Council to take another shot at lodging tax for convention center funding

David Cameron: General fund money will not be used to run the convention center.

Springfield City Council unanimously voted Jan. 12 to put a new 3% lodging tax in front of voters in the April 7 election.

If the measure passes on the April ballot, revenue from the tax on hotel, motel and short-term rental stays will be used to fund a downtown convention and events center.

The site of the center is on property that includes and is adjacent to the city-owned Springfield Expo Center, according to past Springfield Business Journal reporting.

Council put forth a similar measure to voters in November 2025, and it failed with 52% opposed, according to past SBJ reporting. Only 7% of registered voters cast ballots.

New to the tax on this second proposal is a sunset, with the tax set to expire after 35 years rather than being permanent. The updated measure also proposes using funds to pay not only for construction of a convention and events center, but also for its operation and maintenance.

The ordinance passed by council cites a 2025 report by the city’s paid consultant group Hunden Strategic Partners Inc. That report estimates the project will generate $1.3 billion in net new visitor spending over 30 years and $68.7 million in net new fiscal impact over 30 years.

In a report before the vote, City Manager David Cameron shared the results of an online survey and several in-person feedback sessions. Cameron said 45%-55% of survey respondents said they would be open to a revised tax proposal.

The ordinance also sets a hard cap of $175 million on construction costs, and Cameron envisions a maximum cost of $205 million if the city receives a $30 million appropriation from the state legislature, currently being withheld by Gov. Mike Kehoe. Acquisition of nearby property, including a purchase of the Jordan Valley Car Park, owned by Atrium Hospitality, is one additional expense factored into the total price.

Annual revenue from the 3% tax, if it passes, is estimated to start at $4.5 million, while annual debt service of the convention and event center would be $8 million-$13 million over the life of the debt, reported city Finance Director David Holtmann.

Funding model questions
City officials have doubled growth rate projections of the annual 3% proposed lodging tax revenue from 2%, touted in the run-up to the November ballot, to 4%. Cameron said in his Jan. 6 community listening session that the 2% projection was conservative, and the new projection is more in line with the city’s typical historical growth rate of 5% of the existing lodging tax.

As a result, officials believe the city can pay for the center through the 3% tax increase alone, rather than tapping into a portion of an existing 5% room tax for construction costs.

In the run-up to the November ballot measure, officials promoted a funding stack that included reallocation of the revenue from the city’s existing 5% lodging tax, part of which goes toward Jordan Valley bond debt that retires in 2028. After the bond debt is paid off, the debt service funds could be reallocated, in full or in part, toward convention center operation and management, according to past SBJ reporting. Cameron has said general fund money will not be used to operate the convention center.

“Our debt service varies,” Holtmann said. “It’s lighter on the front end.”

Councilmember Brandon Jenson pointed out that there is significant variability in individual years with the growth within the existing hotel/motel sales tax.

Cameron said it would be prudent to build a reserve of dollars from the existing tax to make sure the city can cover the debt service in a down year.

Councilmember Bruce Adib-Yazdi sought clarification of the cost of the proposed center. He noted his understanding was that the hard-cap cost of $175 million on construction would be paid for with finance income; an additional $30 million from the state would allow the cost to go to $205 million. The debt would be $145 million, he added, because of $30 million already allocated from the 2025 Spring Forward SGF sales tax. Cameron confirmed that this was accurate.

More details
Cameron said a conceptual drawing would be released to the public by March 6 in response to a desire, reflected in the survey, for more details on the project. Mark Hecquet, president and CEO of Visit Springfield, Missouri, said revenue generated by the center would be able to pay for community needs.

“A strong visitor economy helps pay for our city’s priorities,” he said.

Hecquet said the city has never had a fully functioning convention center.

“Every day we lose more than we gain,” he said, estimating the city loses $125,000 per day from its lack of a convention center.

The single-reading bill – added to the council agenda only three days before the meeting – was adopted as an emergency, one-reading measure to meet the Jan. 27 deadline for adding a question to the April ballot.