Voters to consider additional 3% lodging tax for convention center

David Cameron: Convention center would capture tourism dollars now leaking out of city.

Jeff Schrag: Center would raise Springfield's flag as a rising metro.

Mark Hecquet: Market shows meeting and event business is coming back strong.

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There is just one issue facing Springfield voters on the Nov. 4 ballots: an additional 3% lodging tax to help fund the construction of a regional convention and event center.

It would also fund efforts to attract travel and tourism to the city, according to ballot language.

City Manager David Cameron said this month he does not think raising the lodging tax is likely to be a deterrent to visitors to the city.

“I feel comfortable with the rate, considering the return of what it will provide to not only the city but the region,” he said. “A lot of dollars are being leaked out of Springfield to other convention and event centers. There’s a market for us here.”

Springfield City Council unanimously passed an ordinance July 28 to put the question to the city’s voters. The vision is 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.

The 3% tax would be in addition to an existing 5% city tax and a base sales tax rate of 8.1% that includes city, county and state taxes. If passed, the additional tax would bring the total lodging tax to 16.1%. That’s lower, city officials say, than lodging taxes in cities like St. Louis, with a current rate of 17.93%, and Kansas City, with a rate of 16.48% plus $3 per room, per night.

Officials with the Springfield Area Chamber of Commerce, which endorsed the tax, have said that passage of the 3% tax would raise an additional $4.4 million annually.

The convention and event center proposal comes from recommendations of Chicago-based place strategy consultant Hunden Strategic Partners Inc. in what, according to Springfield Business Journal archives, is the fifth study of the Queen City’s readiness for a convention center since 2011.

In the feasibility study, Hunden Partners recommended a multiuse venue for both visitors and residents to use and declared a downtown location to be essential.

In releasing the consultant’s recommendation July 8, city leaders anticipated a 2028 opening for the center, which Hunden Partners said would generate $1.3 billion in spending and $68.7 million in tax revenue over a 30-year period.

The state of Missouri provisionally allocated $30 million to the project in its current fiscal 2026 budget, with the funds designated as restricted by Gov. Mike Kehoe. As a match for the state funds, council allocated $30 million from the Spring Forward SGF tax – the entire anticipated proceeds from the portion of the tax that is intended to fund community and neighborhood initiatives through the city’s Forward SGF comprehensive plan.

In its website and printed explanation of the tax measure, city officials say a critical driver of the city’s timing on the tax is its opportunity to secure the $30 million in state funding, which is on the withhold list pending stability of state revenues and demonstration of a $30 million match and project readiness. “These funds, authorized through House Bill 7 and signed by Gov. Mike Kehoe on June 30, require Springfield to move swiftly and decisively to demonstrate community support and financial preparedness,” the city’s explanation states.

Boosted rate
The consultant report also noted an adjoining 400-room hotel, estimated to cost $209 million, would be needed for the facility – rooms that would contribute to the tax proceeds.

Cameron said the funding assured by the tax is an important element in the array of capital – which he called the cap stack – needed for the convention and event center project.

“We’ve already got the first part of the match,” he said. “We’re also going to need the 3% tax and other buckets in the cap stack we have to consider.”

He added that a community improvement district and other funding mechanisms would allow the city to recover even more of the cost without all of the risk being put on the lodging tax.

“We’ve got to have a measure of money to pay for the capital expenditure,” he said. “There also has to be a funding mechanism to take care of maintenance. We want to make sure it has a funding source that’s adequate to keep it fresh, relevant and up to date.”

Transformative project
Mayor Jeff Schrag said the Spring Forward SGF tax was passed by voters in November 2024 showed the community’s interest in seeing transformative projects accomplished in the community.

“We cannot find a better investment than this in terms of adding economic vitality throughout the community,” he said. “This is adding something that Springfield does not now have at all that deals us in. It’s a way to plant our flag and say, ‘We’re in.’”

Schrag said he remains bullish that the governor will release the $30 million allocation for the project. He added that he was advised by state officials that the city should continue to put its best foot forward to secure the funding.

“We have all the tools in our existing toolbox to do the whole thing ourselves,” he said. “What else we would choose to bring to bear is up to us. We want to be really good stewards of public money.”

Schrag and Cameron both agree that the city will be able to attract visitors to the new facility.

“For a while, we’ll be brand new – the shiny new apple effect,” Schrag said. “The nice thing about the shiny new apple is that conventions, events and things book a while out. If you’re that shiny new apple for the first 10 years, that gets you a long way down the road.”

He said business and government associations, regional interest groups and smaller national groups, like religious organizations, rotate their conventions and meetings from place to place, as do themed events – “Cat fanciers, quilt fanciers, all of that universe,” he said.

Other cities are building multimillion- or even billion-dollar event centers, he said, and that means they will have to do big things, and a lot of them, to make a convention center work.

“What we’re doing is right sized for who we are and where we are,” he said.

Statistically, most convention centers – Schrag said 95% – do not make a profit, but some, like facilities in St. Charles and Overland Park, do, he said. In their annual reports, St. Charles reported a profit of about $27,000 in 2024, and Overland Park said it made $1.1 million.

“We’re building something we do not have to allow us to do things we cannot do now,” he said. “I feel very good about the processes we have set up that we can make this a success, and I love the idea of planting our flag as one of Missouri’s rising metros. This is just one more thing that metros have.”

Flexible venue
Mark Hecquet, president and CEO of Visit Springfield, Missouri, the city’s convention and visitors bureau, and a booster of the tax measure, was interviewed by phone from London, where he was engaged in promoting tourism in the city.

Hecquet stressed that the facility that is planned is an events center and is not designed solely for conventions.

It’s part of a trend around the country for cities to invest in venues that can hold a convention one day, a sporting event the next and graduation parties the day after that.

“It’s a truly flexible space that can be used 24/7, not only by visiting groups, but by the local community as well,” he said.

In an Oct. 3 opinion piece, David Stokes, director of municipal policy at the Show-Me Institute, said voters should be skeptical of claims about the benefits of a convention center.

Stokes offered the St. Louis downtown convention center, expanded in the 1990s, as an example of promises of revenue not delivered. He said the regional body that manages it struggles to pay for its upkeep while the city’s local tourism agency seeks to expand it.

He noted Springfield is setting up to pay for its proposed center through a lodging tax, the Spring Forward SGF allocation and the state budget allocation.

“Tourists, Springfield residents and possibly all of Missouri will get to pay for this new event space, whether it is actually needed or not,” he said.

The Show-Me Institute is a Missouri think tank that promotes free-market principles, according to its website.

Hecquet said some believe a traditional convention center is not the demand generator it used to be as preferences and designs have changed. But while the needs of people who attend conventions have changed, the market is as strong as ever, he said.

“We’re seeing in the marketplace that the business meeting and event side is coming back really strong,” he said. “The theory was that Zoom was going to be enough, but many are finding out that isn’t enough. There is still a need to do business face to face. Conventions aren’t going away.”

The center is also planned include a large indoor venue to help the city compete for a robust sports audience. Among the options are mat sports, like wrestling, martial arts and gymnastics, as well as table sports, like table tennis, and floor sports, like volleyball.

“The [Springfield Area] Sports Commission is already prospecting opportunities,” he said.