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VOL. 127 | NO. 96 | Wednesday, May 16, 2012

Council Votes Down Bed Tax Increase

By Bill Dries

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Memphis City Council members voted down a proposed increase in the hotel-motel bed tax Tuesday, May 15, in a debate with local tourism industry leaders that focused just as much on high air fares into and out of Memphis International Airport.

Council member Edmund Ford Jr. originally proposed the 2.7 percent increase in the tax to finance the operation of city museums. But he said it could also be used to fund a $2 million deficit in the Memphis Convention Center budget the council learned about Tuesday in committee sessions.

Ford argued it wasn’t much compared to bed taxes along with other hotel-motel fees that amount to taxes charged in other cities. But local tourism officials argued an increase in the Memphis tax would make harder the already difficult business of competing for conventions.

Both sides cited the impact of high air fares.

“There’s our problem right there,” Ford said, in arguing the impact of the bed tax increase would be minor compared to air fares.

Quoting an average daily room rate of $74 for the Memphis market, Ford said the 2.7 percent increase would mean an extra 74 cents on the bill.

Doug Brown, general manager of The Peabody put it at $6 extra for an average four-day convention stay in a $200 a day room there.

“Six dollars is the tail wagging the dog compared to the air fare,” council member Shea Flinn countered.

But Memphis Convention and Visitors Bureau President Kevin Kane said the tax hike would be a “slippery slope” that could be enough to push away convention prospects who are already eyeing the soon to be completed convention center in Nashville.

“It’s a short term fix that will create a long term problem,” Kane said.

The ordinance failed by a 4-9 vote on third and final reading. The ordinance had been delayed for several months after it passed in February on second reading.

In other action, the council delayed a discussion of a proposal by Flinn to look into a red light district for strip clubs and adult bookstores. Flinn delayed a discussion of his resolution to appoint an ad hoc committee that would explore the idea as committee sessions on other unrelated topics ran long Tuesday.

The first half of committee sessions Tuesday were devoted to council budget deliberations.

The council approved a soup kitchen to be run by the St. Vincent DePaul Society at Monroe Avenue and Claybrook Street. The indoor kitchen will replace a nearby soup kitchen on Cleveland Street the Catholic charity has run for several decades.

The special use permit drew opposition from several neighboring businesses as well as the Memphis Medical Center. But it was approved on a 10-2 vote. The permit includes a four-year sunset provision meaning it will come back to the council for reapproval in May 2016.

The council also approved a grant contract between the city and the U.S. Department of Commerce for $2.1 million in funding for the Presidents Island rail project which is infrastructure for the Cargill Corn Milling operation.

The council also approved a planned development at the Crescent Center, at Poplar Avenue and Ridgeway Boulevard for two free standing restaurants.

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