No one in Orange County could ever have imagined in 2006 that the vote they were about to take, to increase the county’s tourism development tax and redistribute it to some then-controversial purposes, would one day become critical in binding the region’s deepest wounds — and in binding the community.
But there it is.
In the days following Orlando’s darkest moment, in June, when Omar Mateen killed 49 and wounded 53 in the Pulse nightclub, it was the tourist tax that provided the venues for Orlando, Orange County and all of Central Florida to come together to grieve and heal and unite.
The Amway Center, built with that tourist money for the city’s NBA basketball team, the Orlando Magic, concerts and other entertainment, served as the site for President Barack Obama’s and Vice President Joe Biden’s private expressions of sympathy to the survivors and families of the Pulse nightclub massacre.
The Camping World Stadium (formerly known as the Florida Citrus Bowl,) — overhauled, expanded and modernized with that tourist money for football, soccer, tractor pulls and stadium rock — became the home of the city’s relief efforts for hundreds of family members of the dead and wounded.
And the Dr. Phillips Center for the Performing Arts, built with that tourist money for Broadway plays and other cultural performances, became the hallowed ground where Orlando’s LGBT community and greater community came together to hold hands in grief, remembrance, love and unity, hosting several vigils and accepting thousands of hand-delivered, anonymous tributes.
Orange County Mayor Teresa Jacobs thinks back to her vote in 2006 as a county commissioner, and she all but shudders at the thought that she was the swing vote deciding to use the tax to build the venues, and could have voted to kill them. She also thinks back to her attendance at a vigil inside the performing arts center a week after the Pulse massacre. Jacobs recalls it as the moment that she realized, as a human being, she personally needed some healing, and was finding a start there that night, perhaps along with everyone else there.
“When I sat there and just took in the support from this community, I realized if we didn’t have places for the community to come together, we wouldn’t have community,” she said.
Not bad for a tax that had — still has — the power to divide the most powerful players in Orlando politics.
As recently as April, Jacobs and Orlando Mayor Buddy Dyer found themselves on harshly opposing sides of a new plan to allocate the proceeds. As recently as June, Jacobs found herself in a bitter, name-calling fight with the man sometimes referred to as the Mayor of I-Drive, hotel magnate Harris Rosen. And, two weeks later, Jacobs was winning a hard-fought victory, re-establishing herself as the one in most control of the tax, yet still a long way from resolving powerful disagreements with Dyer and other tourism interests.
After all, it’s a tourism tax — 6 percent on all hotel room bills in Orange County. Historically, and still in many ways, its aim is to promote tourism. Cases can and are made that Orlando’s arena, performing arts center, and especially the stadium add to the tourism draw. But those arguments are justifications for what everyone knows are really venues built for the community, not the tourists.
That tax’s power comes from its unmatched bounty in Orange County, which hosts 66 million visitors a year and lays claim to being the world’s greatest tourist mecca.
In the fiscal year that ended Sept. 30, 2015, the next biggest Florida county’s tourist tax take was Miami-Dade’s, at $54 million. Broward County brought in $51 million. Osceola County collected $40 million; Monroe County, $38 million; and Pinellas County, $33 million.
Orange County collected $201 million that year, and is expecting far more this year, $226 million.
Combined, those next-five tourism counties barely collect as much tax as Orange.
“When you compare it to other jurisdictions around the state, it seems almost mind-boggling,” Jacobs said.
Much of Orange County’s bed tax’s uses are locked in state law, and in the contracts with voters that Orange County used as ballot questions. The first four cents have a prescribed set of uses, chiefly tourism promotion and convention center capital and operations, and to support tourism marketing, through the Orange County Convention and Visitors Bureau, known publicly as Visit Orlando. The fifth cent has a prescribed set of uses, adding sports facilities to the first four cents’ list. And the sixth cent has its own prescribed set of uses, just the convention center and professional sports facilities. Where there is overflow, priorities are set.
“We called it cascading buckets,” said former Orange County Mayor Rich Crotty, who was in office in 2006 when the tax was expanded. “The first bucket is the convention center … a lot of money is gone up front.”
