notice will make it hard to adjust, Hipps said.

Key members of the chamber board and TDA board met last week to discuss the issue. Ron Leatherwood, the incoming president of the chamber board, said the TDA might be willing to phase out the visitor center funding over two years rather than doing it all at once. That would certainly soften the blow, he said.

The visitor center funding is more than 10 percent of the chamber’s annual budget, and it will be a challenge to make up the difference, Leatherwood said.

But Leatherwood said he understands why the TDA, which is in the tourism business after all, wants its own visitor center. If they can serve the number of visitors they hope to — 40,000 a year — it will surely be a good thing for the county, Leatherwood said.

“Hopefully it will be successful for all of us. A rising tide lifts all boats,” Leatherwood said.

 

A full-service visitor center

The TDA envisions a full-service visitor center, where tourists will be awed by an endless list of things to do in Haywood County, from crafts to fly-fishing to motorcycle rides. Not to mention a clearinghouse for all the special events going on any given weekend, something that doesn’t exist now.

“We hope to achieve a little bit of synergism here,” said Stahl.

And since the TDA lives and breathes tourism, it can best disseminate that information, Collins said.

“We have a very good handle on what is going on in the county,” Collins said.

Collins also wants their visitor center to be open seven days a week, compared to the chamber’s visitor center, which is only open on weekdays.

The TDA is negotiating a lease to house the visitor center and its administrative offices in a storefront on Main Street across from Mast General store — in the thick of the downtown action. It’s a better spot for snagging foot traffic than the chamber’s location, Stahl said.

Stahl hopes a new visitor center will catch 40,000 visitors a year compared to the 6,000 seen at the chamber’s visitor center.

“When the foot traffic is in the thousands up there on Main Street, it is an opportunity for us to reach out and touch a lot more people than what we have been for essentially the same amount of money,” Stahl said.

The chamber’s visitor center is past the courthouse in a historic home a block beyond the main shopping district. To Hipps, the location is ideal: at the corner where Russ Avenue, a main corridor into downtown, feeds into Main Street.

The chamber just moved into the building last June. It had been without a permanent home for much of the past decade, bopping from one location to another every few years. A visible spot for the visitor center was the top consideration in the quest for a permanent site.

“That was our main driver. We wanted to have a gateway into the downtown area,” Hipps said.

The chamber’s physical quarters are impressive and inviting. The stately historic brick home has a wide front porch decked out in rocking chairs. The lobby has a grand double staircase and features include hardwood floors and black-and-white checked bathroom tiles. Its interior décor is appointed with comfy sofas and lush ferns. The front lawn is crowned by stately oaks with views down Main Street.

“We wanted something that would give people a really good first impression,” Hipps said.

The chamber made a sizeable investment when signing a three-year lease on the building.

Hipps said tourists quickly make themselves at home there.

“Finding the perfect home for a visitor center was so key. Had we known this a year ago we probably would have looked at other options,” Hipps said.

 

Move in the cards

Until now, the TDA has been holed up in an obscure county office building carrying out a mostly administrative role. Few in the county could tell you where the agency was headquartered, despite its very showy mission of broadcasting Haywood’s tourism accolades to the world.

Despite a sweetheart deal — the county charged the TDA only $250 a month in rent — the TDA had been contemplating a move to new offices for a couple of years.

But it was spurred recently into action by a massive reshuffling of county office space — one that might leave the TDA with no home at all.

Most of the occupants housed in the same office building as TDA are moving to an abandoned Wal-Mart being remodeled for various county departments. The project was motivated by the need to replace the antiquated quarters of the Department of Social Services but has led to musical chairs for other county offices as well.

The county hasn’t decided yet whether TDA can stay where it is, whether it might give the space to different county departments, or whether it will sell the building.

While it’s not certain TDA will get the boot, it was enough to get the TDA’s attention.

“They have not said definitively we have to move any certain time. Their exact words from the county manager were it would be prudent for you to start looking,” Collins said.

It seemed like a good time to pull the trigger on something they wanted to do anyway.

“We don’t want to wait until the music stops and not have a chair,” Stahl said.

If the TDA is going to fork out substantially more in rent, it will cut into its already tight budget. To make it work financially, the TDA will take visitor center funding away from the chamber to cover the rent, bringing visitor enter operations in-house in the process.

“If we are going to move we want to move into something that totally completes our mission,” said Alice Aumen, chair of the TDA board.

Part of that mission is to bring the TDA to the next level as an agency.

Since the TDA’s creation 25 years ago, it has funded visitor centers run by both the Haywood chamber and Maggie Valley chamber.

While it made sense for the TDA to outsource visitor center operations in its infancy — in the early days it had no staff of its own let alone an office — it has grown into a major marketing force for tourism and needs to take a leading role in serving tourists once they arrive.

There’s another advantage to running its own visitor center: to advance marketing research, Collins said. Currently, TDA staff responsible for marketing the county don’t interface directly with the traveling public on a daily basis. Collins wants to survey visitors and find out what brought them here, where they are from, how much they are spending, who’s in the traveling party, and what they like to do.

“It helps us get to know our visitors better. We can conduct all kinds of market research to build our marketing program appropriately,” Collins said. “If you don’t have research you are flying by the seat of your pants.”

The days of shotgun advertising is over, said Aumen.

“This is a huge opportunity for us to do research on who the actual visitor is,” Aumen said.

Plus, TDA can capture the email addresses of visitors, which are worth their weight in gold for direct marketing through social media like Facebook.

While the TDA is in the business of luring visitors to the county, there’s still an advantage to engaging those who are already here.

“Even though they are already here, we can get information in their hands that would make them want to extend their stay or come back for a visit at another point in the year,” Collins said.

