Sylvania council debates hotel tax increase

The Wingate hotel in Sylvania.

The end of a five-year moratorium on a 3 percent hotel and motel occupancy tax created focused discussion between a representative of Sylvania's only hotel, Wingate by Wyndham, and members of Sylvania City Council, yesterday.

Representative Lea McLaren, from River Center LLC, which manages the hotel, told council members that the projected increase in the tax - bringing it from 16.75 percent, to 19.75 percent - will be detrimental to business and will send customers to competing hotels. The City of Sylvania implements an additional 3 percent “bed tax,” which has been on hold for the past five years, after the city deferred it.

The 19.75 percent is made up of both local and state sales taxes. 

Ms. McLaren said council's decision not to defer the additional 3 percent tax this time around might hurt the hotel, and asked the city not to implement it.

“We really can't see to lose more business to these surrounding cities. These guests are our guests. They're Sylvania's guests...and we really do not want to be penalizing our guests,” she said.

“We believe we have been a significant addition [to the city]. We feel like there's enough vacant buildings and we don't want to be one of them...” Ms. McLaren said.

She said business for the Wingate has seen a slight uptick in business for 2012, but that the business is also experiencing an increase in competition, citing Perrysburg's Hilton Garden Inn, as a major competitor.

Council discussed the possible removal of the additional tax, but did not make any decisions. Council member Katie Cappelini wondered if the management company knew about the change in taxes before the hotel was built.

“Before the hotel came into town, we met with them and they understood at the time that we were going to impose a hotel/motel tax, so they were aware that we were going to impose that 3 percent tax,” city law director Jim Moan said.

Mayor Craig Stough was sympathetic and open to revisiting the issue, but noted that council is already searching for revenue because of tough economic times. The additional tax would bring in about $70,000 more in annual revenue, and council planned to use it to fund various community projects.

Council member Doug Haynam said finding such funding is a constant battle.

“...We also face some very serious budgetary constraints. This year, we have identified a relatively new source of revenue from the expiration of the hotel and motel tax exemption, and it happens to provide about $70,000 of projected revenue in 2013...” Mr. Haynam said.

When Ms. McLaren asked when council might have a decision on whether they might remove the extra tax, the Mayor said the management company should “plan on collecting it, at least for a little while.”

The city will begin collecting the tax on the hotel Jan. 1. More discussion is slated for the next regularly scheduled meeting, in January.

Also tonight, council voted unanimously to provide community funding to the following Sylvania civic groups:  $15,000 for Sylvania Community Action Team, $30,000 for Sylvania Area Family Services, $16,000 for the Sylvania Area Chamber of Commerce and $9,000 for the Sylvania Arts Commission.

“We are fortunate to have some significant resources and some savings that we've accumulated over the years...and if we didn't have that, we wouldn't be able to fund these,” Mr. Haynam said.

Contact Kelly McLendon at kmclendon@theblade.com or 419-206-0356 or on Twitter at @MyTownSylvania.