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Published: Saturday, 12/30/2006

Audit raises concerns about welcome center

BY JIM SIELICKI
BLADE STAFF WRITER
The welcome center, which opened in 2003 on State Rt. 53 near State Rt. 2, lost more than $330,000 in 2005. The welcome center, which opened in 2003 on State Rt. 53 near State Rt. 2, lost more than $330,000 in 2005.
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Ottawa County's welcome center, opened three years ago to help promote the Lake Erie region's attractions, has become a financial burden that is approaching insolvency.

The chief culprit appears to be fewer people who spend the night and pay the 3 percent bed tax that funds the Ottawa County Visitors' Bureau, which is housed at and operates the welcome center.

In 2005, the bureau racked up a $337,777 loss, which state auditors said raises doubt about its ability to continue functioning.

The bureau's executive director, Larry Fletcher, said the immediate solution is to spend less while seeking a long-term fix.

"The first thing [we realized] was the original business model wasn't working and that we needed to look for a new direction," he said.

Mr. Fletcher took over bureau operations a year ago; he's one of a series of executive directors in recent years.

A $175,000 bank line of credit and a $75,000 loan from the county commissioners have kept the bureau afloat until a new business plan can be developed.

Steve Arndt, county commissioner and a new member of the bureau's board of trustees, said the county had little previous oversight over the bureau. But as a condition of the loan, the county got a seat on the newly reorganized board that will hold its first meeting in January.

"There needs to be some significant changes," Mr. Arndt said. Among those changes, he said, will be a search for funding sources beyond the bed tax.

In June, 2003, the agency moved from a small storefront operation in Port Clinton to a nearly $3 million Lake Erie Islands Regional Welcome Center on State Rt. 53 near State Rt. 2.

The 8,720-square-foot center, with its dramatic 42-foot-high wall, has an equally imposing cost. The monthly mortgage payment is $7,460 with $4,817 more going toward the monthly lease of the land, according to the state audit released earlier this week.

"It was built at a time that we have to admit was a little different when there were many more people coming here," Mr. Fletcher said. "The number of people coming here [for overnight visits] is not enough."

One example is the failure of Harbor Lights Landing, a development of shops across the highway from the visitors center, which has not drawn the number of people anticipated when it was built, he said.

Ann Duez, president of the Marblehead Peninsula Chamber of Commerce and owner of a bed and breakfast, said the bureau's focus - to assist visitors in finding lodging and providing travel tips - has changed.

"We went from a little tiny office to this grand center," Mrs. Duez said. "I think everyone had to go through this learning curve. It's a bigger picture that we're looking at."

The state auditor's office noted that the bureau has experienced financial difficulties during the past years in part because of the "seasonality of visitation in Ottawa County" and its impact on the bed tax, its primary source of funding.

The tax, imposed in 1986, collects 3 percent on overnight stays in the 2,000 rooms available in hotels, motels, bed and breakfast inns, and condominiums in the county.

The bureau does not get other tax support. After the tax income, the next largest source of income was $161,494 received in 2005 from advertising in its Great Lake Adventure guide.

Last year's income was $734,032. Expenses were $1,048,809.

The state auditors cited no wrongdoing in their report, but noted that "bed tax revenues were not as high as the original projected business plan for operation of the bureau."

Mr. Fletcher blames a softening of the tourist market for the problem, although he admits finding hard data on the number of visitors is difficult.

Finances are being closely monitored, said Mr. Fletcher, the former director of the visitors bureau in Licking County.

The bureau has cut $53,000 from its $1 million operating budget, reduced staffing, and trimmed hours to cut costs.

A finance committee was formed with nonboard members that Mr. Fletcher said will allow the trustees to draw on the expertise of more people.

Mrs. Duez, a member of the old board, is encouraged by the expanded panel she'll be part of. Her goal is to obtain more rental use of the building and its conference facilities.

She said the bureau's role has expanded beyond assisting visitors in finding lodging. She wants to see a bigger role for stores and shopping.

"It may have originally started there, but it's a much bigger picture now," she said.

Contact Jim Sielicki at:

jsielicki@theblade.com

or 419-724-6078.



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