Sunday, October 23, 2011

Hotel Receipts Up in Region for FY11

The good news is hotel bed tax receipts were up for the 12 months ending in June 2011. The bad news, it's extremely difficult to match the state figures with local bed tax receipts. That shouldn't be the case (more on that later), but now the numbers.

After many areas took a battering last year in lodging revenues, most counties in Southern Illinois saw an increase in FY 2011.

Overall, the Illinois Department of Revenue reported that the state saw a 3.3 percent overall increase in bed tax collections throughout the 17-county region from Mount Vernon south (at least in the 11 counties where they broke out figures; data wasn't available for the other six). Area lodging operators collected more than $3.1 million for the state's 6 percent bed tax from travelers in the region.

For the last couple of decades Mount Vernon and Marion have boasted the most hotel rooms along with interstate interchanges, but for the last two years Williamson County has surprassed Jefferson County in taxable hotel revenues.

Jefferson County lodging operators brought in more than $13.5 million during the 12 month period compared to Williamson County's $13.9 million. Both counties saw revenues just 7.3 to 7.4 percent.

Jackson County saw revenues go up 1.6 percent to $8.7 million. Massac County also saw a small increase of just 1.2 percent to $4.35 million, but river flooding is also partly to blame with two of Metropolis' major properties closed at times this spring due to the high water, (one of which was still closed for remodeling as of a few weeks ago).

Franklin County comes in fifth with $2.9 million in hotel revenues, down 10.6 percent during the year, and down 16.9 percent compared with two years earlier.

Randolph County with hotels in Chester and Sparta saw a 10.5 percent drop in revenues last year, down to $2.5 million, but they're still up 7.8 percent over the last two years.

Union County rounds out the top seven counties with its establishments reporting just under $1.6 million in revenue. They were down three-tenths of a percent compared with the year before. Unlike its larger competitors, Union County sees most of its revenues come from smaller specialty properties of cabin rentals and B&Bs rather than hotels and motels.

In reality, Union County's lodging operators actually played a bigger role, as the state counts establishments by their zip codes rather than their actual location. Thus all of the places with Makanda zip codes including Giant City Lodge, are included in Jackson County's totals.

Likewise Williamson County loses three cabins with a Carbondale zip code to Jackson County, but picks up two at the Lake of Egypt with a Creal Springs zip code that are actually in Johnson County.

Elsehwere Saline County experienced a 13.1 percent increase with hotel revenue up to nearly $1.3 million. Perry County hotels followed with nearly $1.2 million, pretty much the same as the year before.

White County with most of its lodging on its north side at Grayville and Interstate 64 reported $1.1 million in hotel revenue.

Hardin County lodging operators reported $356,000 in revenue down 2.1 percent from the year before while Pope County saw a 35.9 percent increase in revenues reported though from a smaller base. Their operators reported $262,000 in room rentals.

No figures were made available for the industry in Alexander, Gallatin, Hamilton, Johnson and Pulaski counties (as well as White County for previous years). The state doesn't release county level information if there are fewer than four lodging establishments paying state taxes.

Another problem is that even when the zip code issue is taken into account, the state's still four or five establishments short in Williamson County alone. Either some folks aren't paying the state taxes, but should, or there's yet another issue with the Department of Revenue's procedures.

The difference between the state and county's figures in Williamson County is more than a vacation rental, or an outdated motel or two that's more residential than tourist any more. It's the equivalent of one or two of the largest hotels not paying.

I'm beginning to wonder if the state is counting the location of the hotel management company and where they write the monthly check rather than the actual location of the hotel. All the Department of Revenue is concerned about is, well, the revenue.

The problem is that the Williamson County Tourism Bureau may be getting shortchanged in state funding, just as Carbondale benefits and Southernmost Illinois Tourism loses when Giant City Lodge and all the other Makanda-addressed facilities on the Union side of the county line get counted in Jackson. Except in Williamson County's case the figures may be more significant.

