Toledo's venues call foul over plan to levy ticket taxes

3/4/2010

Two days after Mayor Mike Bell threw a fastball high and inside at the Toledo Mud Hens purse strings, the team quickly charged the mound.

"Family Ticket Tax," with a huge red X through the word tax and a message to contact the mayor and Toledo City Council, cycled yesterday through the normal advertisements for tickets on the field's scoreboard.

In fact, the ballpark's executives are so set against Mayor Bell's proposed 8 percent tax on sporting and other events that they are considering absorbing the tax rather than passing it on to ticket buyers.

"That is a last resort," said Joe Napoli, Mud Hens president and general manager, who has the same positions with the Toledo Walleye. "The first resort is to convince the mayor's office and city council that this is just not a very good idea."

Pete Gerken, president of the board of Lucas County Commissioners, said he has asked John Borell, assistant county prosecutor, to research if the city can legally tax tickets to a venue completely owned by the county.

"My first inclination is they cannot," Mr. Gerken said. "The county of Lucas is the owner of the arena, the Mud Hens, and the Walleye, so I am unclear and unsure that even a home-rule entity like Toledo has the ability to put what amounts to an excise tax on a county government."

The proposed tax, which must be approved by council, is a small part of Mr. Bell's plan to balance a $48 million deficit. It is expected to generate $1 million for the budget-beleaguered city.

Mr. Napoli and others who run sporting and entertainment venues said pumping that $1 million into Toledo's general fund could mean a lot less for downtown businesses.

"Let's say we have a modest decrease of 5 percent at the Mud Hens and the arena. That's 52,000 fewer visitors to downtown Toledo," Mr. Napoli said. "More importantly, that's over $9 million that will not be spent at the bars, at the restaurants, at the retail establishments."

He arrived at the $9 million figured based on county estimates of purchases made by visitors to the Lucas County Arena.

"Here we are in the deepest and longest recession since the early 1970s. There is not a business that would raise ticket prices 8 percent during that period," he said.

Mr. Napoli said the Mud Hens and Walleye would almost have no choice but to absorb the tax since it would probably translate into a devastating drop in ticket sales - especially season tickets, which would cost $196 more with an 8 percent tax.

Steve Miller, general manager of the SeaGate Convention Centre and the arena, is joining a growing coalition against the proposed tax.

"We are having great success at the arena since it opened and [the performers] have choices where to play, and Michigan doesn't have a tax," he said. "They could move their acts there because it is a competitive issue when we book the Globetrotters, Disney on Ice, Monster Trucks, and concerts, in addition to the Walleye."

Michigan Gov. Jennifer Granholm last year proposed a 6 percent tax on live entertainment to raise more than $87 million for the state's budget in fiscal year 2010, but it was not enacted.

The Bell administration is drafting legislation to authorize its version of such a tax and what venues would be affected.

The mayor's office is considering exempting high school and college sports and is undecided on movie theaters.

Admission to the Toledo Zoo would not include the tax, but ticket sales to concerts there probably would, Jen Sorgenfrei, Mr. Bell's spokesman, said.

Mayor Bell said the tax is modest and other cities have used something similar to raise money.

Cleveland, for example, has an admission tax but it excludes nonprofit organizations, which in Toledo would include the Mud Hens, the Walleye, and the Toledo Symphony.

"I am highly sympathetic to the city and their budget challenges. However, I don't fully understand how they would implement it," Bob Bell, president of the symphony, said. "We operate very close to the edge in our financial operations and we, for the first time, had to open up our contracts and reduce our salaries 8 to 12 percent."

Mr. Bell said the symphony would have to pass the tax on to ticket buyers.

"If we could go out and raise our ticket prices by 8 percent for the benefit of our own financial challenges, we would love that," the symphony president said. "But the truth is if we have an 8 percent increase in our tickets, there will be fewer people buying tickets."

Chris Etts, owner of Sidelines At The Arena restaurant and bar, fears the tax would eat into his business.

"I am sure it would have to," he said. "That is not a lot of money on a $10 ticket, but some of the bigger tickets, if you go with a family of four, that can be $20 that they were planning to spend on something to eat."

The mayor said he fully expects people to object to his plan to balance the budget.

Toledoans who work outside the city don't want to pay more income taxes, many seniors have objected to a hike to $15 in the monthly trash fee, and city unions plan to fight an effort to force concessions without negotiations.

Ron Drager, owner of the for-profit Toledo Speedway, said he reduced ticket prices to draw customers and the tax would have the opposite effect.

"When we hear there may be a tax or fee for admission, it goes against everything we want to accomplish," Mr. Drager said. "If we increase admission prices, we know we are going to see a decrease in a ticket sales."

Contact Ignazio Messina at:

imessina@theblade.com

or 419-724-6171.