City goes back to the drawing board on convention center funding

David Cameron: There was no Plan B ready to go if voters opposed measure.

Jeff Schrag: Convention center is ‘once-in-a-generation opportunity.’

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

Unofficial election results posted by the Greene County clerk’s office show 52.6%, or 3,927 votes, against the measure, with 47.4%, or 3,545 votes, in favor. Greene County Clerk Shane Schoeller said this morning that voter turnout was just above 7%. 

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

A news release issued last night by the city of Springfield points to plans to study other potential funding sources for the convention center project. Officials with the Springfield Area Chamber of Commerce, which endorsed the tax, have said that passage of the 3% tax would have raised an additional $4.4 million annually. Other funding sources are $30 million passed 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 $30 million in restricted funding in Gov. Mike Kehoe's budget. 

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

Reached as he prepared to enter a 10:30 a.m. election debriefing meeting today, Springfield City Manager David 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 – essentially the CEO role for the city – coincided with a presentation of a report by 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 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.”

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. But today’s a new day – it always is. The sun came up, and we’re going to go to work on behalf of the citizens of the entire community. That’s what we’re paid to do, and that’s what we’re expected to do.”

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.”

In an interview last week with Springfield Business Journal, Gov. Kehoe alluded to real estate negotiations the city is involved in as part of plans for the center. Schrag told SBJ that he could neither confirm nor deny whether those negotiations were taking place. 

Lessons learned
Cameron said there are lessons to be learned from the outcome of the Nov. 4 vote.

“We’ll regroup around the project,” he said.

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 – $1.3 billion over a 30-year period.

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 is a fan of the democratic process and values community input, but that he does not think the tax rejection equates to a rejection of the project.