Local certified convention and tourism bureaus are funded by local bed tax collections as well as a state Local Convention and Tourism Bureau (LCTB) grant. The General Assembly appropriates the overall amount for the LCTB grants and the Illinois Bureau of Tourism uses a formula to distribute the funds proportionally among the various bureaus. The formula is based on three components; the state's bed tax collections from the bureau's service area being the biggest component, with restaurant sales tax collections being the second biggest factor.

The problem? IBOT gets the figures for their formulas from the Illinois Department of Revenue.

That's a mystery I don't have time to unravel right now, but at least we can focus on the positive: More people are spending more money in Southern Illinois than they did the year before.

West Frankfort Considers Little Egypt Oasis Development

West Frankfort Mayor Tom Jordan joins area developer Scott Williams in the latest video about the Little Egypt Oasis proposal to split the Exit 65 interchange on Interstate 57.

Williams owns the old Burlington Railroad bridge over the interstate and wants to make it a new centerpiece for development on the west side of the city.

The plan would move the south ramps at Exit 65 south past the bridge to what's known as North Road. There the ramps would connect to two one-way frontage roads on either side of the interstate that would run north to Main Street and the existing interstate ramps to the north.

The current ramps on the south side of Exit 65 are shorter than desired even by 1960s standards for interstate highway construction. The problem then was the presence of the massive railroad bridge.

With the planned widening of the interstate to six lanes during the next decade the railroad bridge's presence will only increase the safety issues, unless as Williams points out, the state splits the exit and moves the south ramps south of the railroad bridge.

That move would not only open up hundreds of acres for new commercial development, but would also allow the development of a southwest bypass or Burlington Boulevard along the old railroad grade connecting Route 37 on the south side of Frankfort to Route 149 west of Kmart.

Wiliams has been working on this for a few years now. The pyramid part of his project over the interstate would also create a huge gateway to Southern Illinois for southbound tourists entering the region.

Saturday, October 22, 2011

Labor Agreement, Hotel Upgrades Boosts Illinois Tourism

Chicago's trade show industry sighed with relief yesterday with the joint announcement by Gov. Pat Quinn and Mayor Rahm Emanuel that unions representing workers at the Metropolitan Pier and Exposition Authority have agreed to work rule changes.

The two unions had sued over exhibitor-friendly work rules the General Assembly ordered last year. In March, a federal judge sided with the unions and threw out some of the reforms on the grounds that the Legislature was overstepping its authority.

The judge’s ruling threw the convention business into an uproar. Some show managers threatened to cancel bookings at McCormick Place, citing a fear of escalating costs.

With the new deal, the unions and McPier, as the McCormick Place board is commonly called, will agree to end the litigation.

McPier now can put in place an “exhibitors’ bill of rights” that lets show managers and exhibitors set up their own booths with simple tools. Exhibitors also can drive and unload their own vehicles at McCormick Place, and union work can be done by two-person crews instead of the old minimum of three.

The effort to change the work rules and preserve Chicago's trade show status has been in the works for two years now.

Meanwhile Emanuel's office also announced that Chicago hotels are pledging $500 million in rehabs and upgrades "to help bolster the local convention industry as city leaders strive to attract more trade shows."

Mayor Rahm Emanuel's office made the announcement Friday. Hotels making commitments include the Chicago Hilton, Hyatt Regency Chicago, Strategic Hotels & Resorts, Inc. (Fairmont Chicago and InterContinental Chicago hotels) and Starwood Hotels & Resorts Worldwide (W. Weston and Sheraton hotels).

Emanuel also wants to increase the city's bed tax by 1 percentage point, jacking it up to 4.5 percent. When state and other bed taxes are included it would make Chicago's overall rate to 16.4 percent, one of the top three in the country.

It doesn't seen like it, but the moves will help tourism throughout the state, including Southern Illinois. Chicago convention business is the single biggest factor in the state's bed tax receipts. When Chicago hurts there's less money for tourism promotions throughout the state, less money for state's tourism grants that help fund local tourism bureaus, marketing campaigns and development projects.

Thursday, October 13, 2011

State to Dedicate Extension of Tunnel Hill Trail to Eldorado

Local and state officials will officially dedicate the newest segment of the Tunnel Hill State Trail Friday at 4 p.m. in Harrisburg. The segments starts at the north end of Harrisburg, crosses the Saline River on a new bridge and travels through Muddy and Wasson before connecting with an existing network of bike trails in Eldorado.

