Reduced Travel Slows One Hamilton County Project But Not Another
The COVID-19 pandemic's impact on travel and tourism is having a major negative effect on Cincinnati and Hamilton County's transit occupancy tax (hotel tax) collections this year.
Officials told the Convention Facilities Authority Friday collections in Cincinnati for the second quarter were $422,000, which was a 50% reduction compared to the second quarter 2019. For Hamilton County, the number was $750,000, or a 72% drop from last year.
Leaders are hoping for an increase in the current quarter. They said that's needed in order to make sure there's enough money to make a debt service payment in December on the bonds issued several years ago to expand and renovate the Duke Energy Convention Center.
The CFA is also exploring refinancing or restructuring some of the convention center debt. It would bring some payment relief for the next few years, but it would also extend the debt and increase the cost of the borrowing.
Meanwhile, the reduced hotel tax revenues is forcing Sharonville to delay a planned expansion at the Sharonville Convention Center.
Mayor Kevin Hardman said officials will be monitoring travel and hope to move forward with the project in about a year.
"During that time, we will evaluate the condition of lodging tax receipts and convention center demand," Hardman said an email to WVXU. "We are optimistic that we will have a better handle of the forecast for these receipts by the third quarter of 2021 to resume financing and construction of the expansion."
The plan calls for doubling exhibition space from 20,000-square feet to 40,000-square feet. It would also include a ticket office, additional restrooms and more storage space.
The goal is to attract conventions and events that are too small for the Duke Center, but too large for the current space in Sharonville.
The reduced hotel taxes are not impacting a project to demolish the former Millennium Hotel in Downtown Cincinnati.
The Port is handling that project, and President and CEO Laura Brunner signed contracts for the demolish work Friday.
That work will likely begin in the next two months and take about a year to complete.
Plans are still being developed on how the former hotel will be demolished, but Brunner said a partial implosion is still a possibility.
The Port issued nearly $53 million in bonds to purchase the former Millennium Hotel and pay for demolition expenses.
The CFA agreed in January, before the pandemic, to use residual funds from the county's transit occupancy tax revenues as the source to back-up those bonds.
County Administrator Jeff Aluotto said there is a residual balance in that fund, and even with lower tax collections, the county should be able to meet those obligations and still have a reserve balance if the travel and tourism industry rebounds in the next two to three years.
The former Millennium site could be used for a new standalone hotel, expanding the Duke Center, or a combination of center expansion and a new hotel. The size for a new hotel ranges from 600 to 1,000 rooms.