City Beat: Council votes to send 3% lodging tax increase question to Springfield voters

Springfield City Council voted July 28 to approve a one-reading bill that will put a 3% lodging tax increase question on the November ballot.

The city will ask voters this fall whether tourism taxpayers should help fund a $175 million downtown convention center. Along with a $209 million hotel complex that could be built near the proposed convention center, the proposed project could drive $1.3 billion in new visitor spending – and $68.7 million in net fiscal impact – over the 30 years following construction. That’s according to a consultant’s report commissioned by Visit Springfield, Missouri and presented to council in July. 

The vote on the special tax proposition ordinance was 8-0. Councilmember Brandon Jenson was absent.

For more than two decades, the city’s lodging tax has been set at 5%, after voters authorized increases to the original 1979 tax, in 1998 and 2004.

If voters approve the question in the special ordinance adopted by council July 28, Springfield’s lodging tax on hotel rooms, short-term rentals and other places where “transient guests” stay for less than a month will total 8%.

Springfield’s effective tax rate on temporary lodging would climb to 16.1%, up from 13.1% today. City officials say that’s lower than similar guest license taxes in cities like St. Louis (17.93%) and Kansas City (16.48% plus $3 per room per night).

Council’s move follows state government actions this spring. With House Bill 7, Jefferson City lawmakers earlier this year approved $30 million in state funding toward a “regional convention center complex” for Springfield. But on June 30, Missouri Gov. Mike Kehoe restricted the funding along with 31 other state spending restrictions. While the restriction isn’t a veto, it means Kehoe can release the funding when he chooses. 

City officials have emphasized their view that timing is important in getting the governor’s thumbs-up for taxpayer convention funding.

“A critical driver of the city’s timing is the opportunity to secure $30 million in state funding for the event center project, currently on a state withhold list pending stability of state revenues and demonstration of a local $30 million dollar match and project readiness,” city officials said in a news release issued shortly after council’s July 28 vote.

Several speakers turned out for the public hearing ahead of the vote, among them Tracy Kimberlin, former director of the Springfield Convention & Visitors Bureau, now called Visit Springfield, Missouri.

“This is a demand generator that we do need for Springfield, Missouri, that will help the hotels, even though some of them may think the opposite of that,” Kimberlin said.

Kimberlin said he worked some 30 years of his career trying to get a convention center going in Springfield. He credited the recent work of Missouri state Sen. Lincoln Hough, R-Springfield, and Kehoe’s reported support for a convention center.

Of the $30 million in state funding at stake, Kimberlin said, “That’s a heck of a carrot to dangle out there to get this project going.”

Another supporter, Sean FitzGibbons, executive director of the History Museum on the Square, told council that adopting the guest license tax increase would be a “bold” move.

“It shows that we’re thinking ahead,” FitzGibbons said. “We’re willing to lead with vision, not just maintenance.”

Eric Pauly, a member of the Planning & Zoning Commission and former council candidate, told council he wasn’t there to discuss the pros and cons of a convention center or a potential location downtown.

But Pauly expressed concern about reports that the three-quarter-cent tax revenue approved by city voters in November 2024 might go toward the proposed convention center’s funding stack.

Last year, Pauly was a member of the 30-member Citizens’ Commission on Community Investment that developed the tax proposal, dubbed Spring Forward SGF by city officials.

“We have approached the voters of Springfield with this promise, of this is where the money is going to go to, within the community itself, and it wasn’t actually intended to go to a convention center during any of those discussions that we had,” Pauly told council on July 28.

According to the commission’s final report from June 24 that recommended action to council, a quarter-cent of the Spring Forward SGF tax should have gone toward public safety efforts, while a half-cent should have gone toward “additional public initiatives, recreation and investing in the next generation.”

As approved by voters, the half-cent portion of the tax sunsets after 10 years; city officials estimate it will generate roughly $30 million per year. 

Alcohol event-permitting bill postponed
At its next meeting on Aug. 11, council is expected to vote on an amended version of an alcohol event-permitting bill.

The bill would remove Springfield’s 12-event-per-year cap on alcohol-serving festivals or other events permitted in downtown Springfield and on historic Commercial Street.

With an amendment offered by Mayor Jeff Schrag on July 28, beers of up to 8% alcohol by volume could be served at events like the annual Birthplace of Route 66 Festival, along with wines up to 14% ABV. On July 28, council voted 6-1 in favor of Schrag’s amendment to relax limits on alcoholic beverage potency that were outlined in an earlier version of the bill members debated on July 14. 

Schrag’s amendment would change the alcohol event bill in two ways: by raising the alcohol limit for beer to 8% from 5%, and by changing the “alcohol metric” of both beer and wine to ABV from alcohol by weight.

Schrag, who founded Springfield-based Mother’s Brewing Co. LLC in 2011 and remains a minority shareholder of the business, argued that “almost no craft brewer in the city limits of Springfield brews beers at 5%. The craft standard is 6[%] and 7[%], typically. And I wanted to make sure that local craft breweries are included in this.”

Schrag also said measuring alcohol by volume, as opposed to weight, “is the industry standard.”