View Larger Map of the Tunnel Hill State Trail at the Middle Fork of the Saline River by Harrisburg

The showpiece of the new path must be the bridge spanning the Saline River at Muddy, where great blue herons may be seen trying their luck with the little fish flashing in the water below.

"The scenery is spectacular throughout the bike trail and the bridge enhances the beauty of the trail," Harrisburg Mayor Eric Gregg said. "I think this is something we can build on and I'm interested in working closely with (Eldorado) Mayor (Rocky) James and everybody along the bike path."

The ribbon cutting will take place where the trail crosses Veterans Drive at the Small Street intersection.

South of Harrisburg the state maintains a 45-mile segment through Tunnel Hill, Vienna, and finally ends at the Cache River Wetlands Center at Perks.

The trail is crushed limestone in rural areas, and concrete in Harrisburg and Eldorado.

Wednesday, October 12, 2011

New Hotels to Add 165 Rooms in Marion

The addition of a new Holiday Inn Express with 101 rooms and a new Comfort Inn with 64 rooms will take Marion's room count from 1108 to 1273, when both projects are open by early 2012. Williamson County's count will grow from 1246 to 1411.

The top seven hotels in Marion have averaged around 78 percent of the motel tax receipts over the past five years. The seven are Comfort Suites, Country Inn & Suites, Drury Inn, Fairfield Inn, Hampton Inn, Holiday Inn Express (soon to change to another flag when the new hotel opens), and Quality Inn. When they open the Big 7 will become the Big 9.

The other motels in the city generate about 6 percent of the overall bed taxes. That leaves the remaining lodging establishments outside the city limits making up about 15 percent.

To put it in perspective, all the lodging establishments in the county generated roughly $700,000 in the 5 percent bed tax levied in calendar year 2010. Forty percent, or about $280,000 went to the Williamson County Tourism Bureau and 60 percent, or about $420,000 went to the Williamson County Events Commission to pay debt service and mandatory reserves on the Williamson County Pavilion.

Since then the city has taken over the Pavilion and levied a 3 percent bed tax on city hotels that preempts the county's 3 percent bed tax for the Pavilion within the city limits. The city issued new bonds to take the place of the outstanding debt. The biggest difference in terms of operational benefit is that any excess bed tax collected by the 3 percent city tax can be used by the city for operations. Under the original bonds, the excess funds went into a separate Bed Tax Savings Account that couldn't be touched short of a major disaster.

The Big 7 hotels have 640 rooms. Adding another 165 is a 25 percent increase. If the new hotels can add to the market rather than just eating into the existing hotels' market share (and that's what their competitors are hoping), then that could be a big kick of revenue for the tourism bureau and the Pavilion.

A 25 percent increase of the Big 7's 85 percent of the market using 2010 figures comes to just under another $60,000 for the bureau and almost another $90,000 for the Pavilion.

Being realistic the figures might be half that amount with the shaky economy. However historically bed tax revenues were up nearly 50 percent between 2010 and 2000 in Williamson County.

Even better, the larger hotels in Marion often employ far more employees than most people realize as they have to remain open 24 hours a day, seven days a week. Other than the management positions, it's not the highest paying jobs in town, but in this economy, every job counts! 
Looking Back — 2000 to 2010

The county started the 21st Century with 1303 rooms. The county lost 200 when the old Holiday Inn/Travelodge/Executive Inn finally shut its doors in 2004, and another 53 rooms or so when Jim Zeller bought the back wing of America's Best Inns and tore it down for the new Country Inn and Suites in 2008. Another 20 rooms at SIU Touch of Nature aren't counted any more when the university decided it was no longer going to collect bed tax back in 2007.

Meanwhile Lake Tree Inn & Suites opened in 2000 with 20 rooms, Fairfield Inn opened in 2004 with 89 rooms, Hampton Inn expanded mid decade with another 20 rooms, and Country Inn & Suites opened in December 2008 with 69 rooms.

