City goes back to the drawing board after election defeat

Following voters’ Nov. 4 rejection of an additional 3% lodging tax to help fund a regional convention and event center, the city of Springfield announced the municipality would pursue alternate funding for the project.

Unofficial election results show 52.6% of ballots were cast against the measure. Greene County Clerk Shane Schoeller said voter turnout for the single-issue election was just above 7%.

The vision for the tax was to have visitors to the city who stay overnight, rather than local residents, help foot the bill for the $175 million center planned for an unannounced location in downtown Springfield.

Springfield City Manager David Cameron told Springfield Business Journal in a Nov. 5 interview that the city plans to explore other potential funding sources for the project.

Officials with the Springfield Area Chamber of Commerce, which endorsed the additional lodging tax, said its passage would have raised $4.4 million annually.

With that funding avenue defeated, the city is still $144 million short of the amount city consultants said would be needed for the convention and event center. So far, the city has secured $30 million approved in July by the eight-member Citizens’ Advisory Board from a half-cent portion of a three-quarter-cent sales tax approved by voters last November, as well as $750,000 from the city’s tourism and convention fund.

Discussions to build a convention and event center – alongside a center-connected hotel, estimated at an additional $209 million – began in earnest publicly this spring, followed by an allocation of $30 million in funding that was included in Missouri’s fiscal 2026 budget; however, those funds were classified as restricted by Gov. Mike Kehoe in June, and Kehoe will decide whether or not to release them. That decision must be made before the next fiscal year starts in July 2026.

Voters’ rejection of the lodging tax could imperil the chances of the funds being released, according to an official with the governor’s office.

In an emailed statement, Madelyn Warren, deputy communications director for Kehoe, indicated to SBJ that the governor was aware of the ballot measure’s failure.

“Gov. Kehoe believes a new Springfield convention and event center is a worthwhile project; however, last night’s results were certainly a setback,” Warren said in the statement. “While city leaders put forward a local funding plan that was not accepted by the voters, the fact remains that a project of this size requires local funding to complete.”

She added that Kehoe and his team look forward to working with Springfield officials as they identify alternative mechanisms to secure the local funding for the project. The convention and event center was promoted as an economic engine for the city with the potential to bring in $1.3 billion in new spending over a 30-year period, according to the consultant’s report, or more than $125,000 per day, according to past SBJ reporting. The report also projected an additional $68.7 million in tax revenue over 30 years, including city sales tax, hotel room tax and property tax.

Alternative funding uncertain
What an additional funding source might look like is still up in the air.

Reached as he prepared to enter an election debriefing the morning of Nov. 5, Cameron said the city does not have a Plan B at the ready.

“There was not a Plan B. If there was, that would be disingenuous and disrespectful to the voters,” he said. “We worked from this one plan since my second day with the city.”

Cameron’s July 7 start in his city manager job coincided with a presentation of a report by Chicago-based consultant Hunden Strategic Partners Inc. to recommend the downtown event center.

Cameron said the city is not deterred by the vote on a project that has been talked about in the city for three decades.

“We have to see what options there are,” he said.

Cameron said the proposed tax was a material piece to fund debt service for the proposed facility, and the voter refusal requires a pivot. He said the city needs to demonstrate that it can deliver the project.

“The governor did state that the release of funds was not predicated upon the outcome of that vote, but for us it was a very material piece of the funding model,” he said.

As the city reconsiders the capital stack, he said, discussions center on community improvement districts, tax increment financing, Chapter 100 bonds and other alternative funding models.

“Because it was moving so fast, a lot of those cap stack questions had not been completely answered,” he said. “Those were pieces to help mitigate the risk, but it’s not $4.4 million.”

In a July 22 council luncheon meeting, Amanda Ohlensehlen, the city’s director of Workforce and Economic Vitality, gave a presentation on funding mechanisms in play for the project.

The proposed funding stack also includes reallocation of the part of existing lodging tax revenue that is currently dedicated toward Jordan Valley bond debt that is scheduled to retire in 2028. That revenue stream will be freed up when the bond debt is satisfied and can be redirected, in full or in part, toward the convention and event center project, she said.

Ohlensehlen also said additional public-private partnerships were under development, though she did not give details.

Cameron said that in his career, he has never launched a project as quickly as this one, making it challenging.

“Last night was difficult and disappointing,” he said. “I had no presumption that it would pass, but we believed we had enough out there.”

In the city’s news release, Mayor Jeff Schrag said the project would be a boon for economic development in the area.

“This is a once-in-a-generation opportunity to reimagine what’s possible for Springfield,” Schrag said in the release. “This center could boost our economy, strengthen our tourism industry and give residents a place to gather, celebrate and connect.”

Springfield City Council unanimously passed an ordinance July 28 to put the question to the city’s voters. The 3% tax would have been in addition to an existing 5% city tax and a base sales tax rate of 8.1% that includes city, county and state taxes. Had it passed, the additional tax would have brought the total lodging tax to 16.1%.

