Wake Commissioners Debate How to Spend Food, Beverage, and Hotel Taxes | Wake County | Indy Week
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Wake Commissioners Debate How to Spend Food, Beverage, and Hotel Taxes 

In a way, the fund belongs to you.

Every time you stay in a hotel or have a meal—or drink—at a Wake County establishment, you're paying into it. But just where food, beverage, and occupancy tax dollars are spent—and who makes that call—is becoming a burning question in Wake County after the Board of Commissioners sparred last week over funding potential sports, arts, and cultural projects from the food, beverage, and occupancy coffer.

Here's what went down. Fourteen proposals were submitted to the county manager's office for review after funding for a basketball park in Knightdale fell through. Staff rated the potential projects, and after a lengthy review process, county manager Jim Hartmann recommended that six of them receive about $3.3 million. But Commissioner John Burns wanted to hear more about two projects that scored well but failed to make the short list: Morgan Street Food Hall and the Capital Athletic Pavillion, an indoor sports complex in Raleigh.

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In a 4–3 vote, Burns's request was rejected, but he kept working on it. On Friday, the county told the INDY that the two projects would be taken up at the board's October 10 work session, where the projects' organizers will present their cases to commissioners.

"I just want to learn more about the projects," Burns says. "We will consider funding at a later meeting. I think these are all very worthwhile and exciting projects for our county and our staff, and the committee did an excellent job reviewing them. I just like to have as much information as I can reasonably have."

"I'm psyched," says Niall Hanley, the owner of Hibernian and Raleigh Beer Garden who is opening Morgan Street Food Hall, a twenty-one-thousand-square-foot market with more than sixty shops and kiosks. "Our project is great for tourism and great for incubating young restaurant talents that would find it tough to build a restaurant in the booming economy that is Raleigh right now."

The revenue comes from two taxes authorized by the General Assembly in 1995—a 6 percent hotel tax and a 1 percent food and beverage tax, which together raised more than $45 million last year. After meeting existing commitments, including to the Greater Raleigh Convention and Visitors Bureau, the city and county earmarked the bulk of the money—85 percent of what's left over—to the convention center. The rest is available for other projects.

To date, that money has helped fund the construction of the PNC Arena and the Raleigh Convention Center, as well as Five County Stadium in Zebulon, the IMAX theater in Raleigh, and a one-time allocation of $10 million to Cary for improvements at WakeMed Soccer Park, the USA Baseball National Training Complex, and Cary Tennis Park.

Anyone can apply for a grant, be it a municipality, nonprofit, or for-profit business. But the money is limited "to the construction of sports, cultural and arts-related facilities," according to state law—and that's why, after consulting with the county attorney, Hartmann turned down Hanley's request, according to Wake County spokeswoman Dara Demi.

The thing is, the law never defines what constitutes "cultural," and you could argue that a food market is in fact a cultural facility.

That's not the only pending issue. With the county's exponential growth over the past few decades, Wake's smaller municipalities have begun voicing concerns that all of their money is going to Raleigh. Though Cary and Morrisville together generate more than a third of the county's hotel taxes, according to a News & Observer report, Cary is only guaranteed 5 percent of the occupancy tax's revenue, and Morrisville is entitled to none.

In May, Cary mayor Harold Weinbrecht Jr. sent a letter to county chairman James West and Raleigh mayor Nancy MacFarlane asking them to consider a new funding model. Noting that "many Wake communities, including Cary, have facilities that also need attention," Weinbrecht wrote, "our recommendation and request is to look at all qualifying contributing facilities needs for continued support to establish a fair, balanced, and holistic plan."

At a May 26 town council meeting, he was less diplomatic: "I am losing patience," he said then, according to the N&O. "We don't have a voice. We are funding all of Raleigh's projects, and I'm getting tired of it."

As for Hanley, he's aware of the political pressures. A large part of his task at the October 10 session will be convincing the Board of Commissioners that his project can benefit the county as a whole, not just Raleigh.

"This is not just about Raleigh," he says. "This is about people going out into Garner, Wake Forest, and Zebulon, and all of these cool small towns, and they would be adding to the tax base there."

This article appeared in print with the headline "Culture Clash"

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