 

Fulfilling a mission

Before moving in to its new office last year, the chamber invited the TDA to share the space. The two entities could run a joint visitor center and share overhead expenses, Hipps suggested.

Talk of co-locating the chamber and TDA have surfaced on and off over the years, but this marked the first formal invitation to the TDA to move in together.

“We wanted to continue and strengthen our partnership and to continue to work together and collaborate,” Hipps said.

Hipps said the two entities have the same common goal, namely “to promote Haywood County.”

It’s common for chambers of commerce and county tourism agencies to share offices and staff while maintaining separate budgets. It’s done in Asheville to the east and Jackson County to the west.

But co-locating with the chamber did not fit the TDA’s mission.

While tourism is the TDA’s only focus, the chamber recruits new businesses, promotes commerce, supports entrepreneurs and engages in economic development.

“A visitor center is not their primary mission,” Stahl said.

But Hipps said tourism is integral to the county’s economy, and thus integral to the chamber’s mission.

“Our model has always been everyone in this county is connected to tourism,” Hipps said. “We can’t dissect and separate the chamber from tourism.”

That said, the chamber’s visitor center does serve as a point of contact for people moving to Haywood County, buying a second home, relocating their business, starting a new business — all of whom may have started out as just a tourist at one time.

“We are so connected with the big picture that the overall economic impact is much greater than the numbers for foot traffic that comes through the door,” Hipps said. “Our business model is all inclusive.”

The chamber’s visitor center is critical a point of contact for business inquiries, said Leatherwood. You never know when a “lone eagle” will stroll into the visitor center, for example. That term refers to a mobile professional who can do their job online from anywhere and may be seeking a new place to move, Leatherwood said.

 

A county of many visitor centers

The visitor center run by the Haywood Chamber is one of four funded by the TDA.

“We are probably the only TDA in the state that funds four visitor centers,” Stahl said.

One in Maggie Valley run by the Maggie Valley Chamber of Commerce gets $30,000 a year from the TDA. The other two — one at the highway rest area in Balsam and one off the interstate in Canton — are staffed by the TDA at a cost of $25,000 each.

The Canton visitor center was opened only three years ago, but tourist traffic there has not panned out. A cinderblock car wash beside a gas station was converted into a visitor center.

Faced with a budget shortfall last spring, the TDA shut the Canton visitor center for six weeks. Traffic had fallen sharply anyway due to a rockslide that shut down I-40. But even once I-40 opened again, numbers remained low. In the fall, hours were scaled back, and in January it was shut completely. The TDA plans to turn it over to volunteers with the Canton merchant association.

The visitor centers in Maggie Valley and at Balsam draw higher numbers of visitors (see chart). Neither is on the chopping block for now.

The TDA will continue funding the visitor centers that perform better, but could not justify funding those that saw such a small number of visitors, Stahl said.

Hipps said the chamber is grateful for TDA support all these years and believes the two entities will continue to work together.

“We have a very successful business model here. TDA has been a part of that success by helping to fund that part of what we do,” Hipps said.

TDA debates where to draw line for events that may not benefit entire county

Should a private business receive taxpayer money to stage an event?

That was the question of the hour at two recent meetings of the Haywood County Tourism Development Authority as the board discussed how to dole out its dollars.

The debate was prompted by a funding request from the Waynesville Inn Golf Resort and Spa. The resort had snagged the interest of the Western North Carolina Porsche Club and enticed them to hold a car show on the property in July. The group had never had an event in the mountains west of Asheville, so representatives from the resort saw it as a prime opportunity to attract a new breed of clientele.

“We’re trying to bring some different kinds of business to this county,” Waynesville Inn owner Dave Stubbs told the TDA board. “Our feeling is you have to have that targeted. You can’t just say, ‘come to Haywood County’ — you’ve got to have a specific thing going on. We’re trying to take the lead to design and sponsor a specific event.”

TDA members seemed impressed with the idea.

“I think we’ve got an opportunity to really reach out and do something new,” said board member James Carver.

But would the Porsche show really benefit Haywood County as a whole, TDA members wondered? After all, the whole event would be hosted on the grounds of the Waynesville Inn, with meals and a special room rate included in the package.

“I think what you’re trying to do is certainly admirable, but I think the point is there are many events that come into town but they’re not based at a hotel and the money isn’t going to a hotel,” said board member Marion Hamel.

Hamel continued to argue her case the next day at a meeting of the TDA finance committee, which was coming up with funding recommendations.

“The problem is, you’re setting a precedent,” she said. “We have turned down so many ads and events because it doesn’t include everybody, and we’re in danger of setting a precedent we can’t afford to set.”

Board member Jen Duerr said that attitude, long prevalent in the TDA, was doing the area more harm than good.

“I think that’s what’s holding this area back,” she said.

Chair Alice Aumen said she saw a need for the TDA to be more flexible in its thinking.

“Let’s see if we can make it fit rather than saying no, because I think that makes us look very close-minded,” Aumen said. “If someone has gone to all the trouble to bring in this event, they deserve something.”

TDA Executive Director Lynn Collins told the board to think twice before turning down an event that someone else had done all the effort to attract.

“If somebody out there is willing to take on some of this stuff and help us expand our reach and our markets, then we need to think seriously about letting them help us,” Collins said.

Board member Ken Stahl said that despite good arguments in favor of funding the Porsche event, doing so would still raise some questions.

“We have a problem if we directly subsidize a private enterprise and then they directly benefit from it,” said Stahl.

The board eventually settled on a compromise: it would fund the Porsche event, as well as another event being held at a Maggie Valley hotel, for the events’ inaugural year only.

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