Real estate talks
In a pre-election interview on Oct. 30, Gov. Kehoe told SBJ that the city is amid real estate dealings for the potential regional convention and event center. While not providing specifics, he said, “There are some real estate acquisition parts we’re still working out.”

“My last conversation with the mayor, there’s some pieces they’re still working out that they’re not ready to talk about publicly,” Kehoe said. “Not that they’re trying to hide something; they’ll be fully out in the open. But when you’re dealing with a real estate deal or you’re negotiating for a piece of property, sometimes those things are something that has to happen before the rest of the work.”

Schrag told SBJ he could neither confirm nor deny that the city is in real estate negotiations.

“Mayor Schrag and I have been in constant communication on that specific piece,” Kehoe said. “That’s what we call a withheld, so it didn’t get vetoed out of the budget, but it is something that was very important to your Springfield-area legislators, both Democrat and Republican, and specifically Sen. [Lincoln] Hough, who was the appropriations chair for that particular piece.”

In the Oct. 30 interview, Kehoe did not indicate whether passage of the tax would be a requirement for him to release the state funding.

“I think everybody needs to feel like they have a path to get there before we look at what the opportunities are to release the funding that’s in the budget,” he said.

No architectural drawings have yet been prepared for the proposed convention and event center. Because of this, SBJ asked Schrag how confident he is about the $175 million price estimate.

“At some point, we’re going to know how much money we have, and we’re going to build it to that,” he said. 

He added that funding will determine the final product: “I’m very committed to not being a pie-in-the-sky guy, saying, ‘Oh, we’re going to build this Taj Mahal, this monument to Springfield, this Queen City Center – cost be damned,’” he said.

Added Schrag, “You figure out what you can spend and do the best you can with that, knowing you’re going to have things like cost overruns and having contingency funds.”

Route forward
On Nov. 5, the day after the election, Councilmember Brandon Jenson hosted a town hall meeting that culminated in a question-and-answer session.

West Central resident Rob Ybañez identified himself and lobbed the first query.

“It seems like there’s still plans to try to have that be built one way or another, and I’m just very curious to know why that’s such a fixation on the city, to invest in these things when there are so many other issues that could be prioritized over that,” he said.

Several other community members chimed in with remarks like, “Yeah,” and, “I have the same question.”

Jenson said he could speak only for himself and not the other council members.

“This sales lodging tax was a pretty important component of how we would finance the debt that would be necessary to construct the facility,” he said. “It is definitely not possible to fund this, as I understand it, without a stable, additional source of revenue beyond what’s currently available to the city.”

Jenson said the only way to move forward is to take the failed tax as a lesson learned and gather feedback from residents to understand what their hesitations were. At that point, council could potentially revise the plan and take it back to voters.

“That would be the only route forward that I’m seeing,” he said.

Jenson said the feedback he has heard stressed the lack of a holistic picture of the project and a raft of unanswered questions.

“People tend to not trust ambiguity,” he said. “It’s my sense that that may have been a challenge for this ballot measure – the lack of clarity in the long-term plans, both for an event center and then the hotel development that would be necessary to support its success long term.”

Cameron also noted that there are lessons to be learned from the outcome of the Nov. 4 vote. He said he believes the election outcome may reflect uncertainty on the national level leading to food security locally. He added that voters may not have believed the facility would actually generate as much money as projected in the consultant’s report.

Other messages are yet to be gleaned, according to Cameron.

“We’ll evaluate what those messages were, and could we have done that differently,” he said.

He added that he looks forward to unpacking the messages of the election.

“What I love about the Springfield approach is it’s about collaboration – it’s not about me having an answer,” he said. “We’re going to talk about it, collaborate and discuss what our thoughts are.”

He added that he does not think the tax rejection equates to a rejection of the project.

Springfield Public Information & Civic Engagement Director Cora Scott said more time would have helped get the convention center measure across the finish line.

“The lesson we learned from this election is that a three-month window of time to educate voters is a bit lacking,” she said via email. “More awareness that an issue was on the ballot Nov. 4 could have possibly led to a bigger turnout.”

Matt Morrow, president of the Springfield Area Chamber of Commerce, which supported the ballot measure, said while voter turnout was low for the election, he wants to hear from members of the community who opposed the project.

“Anytime there’s an election that doesn’t go as you hoped, you have to try to listen to the message in that. I’d like to have more of the community to have a say on that, but I think it’s important that we listen to the community that did have a say on it,” he said, noting with close votes like this one, objections tend to focus on the amount of money, accountability and clarity involved in the initiative. “Assuming some combination of that is the case, then there are ways to improve the proposal based on what the community tells us that we need.”

Mark Hecquet, president and CEO of Visit Springfield, Missouri, who was vocal in his support of the issue, declined to comment on the outcome.