The decade also saw the expansion of the specialty lodging market. Olde Squat Inn already had 5 cabins and added two more. Devil's Kitchen Cabins opened with two cabins in 2006 and are now up to three. The Four Seasons Campground in Herrin added two cabins in 2006, though in recent years they've been turned into apartments.

The first traditional bed and breakfast inn, Oakridge Manor B & B opened in 2004 with four rooms and they've since added a fifth. Mary's Bed and Breakfast in Herrin opened in 2008 with two rooms and Jasones Bed and Breakfast in Marion opened with five rooms in 2010.

The county also saw its first legal vacation rental, the Carriage House open down at the Lake of Egypt in 2008. Regrettably, there are at least two more on the north side of the county line down at the lake that aren't legal having failed to pay the county any bed tax.

Overall specialty lodging has gone from 1/10th of one percent to about 1.3 percent of the market in the last decade.

A Missed Opportunity

Regrettably in August the county board voted to eliminate the county's 3 percent bed tax after the city took over the Pavilion. Far from being next to nothing, the county threw away about $63,000 in economic development funds that could have been spent on brick and mortar tourism development projects in the county. The tax affected 10 properties, including two modern motels, four older motels, two properties with 10 cabins, two bed and breakfast inns and one vacation rental.

Potential development projects could have included a system of tourism highway signage on county highways and roads to compliment what's already on the state highway system, interpretive signage at county historic sites, capital funding for repairs to public and non-profit tourism sites, capital funding for the proposed tourist information center next to the chamber office, engineering costs for development of bike trails connecting to the Tunnel Hill State Trail, or proposed bike trails in Crab Orchard National Wildlife Refuge, and matching funds for larger state and federal development grants.

The 3 percent county bed tax had been added to pay for the Pavilion, a big capital project that was originally proposed to help tourism development. When the city took that over, the money should have been moved to something similar. Although the bed tax is collected by local lodging operators it's paid by out-of-town visitors. Lowering the bed tax rate doesn't attract any more visitors to the area, it just throws away thousands of dollars that would have been coming to the county but now won't.

Wednesday, October 05, 2011

Construction Updates in Marion

A few pictures from earlier today.

The new Holiday Inn Express on The Hill is up to three stories now. The goal is four stories and 101 rooms.

Progress continues on the former Marion Truck Plaza, purchased last month by Pilot Travel Center.

Last picture is the Comtech building on DeYoung St., a few blocks west of Court Street (Illinois Rt. 37).

With the expansion of Route 13 to six lanes from the interstate east to Route 37, all the buildings on the north side of the street from E. N. Baker Cash Chevrolet will be moved or demolished.

It looks like a little recycling work has begun as workers dismantled the metal roof of the building this afternoon.

This used to be a restaurant in the 1960s when originally built. I think it lasted until the early 70s, but I'm not sure.

Tuesday, October 04, 2011

Two Buildings Get Rehab, One Torn Down in Downtown Marion

Again, it's not exactly tourism, but two projects on North Market Street in Marion are changing the views in the historic downtown shopping district.

Hurst-Roche Engineers, Inc. bought both the Duty and Heyde buildings in the 200 block of North Market Street last year and shortly thereafter began renovations.

They've now moved their Marion operations into the Duty Building on the corner. The Marion location is one of six in Illinois and Missouri.

The south wall includes Marion's third exterior mural downtown. This time showing three figures that could be workers for the firm.

The figures are similar to the scenes in Greenville, Illinois.

The building has recently housed furniture stores in the last couple of decades, but before that it was home to a series of pharmacies since the beginning of the 20th Century.

Delos L. Duty, former owner who gave his name to the building when he added the second floor nearly a century ago, started out as a pharmacist there in the early 1900s. He became an attorney in the early 1910s and Williamson County's state's attorney in the turbulent 20s.

He began a high profile murder trial on the first day of his term in 1920, which resulted in a death penalty against Settimi DeSantis, which will be the subject of a new book out later this year by this author tentatively titled, "DeSantis the Doomed and the Curse of the Black Hand."

