Tennessee county with no tourism value bets big on taxes for hotels

Tennessee county with no tourism value bets big on taxes for hotels

Folks in Bradley County say they can raise enough money for a new industrial park by increasing taxes on people who stay in their hotels.

County officials, such as Commissioner Louie Alford, readily admit the area isn’t a tourist destination. Still, officials say, higher taxes won’t affect average occupancy rates.

Hotel owners don’t agree, and they’ve shared their concerns with the Tennessee Hospitality and Tourism Association.

“A lot of the hotel owners are concerned about talking about this, quite frankly. People in Bradley County tell me they’re worried this will scare off customers,” association present Greg Adkins said.

“They don’t want repercussions to come their way. They don’t want to be seen as anti-jobs.”

ON THE BORDER: Would higher hotel taxes in Bradley County prompt people to go across the Georgia state line to get a good night's sleep? (Photo courtesy of Flickr: https://creativecommons.org/licenses/by-nc/2.0/)

ON THE BORDER: Would higher hotel taxes in Bradley County prompt people to go across the Georgia state line to get a good night’s sleep? (Photo courtesy of Flickr: https://creativecommons.org/licenses/by-nc/2.0/)

Several hotel owners in Bradley County failed to respond to requests for comment this week.

State Rep. Dan Howell, R-Georgetown, is shepherding a bill through the Legislature that would give county officials the right to increase the hotel tax from 5 percent to 7 percent.

Assuming legislators go along with Howell’s bill, two-thirds of Bradley’s county commissioners must vote yes to make the tax official.

Howell, who didn’t respond to Tennessee Watchdog’s requests for comment, told the Chattanooga Times Free Press the new industrial park would bring 2,000 new jobs.

That, of course, depends on hotel patrons, who always have other options.

The rate in nearby Chattanooga’ would be higher — 17.25 percent — but drive a few miles away to Murray County, Georgia, and pay 5 percent, according to hotel employees there. The rate in nearby McMinn County is 5 percent, as well.

The type of people who come through Bradley County pay attention to these things, Adkins said.

“With counties that are close to the border, like Bradley, it’s been our experience that travelers will go to other states to stay.

“It’s especially true for trucking companies that watch the rates very closely. It’s true for airlines.”

Adkins points to Memphis, along the Mississippi state line and some 370 miles from Bradley County.

“When taxes are too high, there are a huge number of hotels built across the state line, and, in this case, that’s in Southaven, Mississippi,” Adkins said. “More hotels are being built there instead of in Memphis.”

The rate in Southaven — 12 miles south of Memphis — is 10 percent; the city’s hotel tax rate is 17.75 percent, said a representative of Memphis’ Peabody hotel who did not identify herself.

Gary Farlow, president of the Bradley County Chamber of Commerce, favors the tax increase. He said many of the people who use his county’s hotels are there on business.

Greg Adkins (photo courtesy of the Tennessee Hospitality and Tourism Association)

Greg Adkins (photo courtesy of the Tennessee Hospitality and Tourism Association)

“We have a lot of manufacturers here,” Farlow said.

“A lot of these visitors are construction company managers who are here for work.”

County officials would build the proposed park near Cleveland, giving it a number of advantages, including a location along Interstate 75 some 15 miles from Chattanooga’s Volkswagen plant, Farlow said.

The park would also be near a new, four-lane divided highway.

So far, no company has committed to the proposed park.

“We have a number of prospects, but no one is willing to sign along the dotted line until they know it’s going to happen,” Farlow said.

“Our experience has been that most of our public and industrial parks are full or about to be full. We felt like it was time to do another one.”

The Bradley-Cleveland Industrial Development Board would own the park. Farlow said he likes it that way.

“My experience is that the private sector just doesn’t do much in the way of building industrial parks. The carry-on costs for them is more difficult than it is for local governments,” Farlow said.

“They have to make all their money off a land sale. The investment that we put into the industrial park is paid back over many years in the form of additional local taxes to support all those things local governments need to support.”

Bradley County officials paid $6 million for the property and have used another $6 million to develop the park, said Alford.

Without the hotel revenue, Howell told the Chattanooga Times Free Press, it would take another five years to finish the industrial park.

The park, if built, would encompass 2 million square feet and play host to a variety of distribution and assembly operations, Farlow said.

Bradley County has 32 hotels and motels and about 1,700 rooms, says the chamber’s Melissa Woody.

Contact Christopher Butler at chris@tennesseewatchdog.org 

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  • Vern Shotwell

    Bradley County doesn’t have much going for it, frankly. Might as well raise taxes and kill it!

  • Wow! This blog looks exactly like my old one! It’s on a completely different topic but it has pretty much the same page layout and design. Excellent choice of colors! deedbkedkddeadeg

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