But already there is money threatening to trickle out of the bottom bucket. The tax is growing, by 12 percent this year, by a projected 8 percent next year, and by 4 percent in coming years. More cash is pouring in. Orange County also had planned to throw $20 million toward a soccer stadium, and that plan was canceled last year when the state refused to match the local tax, leading Orlando City Soccer’s leaders to say: To heck with it, we’ll build our own stadium without public money. So that money’s available, too.
And that excess money will overflow in a big way, soon enough. The venues’ money is tied up in paying off bonds. Those bonds will be paid off in the early 2020s.
By 2024, there could be $100 million unencumbered. Annually.
“Anytime there’s a big pot of money, there’s competing interests for that money… When you have competing interests, you can see some political, contested discussions,” said lawyer/lobbyist Angel de la Portilla, whose clients include Rosen, the biggest critic of the county’s recent use of the tourism tax, as well as numerous other businesses along the International Drive corridor that wants, first and foremost, investment in the convention center.
Distinct from the I-Drive interests, Walt Disney World Parks and Resorts, Universal Orlando, SeaWorld Orlando and the Central Florida Hotel & Lodging Association have always seen the tourism marketing purpose as the big benefactor of the tax. It should promote Central Florida tourism, keeping those scores of millions of people coming to the theme parks and Orlando’s other attractions, and staying in the hotels that collect the tax in the first place.
In one of the more remarkable political achievements in the city’s history, in the tourism development tax expansion talks in 2006, Dyer and Crotty convinced those four interests a vibrant downtown Orlando was needed as well, said Richard Foglesong, a political science professor at Rollins College, political analyst for WFTV Channel 9 news, and author of a seminal book about tourism politics in Central Florida, “Married to the Mouse.”
Recognizing there are opportunities and needs now, in April Disney, Universal, SeaWorld, and the hotel association pitched an ambitious plan to take care of unfinished business, immediately. Build the stalled Phase II of the Doctor Phillips Performing Arts Center. Give Camping World Stadium the money its backers had originally expected in the 2006 deal, for other upgrades that were shelved. Provide a pot of money for the Central Florida Sports Commission to bid on sports events, much like the $1 million a year, for three years, that Florida Citrus Sports got in an emergency vote last spring to attract the NFL’s Pro Bowl all-star game to Camping World Stadium. Provide robust tax-backing for the Orlando Ballet, the Orlando Philharmonic Orchestra, the Orlando Science Center and other cultural institutions. And set aside another $1 million a year for future improvements for the Big Three venues, Dr. Phillips, Camping World Stadium and Amway Center.
“To meet our community’s goals of enhancing our world-class arts facility and competing for national and international sports and entertainment events, the tourism industry has developed a strategy and recommendation for future funding of organizations and facilities that drives tourism to Orange County,” argued Richard Maladecki, president of the Central Florida Hotel & Lodging Association.
Dyer quickly signed on. Orlando, as a player and the primary coordinator of the region’s interests, wants the investments to be in Orlando.
With the growing tax, with the deletion of the planned-for soccer stadium debt, and with the anticipated revenues, all of this — more than $100 million — could be added to the Big Three venues’ package. And the tourism development tax revenue still could pay off all the bonds by 2024. The opportunities to take more steps toward giving Orlando a full set of world-class amenities were too good to pass up. World-class amenities help make a world-class city. A world-class city is one more draw for a world-class tourism market. Let’s get it done, Dyer argued. Put on the gas.
Jacobs put on the brakes. The plan had no details, she charged. It needed, she argued, careful analysis — by her staff, and by Orange County Comptroller Martha Haynie’s, not others. Today’s rosy growth projections may be just another unexpected economic downturn away from being disastrously wrong. The risks of committing so much money could even endanger the top buckets, the convention center and Visit Orlando, she cautioned.
Rosen, who owns seven hotels in the convention center area, expressed outrage at the April plan. None of the things on the list are technically tourism investments. For better or worse, tourism is Orange County’s economic engine, employing tens of thousands of people just in the hotels. The hotel tax should first and foremost be used to assure their economic security, he argued, not diverted to downtown Orlando.