He noted that alcohol by weight yields a lower percentage figure to describe a beverage than alcohol by volume.

“Your classic Budweiser, Yuengling, those mass-produced beers are typically the ones at 5%,” Schrag said. “Generally, alcohol by weight, you subtract a little bit to get to alcohol by volume. Bud Light is about (4.2%), and so it’s about (3.2%) when you switch it over.”

The council vote outcome was more complex than is typical for Springfield’s elected leadership. Zone 3 Councilmember Brandon Jenson was absent from the July 28 meeting, and General Councilmember Craig Hosmer voted against the amendment after expressing concerns about the possible impact of 8% beers on patrons. Hosmer asked for a Springfield Police Department representative to be present at the upcoming public hearing: “I would like to have someone with SPD that understands the level of intoxication and what that means as far as changing that and how that’s going to impact patrons.”

Zone 1 Councilmember Monica Horton abstained from voting. Horton wrote in an email to Springfield Business Journal that she “definitively” intends to vote on the bill Aug. 11. She said she abstained from the July 28 vote because “Councilmember Hosmer’s lingering inquiries for the police department went unanswered about the impacts of increasing the alcohol limit. I’d be interested in knowing how the Police Chief will respond.”

Council will hold a public hearing on Schrag’s amendment at its Aug. 11 meeting. A vote on the council bill is expected following that public hearing.

Rezonings for Mercy land
Also on July 28, Council voted 8-0 to approve five bills that rezone 110 acres across five parcels of land including Mercy Orthopedic Hospital Springfield, which is located at 3050 E. River Bluff Road in Ozark. Much of the acreage is undeveloped property to the west and south of the existing hospital. 

“I can tell you that we don’t actually have plans yet,” Mercy spokesperson Ettie Berneking wrote in an email response to an SBJ inquiry about future plans. “We just want to make sure that land is zoned correctly for future use if needed.”

The five bills change the land’s zoning to government and institutional use district. They also add a pair of conditional overlay districts that cover 57 of the 100 acres, comprising two of the five parcels located just south of the orthopedic hospital.

Previously, the area was zoned as a mix of planned development and GI. Located near the Evans Road overpass on U.S. 65, the land is owned by entities linked to Mercy including Tea Properties MO I LLC, Tea Properties MO II LLC and Mercy Health Springfield Communities.

Mercy officials “have no intentions of ever selling this property,” said Ricky Haase, a vice president and engineer at Olsson Inc., at a Planning & Zoning Commission meeting June 12. Commissioners voted 6-0 to recommend the rezoning plans.

Nonprofit zoning approved
Council voted 7-0 on July 28 to approve rezoning of 2.1 acres at 1414 E. Elfindale St. and 1405 W. Sunshine Street to GR, general retail. The land was previously zoned Planned Development No. 319, Planned Development No. 46, and Planned Development No. 46 Amendment 2. Guaranty Bank and Ozark-based NAP Legacy Real Estate LLC applied for the rezoning. Zone 2 Councilmember Abe McGull recused himself from the vote. He’s a member of the board of directors for Guaranty Bank, according to the bank’s website.

Shawn Berry, vice president and civil engineering manager with Toth and Associates Inc., said at a Planning & Zoning hearing June 12 that the applicant is the Child Advocacy Center. The nonprofit wishes to “expand the existing building there” and were advised by city staff to simplify the property’s zoning, Berry said at the P & Z hearing.

 Taxicab fees lifted
Council voted 8-0 on July 28 to temporarily suspend enforcement of the city’s vehicle inspection fee for taxicabs, in a bill co-sponsored by Councilmembers Heather Hardinger and Horton.

Meanwhile, the article of city code governing vehicles for hire including taxicabs, courtesy cars and airport limousines was referred to council’s Finance & Administration Committee for analysis. The committee includes Horton, along with Councilmembers Jenson, Hosmer and Bruce Adib-Yazdi.

According to background information assembled by city staff for council, Springfield hasn’t “comprehensively reviewed” regulations on taxicabs since 2016. More recently, council wants to review rules “for the local regulations for taxicabs to be consistent with modern technology, encourage passenger safety in a meaningful way and facilitate an even playing field for taxicabs and transportation network companies” such as Uber or Lyft.

As SBJ reported previously, Springfield Yellow Cab Co. Inc. owner Kyle Butrick appeared at a July 2024 council meeting to speak out on behalf of his company and its 90 drivers, who are independent contractors. 

Butrick argued that taxicabs should be subject to the same tech requirements as ride-hailing companies like Uber and Lyft. And, he told council, annual inspection fees imposed by Missouri and the city of Springfield can seriously add up: He referenced charges of $33 per taxicab inspection by the city, alongside $40 charged by the state of Missouri to inspect mechanical taximeters. Digital taximeters typically used by transportation network company vehicles allow integration with online payment systems and the precision of GPS for measuring distance, but mechanical taximeters don’t offer the same options.

“The [inspection] guys don’t really like to see our cabs,” Butrick told council on July 22, 2024. “They make the comments, ‘We don’t do Uber and Lyft; I don’t know why we’re doing you guys.’”