Duty went on to prosecute union miners following the Herrin Massacre and become a thorn in the side of the Ku Klux Klan during the Klan War of the mid 1920s.

Down the street on the other side in the 300 block, Meridith Ashe, owner of M Clothing & Accessories in the renovated Williams Hotel building next to Bennie's Italian Foods has torn down the old Book Exchange building at 301 N. Market on the corner, but is planning to keep the building in between at 303 and 305 N. Market St.

At one point she had considered plans for a bed and breakfast on the second floor of the Williams Hotel above her clothing store, but ended up with apartments instead.

As to her future plans for the remaining building and the corner lot, nothing is set in stone.

"Right now, I'm not sure, since I just finished renovations [on the Williams Hotel]," Ashe said this afternoon.

As to the corner lot, "for right now, we're just clearing it off and planning."

She's wanting to keep the middle building and eventually renovate it.

UPDATE — Oct 6, 2011
For more on Ashe's business, check out this feature on her from earlier this summer in the Southern Illinoisan.

Monday, October 03, 2011

Sunday Liquor Sales Move Forward in Metropolis

The move to allow Sunday Liquor Sales at Metropolis restaurants could pay off for the city's establishments in a matter of days rather than weeks according to a report Sunday on News 3.

Marion made the change a couple of years ago and restaurants predicted a big increase in Sunday revenue.

Marion and Carbondale Get $2.5 Million for Projects

They're not exactly tourism developments, but both Carbondale and Marion will be building new aquatic facilities thanks to a new state grant announced today by Gov. Pat Quinn.

Quinn announced 22 projects awarded funds in the Park and Recreational Facility Construction (PARC) Grant Program.

The funds are for "targeted investments to eligible local governments for acquisition, development, construction, rehabilitation or other capital improvements to park and recreation facilities in Illinois."

The Department of Natural Resources oversees the grant program and will reimburse "grant recipients up to 75 percent of approved project costs with up to 90 percent reimbursement available to local governments defined as disadvantaged."

The two Southern Illinois proposals were both development projects. Carbondale Park District will get $2.5 million to construct an outdoor aquatic center which will feature one leisure zero-depth entrance pool and one competition pool with a diving well.

View Projects Underway in Marion in a larger map

Marion will get the same amount to go toward constructing a new community recreation center at the site of the old Marion Memorial Memorial Hospital. The building will have an indoor swimming pool, basketball, volleyball and racquetball courts, restrooms, locker rooms and a wellness center office space.

Marion Mayor Bob Butler described the proposal to the Marion Daily Republican last December.

"I think it should be the type of facility that will appeal to people of all ages and will provide a broad and diverse type of activity," Butler said.

The former hospital site is five acres on West Main Street, just west of Court Street. The city owns the land.

"It is a good utilization of that property," Butler said. "It will bring a facility to the city that is really needed. We don't have anything in one location that would provide the activities and the endeavors it will provide."

The city at the time stated the plans called for $3.5 million, 20,000 square-foot facility. Much of the remaining funds would come from the new Hub TIF district. Baysinger Design drew up the original plans.

Williamson County hasn't had any racquetball courts since May 29, 1982 when the Airport Racquetball Club became one of the first casualties of the Marion tornadoes of that day.

The project will be the fourth indoor aquatics center though for the county, and the third in the modern era. John A. Logan College operates one currently and another is planned for Herrin on Bandyville Road.

The county's first indoor pool was once located at Cagle Park, a 10-acre amusement center on Route 13 (now Main St.) west of Halfway Road, back in the 1920s. That park also had a dance hall and game rooms. The Klan and Prohibition officers raided it a couple of times. The owner, Hosea Cagle, died during that era after driving through a closed section of the highway and getting clothes-lined on a cable the contractor had used to block off traffic.

UPDATE — Oct. 5, 2011
The cost of the overall project seems to have been lowered to $3 million in the stories this week rather than the $3.5 million from last December. Not sure about the difference, except the new figures might not include the cost of the land, which the city would have been allowed to count as an in-kind match in the grant application.

Click on the links for the stories in the Marion Daily Republican and the Southern Illinoisan.