The International Drive Resort Area Chamber of Commerce, often a Rosen compatriot and for many huge hotels in the I-Drive area a rival organization to the Central Florida Hotel & Lodging Association, stuck to its preference that future investment focus on the top bucket, the Orange County Convention Center, and plans to expand it again.
And for a long time there has been another current of thought in Orange County, raised this year by at least a couple of candidates for the Orange County Board of Commissioners, that the tourism tax could be used for even greater needs. Tourists bring traffic. They put burdens on all civic services including law enforcement. Why not petition to do what is done in some other places nationally, and peel off a few of those tourist tax dollars to help support those other services?
“To me, it’s like everybody against Orange County,” Foglesong said.
The stakes are high, as far as the region’s tourism industry is concerned. Orlando sits well. But the competition is fierce. There’s head-to-head competition with Las Vegas, New York, Chicago, Los Angeles, and in the next tier — San Francisco, New Orleans, San Antonio, Seattle, Atlanta, and a hundred other American cities. But that’s only the American side.
“We’re a global destination. We’re really competing with other countries,” said Visit Orlando President George Aguel.
And Orlando knows too well what happens when an economic downturn — or even a hiccup — hits. That lesson came not in the Great Recession of 2008, but in the months following Sept. 11, 2001, when the global tourism market nosedived. That, as much as anything, led to an unheralded part of the 2006 tourism development tax deal that also built the Big Three Venues: half of the new, sixth cent was dedicated to Visit Orlando. So as the Great Recession hit, Orlando’s tourism fell again But perhaps not as much as might have happened, Aguel argued, because that extra tax revenue kept the marketing program robust. Orlando took advantage of competing cities’ declines.
“Looking back now, we say, ‘Thank goodness,’” Aguel said. And looking forward? Looking forward, the tourism industry wants to keep that money flowing.
But who’s money is it anyway?
“It’s Orange County’s tax,” Foglesong said.
“There is a difference of opinion on this one,” Jacobs conceded. “A lot of the tourism industry, and certain people in particular that I won’t mention by name (Rosen undoubtedly in her mind chief among them) definitely see it as theirs.
“Those are taxes. Those are collected from our visitors who come here. Those are public funds,” Jacobs contended. “And I think legislatively there are limitations on what we can do with the money. But they still are public funds. Who do they belong to? They belong to the public. But who controls them is the Board of County Commissioner. And I think over the years Orange County has been pretty good stewards. We’re conservative and I think that’s been beneficial. And I understand why the tourism feels a sense of ownership, because they were also supportive of creating it with an expected purpose.”
“I understand that. I understand. I just don’t technically think it’s their dollars that are collected from the visitors that come here,” she concluded.
Legally, she’s right, which is why all the other players have targeted Jacobs. If she, or some future Orange County mayor says no, and the commissioners don’t override, or if she says yes, and the commissioners agree, there’s really not much anyone else can do about it.
And that brings Orange County and Orlando to this year’s current fight. An effort pushed by Rosen, the I-Drive chamber, (and initially also Maladecki and other tourism leaders) would have Orange County lock in a process that would make it very difficult and very deliberative for anyone to make any changes in how the tourist tax money is spent.
The initial proposal was to lock such a plan into the Orange County Charter, via a county-wide vote in November. That would have set the process in stone, Rosen told Jacobs in June, so that “you guys can’t be destructive… you guys can’t mess it up.”
It wasn’t necessarily personal, de la Portilla argued. With term limits, neither Jacobs nor any of today’s commissioners will be in their current posts when 2024 rolls around. What happens this year is their policy. What happens eight years from now will be someone else’s.
But in a bitter tug-of-war at the Orange County Charter Review Commission, Jacobs ultimately defeated Rosen and the charter amendment idea was killed. The alternative, which Jacobs wanted all along and Rosen and the I-Drive chamber now back, is to set the process in county ordinance. So Jacobs set out to develop that new law.
In the meantime, Jacobs told Maladecki, Disney, Universal, SeaWorld, Dyer and others backing the April spending plan, everything else will have to wait until that ordinance is developed through a long, careful process of public hearings. Maybe November it’ll be ready. Maybe December. Maybe after that it’ll be time to debate actual changes in how the money is spent.
Let the next rounds of battles begin.